Rome and Floyd County leaders have changed the way new industry is to be recruited in the future, but something must have been going right over the course of the last several years. The Georgia Department of Community Affairs has upgraded Floyd County from a Tier 2 to a Tier 3 county for tax credit incentives for new and expanding industries.
Ken Wright, director of business and industry services at the Rome Floyd Chamber, told Rome-Floyd County Development Authority members, along with city and county staff members, that the change means state officials regard Rome and Floyd County as a more prosperous community. The change means that instead of a $3,000-per-job tax credit companies used to get for locating or expanding in Rome and Floyd County, companies will be eligible for a $1,750-per-job credit. Since Floyd County and Gordon County have a joint development authority, companies are still eligible for an additional $500-per-job credit.
Jimmy Byars, CEO at Hardy Realty and chairman of the Rome-Floyd County Development Authority which is now in charge of recruiting new jobs to the community, said the change came as a little bit of a surprise to him.
“We certainly have a fairly robust economy in Rome, at least from my perspective, a real estate perspective,” Byars said. “It may have been such an incremental change. We have been so close to the top of Tier 2 that we got pushed over. I’m not sure that we all of a sudden jumped.”
Ironically, Bartow County, which has enjoyed a run of industrial announcements, is also a Tier 3 county in the state’s eye.
Businesses currently planning job creation in Floyd County are eligible to preserve the 2018 ranking and Job Tax Credit benefits by filing a Notice of Intent prior to March 31. Notice of Intent filings are submitted directly to Department of Community Affairs to prevent adverse effects to a business based on changes in county tier rankings.
Taylor Kielty, the regional Georgia Department of Economic Development project manager, said that companies which file the Notice of Intent and are approved will be able to take advantage of the original Tier 2 tax credits for an additional three years. Polk County, which had been ranked as a Tier 1 county changed to Tier 2, and businesses there may also file a Notice of Intent with the state to preserve their former benefits as long as they meet the March 31 deadline.
Chattooga County remains a Tier 1 county, eligible for $4,000 job tax credits. Walker County and Gordon County are each Tier 2 counties.
“The tax credits are an important part of the conversation,” said Melinda Lemmon, director of the Cartersville-Bartow County Department of Economic Development. “Without them I’m not sure of lot of Georgia companies would grow as we’d like to see,” Lemmon said.
Kielty said the tier rankings are based primarily on three factors.
“Every year the Department of Community Affairs assesses every county individually to put them into the tier status,” Kielty said. “They look at the unemployment rate, per capita income and poverty level.”
At the end of December, the unemployment rate for Floyd County was 3.7 percent. Per capita income figures for 2018 will not be released by the U.S. Depart of Commerce bureau of Economic Analysis until September. The per capita figure for 2017 was $37,294. Similarly, the latest available poverty rate figure for Floyd County was 18.1 percent for 2017. The federal poverty benchmark was $12,060 for an individual or $24,600 for a family of four.
Kielty said the tax incentives can be a significant factor for companies seeking to expand or move into a new community. She said Northwest Georgia is doing very well when it comes to economic development interest.
To be eligible to receive the job tax credits, companies in Tier 3 must create at least 15 new jobs based on at least a 35-hour work week. The tax credits can be applied to 50 percent of a company’s Georgia corporate tax liability.
Tier 2 counties only have to create 10 new jobs and Tier 1 counties need only add two new jobs to the community. In both Tier 1 and Tier 2, the tax credits can be applied to 100 percent of the company’s Georgia corporate tax liability.
There are other tax-credit programs that industries can take advantage of, such as Less Developed Census Tract and Opportunity Zone credits. Investment credits fall in a different basket.
Wright said companies that are located in what have been identified as Less Developed Census Tracts only have to create five new jobs. Opportunity Zones only require two new jobs. On the other hand, companies that are not creating a lot of new jobs but are spending a lot of money on technology and equipment upgrades, which has been the case at International Paper, Bekaert and most recently Georgia-Pacific, may want to take advantage of the investment tax credit.
Companies cannot take both the job tax credit and the investment tax credit.
Wright said the job and investment tax credits have played a significant role in several expansions in Rome over the last two decades. He pointed to one company which has created over 100 jobs and was able to get so much from the job tax credit that it exhausted its whole state tax liability.
“When that happens, if they have extra credits, they can use it to offset their payroll withholding,” Wright said.
Wright said the tax incentives have been instrumental in multiple expansions at Neaton Rome and F & P Georgia, which have plants in Canada, Ohio and Mexico.
“If they’re adding a new line, it’s a competitive situation as to where they’re going to add that line. It’s a huge advantage to put it in Rome,” Wright said.