HB 86 - Income tax; certain adjusted gross income; amend provisions

First Reader Summary

A BILL to amend Code Section 48-7-27 of the Official Code of Georgia Annotated, relating to computation of taxable net income, so as to change certain provisions with respect to adjustments to federal adjusted gross income by certain resident or nonresident shareholders; and for other purposes.

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HB 86                                              LC 18 7763 
 
 
 
 
 
 
                        A BILL TO BE ENTITLED 
                               AN ACT 
 
 
  1- 1  To amend Code Section 48-7-27 of the Official Code of 
  1- 2  Georgia Annotated, relating to computation of taxable net 
  1- 3  income, so as to change certain provisions with respect to 
  1- 4  adjustments to federal adjusted gross income by certain 
  1- 5  resident or nonresident shareholders; to repeal conflicting 
  1- 6  laws; and for other purposes. 
 
  1- 7       BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA: 
 
  1- 8                           SECTION 1. 
 
  1- 9  Code Section 48-7-27 of the Official Code of Georgia 
  1-10  Annotated, relating to computation of taxable net income, is 
  1-11  amended by striking subsection (d) and inserting in its 
  1-12  place a new subsection (d) to read as follows: 
 
  1-13      "(d)(1) Georgia resident shareholders of Subchapter 'S' 
  1-14      corporations may make an adjustment to federal adjusted 
  1-15      gross income for Subchapter 'S' corporation income where 
  1-16      another state does not recognize a Subchapter 'S' 
  1-17      corporation, provided that the Subchapter 'S' 
  1-18      corporation must have filed a corporate return with the 
  1-19      other state and paid tax to the other state on the 
  1-20      income. 
 
  1-21      (2) Nonresident shareholders of a Georgia Subchapter 'S' 
  1-22      corporation must execute a consent agreement to pay 
  1-23      Georgia income tax on their portion of the corporate 
  1-24      income in order for the Subchapter 'S' corporation to be 
  1-25      recognized for Georgia purposes.  This consent agreement 
  1-26      must be filed by the corporation with its corporate tax 
  1-27      return.  Shareholders of a federal Subchapter 'S' 
  1-28      corporation which is not recognized for Georgia purposes 
  1-29      may make an adjustment to federal adjusted gross income 
  1-30      in order to avoid double taxation on this type of 
  1-31      income.  Adjustments will not be allowed unless tax was 
  1-32      actually paid by the corporation.  The failure of a 
  1-33      nonresident shareholder to pay Georgia income tax on 
 
 
 
 
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  2- 1      their portion of the corporate income will terminate the 
  2- 2      corporation's Subchapter 'S' election with Georgia. 
 
  2- 3      (3) Shareholders of a federal Subchapter 'S' corporation 
  2- 4      which is not recognized for Georgia purposes may make an 
  2- 5      adjustment to federal adjusted gross income in order to 
  2- 6      avoid double taxation on this type of income. 
  2- 7      Adjustments will not be allowed unless tax was actually 
  2- 8      paid by the corporation." 
 
  2- 9                           SECTION 2. 
 
  2-10  All laws and parts of laws in conflict with this Act are 
  2-11  repealed. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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