HB 424 - Corporations processing credit card data; income apportionment

First Reader Summary

A BILL to amend Code Section 48-7-31 of the Official Code of Georgia Annotated, relating to taxation of corporations and allocation and apportionment of income, so as to provide for a method of income apportionment for certain corporations which process credit card data and provide related services to banks and other institutions; and for other purposes.

Page Numbers - 1/ 2

Recorded Votes

• Vote # 120 PASS 02/13/97

HB 424                                            LC 18 8057S 
 
 
 
 
 
 
                        A BILL TO BE ENTITLED 
                               AN ACT 
 
 
  1- 1  To amend Code Section 48-7-31 of the Official Code of 
  1- 2  Georgia Annotated, relating to taxation of corporations and 
  1- 3  allocation and apportionment of income, so as to provide for 
  1- 4  a method of income apportionment for certain corporations 
  1- 5  which process credit card data and provide related services 
  1- 6  to banks and other institutions; to provide an effective 
  1- 7  date; to provide for applicability; to repeal conflicting 
  1- 8  laws; and for other purposes. 
 
  1- 9       BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA: 
 
  1-10                           SECTION 1. 
 
  1-11  Code Section 48-7-31 of the Official Code of Georgia 
  1-12  Annotated, relating to taxation of corporations and 
  1-13  allocation and apportionment of income, is amended by 
  1-14  striking the introductory language of preceding subparagraph 
  1-15  (d)(3)(A) and inserting in its place the following: 
 
  1-16      "(3) Except as otherwise provided in paragraph (3.1) or 
  1-17      (3.2) of this subsection, where the net business income 
  1-18      is derived principally from business other than the 
  1-19      manufacture, production, or sale of tangible personal 
  1-20      property, the net business income of the corporation 
  1-21      shall be arrived at by application of the following 
  1-22      three factor formula:". 
 
  1-23                           SECTION 2. 
 
  1-24  Said Code section is further amended by adding a new 
  1-25  paragraph immediately following paragraph (3.1) of 
  1-26  subsection (d), to be designated paragraph (3.2), to read as 
  1-27  follows: 
 
  1-28        "(3.2)(A) As used in this paragraph, the term: 
 
  1-29          (i) 'Credit card data processing and related 
  1-30          services' shall include, but not be limited to, the 
  1-31          provision of infrastructure services for bank credit 
  1-32          card and private label card issuers, such as new 
  1-33          account application processing, international and 
 
 
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  2- 1          domestic clearing, statement preparation, 
  2- 2          point-of-sale authorization processing, card 
  2- 3          embossing, and other related processing services for 
  2- 4          managing cardholder accounts. 
 
  2- 5          (ii) 'Customer' means the banks and institutions to 
  2- 6          whom credit card data processing and related 
  2- 7          services are provided. 
 
  2- 8          (iii) 'Gross receipts factor' means a fraction, the 
  2- 9          numerator of which is the total gross receipts from 
  2-10          the taxpayer's customers during the tax period, if 
  2-11          the principal office of the customer's credit card 
  2-12          operation is in this state or if the principal 
  2-13          office of the taxpayer's customer is in this state, 
  2-14          and the denominator of which is the total gross 
  2-15          receipts from all of the taxpayer's customers during 
  2-16          the tax period. 
 
  2-17        (B) Where more than 60 percent of the total gross 
  2-18        receipts of a corporation are derived from the 
  2-19        provision of credit card data processing and related 
  2-20        services to banks and other institutions, the portion 
  2-21        of the net income attributable to business done in 
  2-22        this state shall be determined by multiplying the 
  2-23        corporation's net income by the gross receipts factor 
  2-24        in division (iii) of subparagraph (A) of this 
  2-25        paragraph;". 
 
  2-26                           SECTION 3. 
 
  2-27  This Act shall become effective upon its approval by the 
  2-28  Governor or upon its becoming law without such approval and 
  2-29  shall be applicable to all taxable years beginning on or 
  2-30  after January 1, 1997. 
 
  2-31                           SECTION 4. 
 
  2-32  All laws and parts of laws in conflict with this Act are 
  2-33  repealed. 
 
 
 
 
 
 
 
 
 
 
 
 
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