Georgia does not have a Franchise Tax, but does have a “Net Worth Tax” that functions like other states’ Franchise Taxes. The state has a detailed FAQ on the subject.
The “Net Worth Tax” is part of the Corporate Income Tax return for Georgia, so it is typically filed by a tax accountant. Importantly, this Net Worth Tax return is separate to Georgia’s annual report filing requirement.
This article is focused on C Corporations and LLCs registered in Georgia.
C Corporations and LLCs taxed as Corporations doing business in Georgia must file a net worth return each year on or before the fifteenth day of the fourth calendar month after the end of their tax year. There is also a separate “Initial Net Worth Return”.
C Corporations and LLCs taxed as Corporations doing business in Georgia must also file an initial net worth return on or before the fifteenth day of the fourth calendar month after qualification in the state.
Although the Net Worth Return form itself is part of the Corporate Income Tax Return packet, the initial Net Worth Return will be filed separately, on a different date:
The initial net worth tax return is based on the beginning net worth (Federal Schedule L) of the corporation and covers the tax period from the date of incorporation/qualification to the end of the year. If this return is for a short period of less than six months, the tax due is 50%. The initial net worth return cannot be combined with the initial income tax return because the due dates do not coincide.
Georgia charges a certain amount of Net Worth Tax based on reported Net Worth. The state provides a table with each tax amount and its associated Net Worth in its Income Tax instructions booklet. The form required is part of the Corporate Income Tax filing.
Net worth is defined to include issued capital stock, paid in surplus and retained earnings. Treasury stock should not be deducted from issued capital stock.
Foreign qualified companies pay Net Worth Tax on Net Worth employed within Georgia. Georgia Domestic Corporations pay Net Worth Tax on 100% of Net Worth.
Corporations with a net worth of $100,000 or less are not subject to tax but must file a return. The maximum net worth tax is $5,000 for a net worth in excess of $22 million.
