07 LC
18 6363S
House
Bill 441 (COMMITTEE SUBSTITUTE)
By:
Representatives Floyd of the
147th,
Mills of the
25th,
Parrish of the
156th,
Royal of the
171st,
and Knight of the
126th
A
BILL TO BE ENTITLED
AN ACT
AN ACT
To
amend Article 2 of Chapter 7 of Title 48 of the Official Code of Georgia
Annotated, relating to imposition and computation of income taxes, so as to
revise provisions relative to adjustment of taxable income with respect to
income from federal obligations and certain other obligations; to provide for
related matters; to provide for an effective date and applicability; to repeal
conflicting laws; and for other purposes.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION
1.
Article
2 of Chapter 7 of Title 48 of the Official Code of Georgia Annotated, relating
to imposition and computation of income taxes, is amended in Code Section
48-7-21, relating to taxation of corporations, by revising subparagraph
(b)(1)(B) as follows:
"(B)
There shall be subtracted from taxable income interest or dividends on
obligations of the United States and its territories and possessions or of any
authority, commission, or instrumentality of the United States to the extent
such interest or dividends are includable in gross income for federal income tax
purposes but exempt from state income taxes under the laws of the United States.
There shall also be subtracted from taxable income any income derived from the
authorized activities of a domestic international banking facility operating
pursuant to the provisions of Article 5A of Chapter 1 of Title 7, the 'Domestic
International Banking Facility Act,' and any income arising from the conduct of
a banking business with persons or entities located outside the United States,
its territories, or possessions. Any amount subtracted pursuant to this
subparagraph shall be reduced by any
interest
expenses directly
or
indirectly attributable to the production
of the interest or dividend income.
The direct
and indirect interest expense shall be determined by multiplying the total
interest expense by a fraction, the numerator of which is the taxpayer´s
average adjusted bases of such United States obligations, and the denominator of
which is the average adjusted bases for all assets of the
taxpayer."
SECTION
2.
Said
article is further amended in Code Section 48-7-27, relating to computation of
individual taxable net income, by revising paragraph (2) of subsection (b) as
follows:
"(2)
There shall be subtracted from taxable income interest or dividends on
obligations of the United States and its territories and possessions or of any
authority, commission, or instrumentality of the United States to the extent
includable in gross income for federal income tax purposes but exempt from state
income taxes under the laws of the United States. Any amount subtracted under
this paragraph shall be reduced by any
interest
expenses directly
or
indirectly attributable to the production
of the interest or dividend income.
For all
taxpayers except individuals, the direct and indirect interest expense shall be
determined by multiplying the total interest expense by a fraction, the
numerator of which is the taxpayer´s average adjusted bases of such United
States obligations, and the denominator of which is the average adjusted bases
for all assets of the
taxpayer."
SECTION
3.
This
Act shall become effective upon its approval by the Governor or upon its
becoming law without such approval and shall apply with respect to taxable years
beginning on or after January 1, 2007.
SECTION
4.
All
laws and parts of laws in conflict with this Act are repealed.