Good News for McIntosh as it qualifies for Tier 1 Job Tax Credit Program in 2017
As reported in the February 9, 2017 edition of The Darien News
There is good news for McIntosh County when it is placed in a Tier 1 classification in Georgia. Though the ranking puts this county among the 71 counties in the state have the highest poverty rate, unemployment rate and individual household income, it also means that the highest level of state tax credits for businesses that locate here.
Each year, the Georgia Department of Community Affairs (DCA) ranks each county into one of four tiers.
Wally Orrel, president and CEO of the McIntosh County Industrial Development Authority (IDA), explained the change this year at its Jan. 31 IDA’s board meeting.
“It is a remarkable story,” he said.
Before three years ago, this county was always a Tier 1 community, but three years ago the rating changed to a Tier 2, where it stayed for two years. Then in 2016, the state ranked the community to a Tier 3, which offered even less incentives. The rankings were completely unexplainable, even by DCA, Orrel said.
“How can it be?” he asked the state. “There was no reasoning for it.”
Now, the calculations have placed McIntosh back in Tier 1 and out of 159 counties in Georgia, with the poorest ranking at 1, McIntosh in now ranked 70.
Tax credits are available to businesses or their headquarters in seven strategic sectors: manufacturing, telecommunications, broadcasting, warehousing and distribution, research and development, processing, and tourism.
In 2016, when McIntosh was a Tier 3 county, it required a minimum of 25 jobs to be eligible for a $1,750 per job tax credit. Now, Orrel said, being designated in Tier 1, the minimum drops to two jobs and the tax credit rises to $4,000 per job created for up to five years.
He explains how the job tax credit works. “Suppose a manufacturer creates 50 jobs in McIntosh, a Tier 1 county. The value of this job credit would be $4,000 per job. Therefore, the company would receive $1 million in tax credits over a five-year period, bringing a $1 million reduction in Georgia income tax.”
50 jobs x $4,000 credit per job=$200,000×5 years=$1 million
Orrel said, “Job credits in Tier 1 counties can be used against 100 percent of income tax liability. In Tier 1 counties only, the excess over 100 percent is credited to Georgia withholding tax, with a limitation of $3,500 per job. The job credits may be carried forward for up to 10 years.
“This will allow our county to be more competitive with other rural counties in landing future businesses in our state and on the coast. Our state project managers and utility partners are excited about this change and we look forward to working together to bring jobs and investment to Georgia,” he noted.
During the board’s work session last week, Orrel said, “Already we have received a request for information for a company that involves 400 jobs and will be investing $50 million. It may not even come to the state. We may not be in the realm of getting it, but we are at the table. We actually have the opportunity and we may be a great location, but the issue is being a Tier I is going to be a real positive for us. As the market continues to have that positive spin as it does, there’s optimism and hope. I think 2017 is going to be a good year.
“Being a Tier 1 is so much better for us and will create a strong interest in doing business in McIntosh County!” Orrel concluded.
Tourism is No. 1 industry in McIntosh
Orrel provided the latest state figures concerning McIntosh County’s tourism industry.
“Tourism is our No. 1 industry,” Orrel told the IDA board. In the county, tourism supported 140 jobs and generated $14.9 million in direct tourist spending.
The tourism spending created $580,000 in state tax revenues and $440,000 in local tax revenues. He said that each McIntosh County household would need to be taxed an additional $192 per year to replace taxes generated by tourism economic activity in this community.
Figures show that in 2009, visitor expenditures were more than $10 million, and by 2011, expenditures had increased to $12 million. In 2014, money spent by visitors in McIntosh had risen to $14 million and in one year had risen $900,000 more to $14.9 million.
“Tourism is very important for McIntosh County,” Orrel concluded.
Other actions taken
During the IDA’s regular meeting on Jan. 31, the following actions were taken:
- Approved The Darien News to be the legal organ for the IDA for 2017
- Awarded the landscaping contract services for the Tidewaters Industrial Complex to Jarriel lawn, LLC.
- Awarded the financial auditing services engagement to Arline & Wiggins, certified public accountants in Brunswick.