If you’ve just incorporated in Georgia or registered your out-of-state company to do business here, your initial net worth return in Georgia is due by the 15th day of the third month after you incorporate or qualify in the state, and the tax runs from $0 for net worth of $100,000 or less up to a maximum of $5,000 for net worth above $22 million.1Georgia Department of Revenue. Corporate Income and Net Worth Tax The return is filed on Form 600 (C corporations) or Form 600S (S corporations), and you file it even if the calculation shows you owe nothing.
Who Has to File an Initial Return
Any corporation that does business in Georgia, owns property in the state, or is registered with the Georgia Secretary of State is subject to the net worth tax.2Georgia Department of Revenue. Net Worth Tax for Corporations – FAQ That covers Georgia-formed corporations from the moment of incorporation and foreign corporations from the moment they qualify to do business here. An LLC that has elected to be taxed as a corporation falls under the same rules.
Out-of-state companies are the ones most likely to be caught off guard. Registering with the Secretary of State to do business in Georgia creates the filing obligation on its own, even if the Georgia activity is modest. Partnerships are not subject to the net worth tax at all. If your corporation owns a Qualified Subchapter S Subsidiary, the parent and the QSSS file separate net worth returns; a parent that isn’t registered here, doesn’t do business or own property in Georgia, and gets no Georgia-source income except through the QSSS doesn’t have to file.2Georgia Department of Revenue. Net Worth Tax for Corporations – FAQ
The Initial Filing Deadline
A corporation doing business in Georgia for the first time must file its initial net worth return by the 15th day of the third month after incorporating or qualifying in Georgia.1Georgia Department of Revenue. Corporate Income and Net Worth Tax If you incorporate on January 10, your initial return is due April 15. Qualify on June 20 and the deadline is September 15. The clock starts on the date of incorporation or qualification, not the date you start generating revenue.
Don’t confuse the initial deadline with the ongoing annual deadline. After the first return, C corporations file by the 15th day of the fourth month after the start of the tax year (April 15 for calendar-year filers), while S corporations file by the 15th day of the third month (March 15 for calendar-year filers).2Georgia Department of Revenue. Net Worth Tax for Corporations – FAQ One quirk worth knowing: the net worth tax year runs one year behind the income tax year, so once you’re into the regular cycle, the net worth figure on your current return is based on the prior year’s ending balance sheet.
How to Calculate the Net Worth You Report
Net worth for this tax is the corporation’s total equity: issued capital stock, paid-in surplus, and earned surplus (retained earnings), taken from the balance sheet.2Georgia Department of Revenue. Net Worth Tax for Corporations – FAQ This has nothing to do with profit. A company that has lost money since inception can still owe net worth tax if its balance sheet shows positive equity from paid-in capital.
Georgia-formed corporations pay on their full net worth. Foreign corporations apportion their net worth to Georgia using two factors: the ratio of Georgia assets to total assets, and the ratio of Georgia gross receipts to total gross receipts.3Justia. Georgia Code 48-13-75 – Apportionment of Net Worth Only receipts from products shipped to or delivered within Georgia count toward the Georgia numerator. Sales negotiated through an out-of-state office and shipped from Georgia storage to customers outside the state are excluded.
What You’ll Owe
The net worth tax is a flat dollar amount per bracket, not a percentage. Corporations with Georgia net worth of $100,000 or less owe nothing but still have to file the return.1Georgia Department of Revenue. Corporate Income and Net Worth Tax Above that floor, the brackets are:4Justia. Georgia Code 48-13-73 – Amount of Corporate Net Worth Tax
- Over $100,000 to $150,000: $125
- Over $150,000 to $200,000: $150
- Over $200,000 to $300,000: $200
- Over $300,000 to $500,000: $250
- Over $500,000 to $750,000: $300
- Over $750,000 to $1 million: $500
- Over $1 million to $2 million: $750
- Over $2 million to $4 million: $1,000
- Over $4 million to $6 million: $1,250
- Over $6 million to $8 million: $1,500
- Over $8 million to $10 million: $1,750
- Over $10 million to $12 million: $2,000
- Over $12 million to $14 million: $2,500
- Over $14 million to $16 million: $3,000
- Over $16 million to $18 million: $3,500
- Over $18 million to $20 million: $4,000
- Over $20 million to $22 million: $4,500
- Over $22 million: $5,000
Because the brackets are flat, a company with $25 million of Georgia net worth pays the same $5,000 as one with $200 million. For most new corporations, the dollar amount of the tax itself is small. The exposure that matters comes from missing the deadline.
Missing the Initial Deadline
The net worth tax is reported on the same return as corporate income tax, so the same penalty structure applies. A late filing triggers a penalty of 5% of the unpaid tax for each month the return is overdue, capped at 25%, with interest accruing on top at a rate the Department of Revenue sets each year.5Georgia Department of Revenue. Penalty and Interest Rates Willful failure to file or pay carries a separate 10% penalty plus interest.6Justia. Georgia Code 48-2-44 – Willful Failure to File Return or Pay Revenue Held in Trust for State
Repeated failures to file or significant underreporting can draw an audit. The Department of Revenue shares information with the IRS under federal information-sharing agreements, so a Georgia problem can turn into a federal one. Intentional tax evasion is a criminal offense under Georgia law and can carry fines, imprisonment, or both.
Records to Keep From the Start
Georgia’s statute of limitations for assessing corporate taxes is three years from the date a return is filed.7Justia. Georgia Code 48-7-82 – Periods of Limitation for Assessment of Taxes Hold onto the balance sheet behind your initial return along with documentation of issued capital stock, paid-in surplus, and retained earnings for at least that long. If you’re a foreign corporation apportioning net worth to Georgia, keep records of your Georgia assets and Georgia gross receipts separately. In an audit, the taxpayer has to prove the reported figure, so clean documentation from day one is your best protection.