07 SB184/AP
Senate
Bill 184
By:
Senator Rogers of the 21st
AS PASSED
AS PASSED
AN
ACT
To
amend Chapter 7 of Title 48 of the Official Code of Georgia Annotated, relating
to income taxes, so as to provide for an additional adjustment to taxable income
of corporations with respect to certain disallowances; to change certain
provisions regarding the disallowances as a business expense of certain
compensation paid by a taxpayer; to exempt military income received by a member
of the national guard or any reserve component of the armed services of the
United States stationed in defense of the borders of the United States pursuant
to military orders; to provide for an additional adjustment to taxable income of
certain taxpayers with respect to certain disallowances; to change certain
provisions regarding definitions with respect to current income tax payment; to
change certain provisions regarding collection and withholding of income taxes;
to provide effective dates; to provide for applicability; to repeal conflicting
laws; and for other purposes.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION
1.
Chapter
7 of Title 48 of the Official Code of Georgia Annotated, relating to income
taxes, is amended by adding a new paragraph in subsection (b) of Code Section
48-7-21, relating to taxation of corporations, to read as follows:
"(15)
Georgia taxable income shall be increased by the amount of the payments,
compensation, or other economic benefit disallowed by Code Section
48-7-21.1."
SECTION
2.
Said
chapter is further amended by revising Code Section 48-7-21.1, relating to the
disallowance as a business expense of certain compensation paid by a taxpayer,
as follows:
"48-7-21.1.
(a)
As used in this Code section, the term:
(1)
'Authorized employee' means any individual whose hiring for employment or
continuing employment in the United States does not violate the provisions of 8
U.S.C. Section 1324a.
(2)
'Basic pilot program' shall mean the electronic verification of a work
authorization program of the Illegal Immigrant Reform and Immigrant
Responsibility Act of 1996, P. L. 104-208, Division C, Section 1324a note, and
operated by the United States Department of Homeland Security.
(3)
'Labor services' means the physical performance of services in this
state.
(b)
On or after January 1, 2008, no payment or compensation or other remuneration,
including but not limited to wages, salaries, bonuses, benefits, in-kind
exchanges, expenses, or any other economic benefit, paid for labor services to
an individual totaling $600.00 or more in a taxable year, may be claimed and
allowed as a deductible business expense for state income tax purposes by a
taxpayer unless such individual is an authorized employee. The provisions of
this subsection shall apply whether or not an Internal Revenue Service Form 1099
or Form W-2 is issued in conjunction with such payments, compensation, or other
remuneration.
(c)
This Code section shall not apply to any business which:
(1)
Has enrolled and participates in the basic pilot program; or
(2)
Is exempt from compliance with federal employment verification procedures under
federal law which makes the employment of unauthorized aliens
unlawful.
(d)
This Code section shall not apply to any individual hired by the taxpayer prior
to January 1, 2008.
(e)
This Code section shall not apply to any taxpayer where the individual being
paid is not directly compensated or employed by said taxpayer.
(f)
This Code section shall not apply to payments, compensation, or other
remuneration paid for labor services to any individual who holds and presents to
the taxpayer a valid license or identification card issued by the Georgia
Department of Driver Services.
(g)
The commissioner is authorized to prescribe forms and promulgate rules and
regulations deemed necessary in order to administer and effectuate this Code
section."
SECTION
3.
Said
chapter is further amended in paragraph (12) of subsection (a) of Code Section
48-7-27, relating to computation of taxable net income, as follows:
"(12)
Military income received by a member of the national guard or any reserve
component of the armed services of the United States stationed in a combat zone
or stationed in defense of the borders of the United States pursuant to
military orders. The exclusion provided under this paragraph:
(A)
Shall apply with respect to each taxable year, or portion thereof, covered by
such military orders; and
(B)
Shall apply only with respect to such member of the national guard or any
reserve component of the armed forces and only with respect to military income
earned during the period covered by such military orders."
SECTION
4.
Said
chapter is further amended by adding a new paragraph in subsection (b) of Code
Section 48-7-27, relating to the computation of taxable net income, to read as
follows:
"(12)
Georgia taxable income shall be increased by the amount of the payments,
compensation, or other economic benefit disallowed by Code Section
48-7-21.1."
SECTION
5.
Said
chapter is further amended by adding a new paragraph in Code Section 48-7-100,
relating to definitions regarding current income tax payment, to read as
follows:
"(11)
'Withholding agent' means any person required to deduct and withhold any tax
under the provisions of Code Section 48-7-101."
SECTION
6.
Said
chapter is further amended in subsection (i) of Code Section 48-7-101, relating
to collection and withholding of income taxes, as follows:
"(i)
Form 1099 withholding
and reporting.
(1)
A withholding agent shall be required to withhold state income tax at the rate
of 6 percent of the amount of compensation paid for labor services as defined in
paragraph (3) of Code Section 48-7-21.1 to an individual, which compensation is
reported on Form 1099 and with respect to which the individual has:
(A)
Failed to provide a taxpayer identification number;
(B)
Failed to provide a correct taxpayer identification number. Except as to the
withholding rate specified in this paragraph, such failure shall be determined
in the same manner as provided for in Section 3406 of the Internal Revenue Code
and regulations thereunder; or
(C)
Provided an Internal Revenue Service issued taxpayer identification number
issued for nonresident aliens.
(2)
Any withholding agent who fails to comply with the withholding requirements of
this subsection shall be liable for the taxes required to have been withheld
unless such withholding agent is exempt from federal withholding with respect to
such individual pursuant to a properly filed Internal Revenue Service Form 8233
and has provided a copy of such form to the commissioner."
SECTION
7.
(a)
Except as otherwise provided in subsection (b) of this section, this Act shall
become effective on July 1, 2007.
(b)
Section 3 of this Act shall become effective January 1, 2008, and shall be
applicable to all taxable years beginning on or after that date.
SECTION
8.
All
laws and parts of laws in conflict with this Act are repealed.