Hotel Motel Tax

Cities in Georgia may levy and collect an excise tax of a rate of up to 3 percent or at a rate of 5, 6, 7 or 8 percent on charges made for rooms, lodging, or accommodations furnished by hotels, motels, inns, lodges, tourist camps, or campgrounds. The law provides several different provisions for levying the hotel-motel tax. The amount of the levy and expenditure requirements varies depending on which alternative is chosen.

Hotel-motel taxes are authorized by the Official Code of Georgia (O.C.G.A. § 48-13-51). Each specific paragraph within the official code has its own expenditure requirements, and each city should familiarize itself with the provisions of the paragraph under which it levies the tax. You can find more information on the use and implementation of hotel tax on the Georgia Department of Community Affairs website at www.dca.ga.gov or check out our YouTube channel for our most recent Hotel Motel Tax webinar.

In 1997, the General Assembly enacted the Enterprise Zone Employment Act, recognizing the need for revitalization in many areas of Georgia. The State Enterprise Zone program intends to improve geographic areas within cities and counties that are suffering from disinvestment, underdevelopment, and economic decline, encouraging private businesses to reinvest and rehabilitate such areas.

The Enterprise Zone area must meet at least three of five criteria:

  1. Pervasive poverty established using the most current United States decennial census prepared by the U. S. Bureau of Census .
  2. Unemployment Rate (average for preceding yr.) at least 10% higher than State or significant job dislocation.
  3. Underdevelopment evidenced by lack of building permits, licenses, land disturbance permits, etc. lower than development activity within local body’s jurisdiction.
  4. General distress and adverse conditions (population decline, health and safety issues etc.).
  5. General Blight evidenced by the inclusion of any portion of the nominated area in an urban redevelopment area.

Incentives:

  • Local property tax exemption — 36-88-8(a)(1)
  • Local abatement or reduction in occupation taxes, regulatory fees, building inspection fees, and other fees that would otherwise be imposed on qualifying business — OCGA §36-88-9(a)

CONTACT
Sherron Alexander Jackson
sherron.alexanderjackson@dca.ga.gov

The Small Business Jobs Act of 2010 (the “Act”) became law in the fall of 2010. The Act created the State Small Business Credit Initiative, funded with $1.5 billion to strengthen state lending programs that support small businesses and manufacturers. Of the total amount funded, Georgia was allocated $48,024,748.

The State of Georgia application to the U.S. Treasury was approved and the allocation agreement executed in December 2011. GHFA EDFI/Georgia Department of Community Affairs (DCA) is the administrator of the program. Per the agreement, the oversight with the U.S. Treasury expired on March 31, 2017.

Currently, Georgia’s SSBCI offers two programs.

  1. GA LPP (Georgia Loan Participation Program) is a program where the State purchases a participation of up to 25% of an approved loan, for loans ranging from $100,000 to $5,000,000. (Maximum participation amount depending on program liquidity) Current Maximum participation is $250,000.
  2. Georgia SBCG (Small Business Credit Guaranty) is a 50% loan guaranty program with a current maximum loan amount of $400,000 with a $200,000 guaranty.

ADVANTAGES AND OPPORTUNITIES FOR GEORGIA LENDERS

  • Credit enhancements to strengthen bank loans and reduce risk
  • Delegated lending model where lenders manage underwriting
  • Streamlined procedures and quick response to project loan requests
  • Opportunity for CRA credit

HOW TO BECOME AN APPROVED LENDER

All lenders seeking approval as participating lenders in the SSBCI programs must undergo a vetting process whereby the State will evaluate the lender on management and lending experience as well as financial capacity and ability. The first step to becoming an approved lender is to complete a lender application package and submit it to DCA for review. Please contact our office to obtain an application package.

CONTACT
SSBCI Program
ssbci.manager@dca.ga.gov

The National Register of Historic Places is our nations official list of historic properties that are worthy of preservation. The National Register was established by the National Historic Preservation Act of 1966 and is maintained by the U.S. Department of the Interior, National Park Service. Properties listed in the National Register include buildings, sites, structures, objects, and districts (see: Historic Resources) that are significant in American history, architecture, archaeology, engineering, and culture. As Georgia’s state historic preservation office (SHPO), the Historic Preservation Division (HPD) administers the National Register of Historic Places program in Georgia.

National Register-listed properties are distinguished by being documented and evaluated according to uniform standards called the National Register Criteria for Evaluation. To be eligible for listing in the National Register, generally, a property or majority of properties in a district must be 50 years old or older; retain historic integrity in location, design, setting, materials, workmanship, feeling, and association; and meet at least one of the National Register Criteria for Evaluation.

National Register of Historic Places listing does not place restrictions on the use, treatment, transfer, or disposition of private property. HPD’s National Register Fact Sheet provides an overview of the program including what the National Register does and does not do. The National Register establishes uniform standards to evaluate and document historic properties. However, each SHPO may have different policies and procedures for administering the program.

Read more

Federal tax incentives are available for owners of an income producing historic property who carry out a substantial rehabilitation.
See the Federal Tax Incentives Program Fact Sheet for more.

  • Federal Rehabilitation Investment Tax Credit (RITC), 20 percent
    A federal income tax credit equal to 20 percent of the project’s qualified rehabilitation expenses available ONLY for income-producing properties. All properties must be listed in, or eligible for, the National Register of Historic Places, either individually or as part of a National Register Historic District. Project work must meet the Secretary of the Interiors Standards for Rehabilitation.The application is first reviewed by the Historic Preservation Division (HPD), then forwarded to the National Park Service for review and approval. This program is available nationwide.
  • Charitable Contribution Deduction
    The charitable contribution deduction is taken in the form of a conservation easement, and enables the owner of a certified historic structure to receive a one-time tax deduction. A conservation easement ensures the preservation of a buildings facade by restricting the right to alter its appearance. Qualified professionals should be consulted on the matters of easement valuations and the tax consequences of their donation. To be eligible for the charitable contribution deduction, a property must be listed in the National Register of Historic Places, either individually or as a contributing building within a historic district. If located in a National Register Historic District, a Part 1 must be submitted to HPD for review and certification by NPS.

The Rural Zone program targets rural downtown areas that have been adversely impacted by local economic conditions by creating Rural Zones and offering economic development incentives. It differs from other programs at DCA which provide technical assistance and access to capital because it would establish an incentive program to stimulate investment, job creation, and economic development. It also adds in retail opportunities, which are currently excluded from job tax credits. Further, multiple sources can benefit for instance, a single new coffee shop might provide job tax credits for the local business owner, an investment credit to an urban investor and a rehabilitation credit to a local contractor.

The Job Tax Credit (JTC) will be $2,000 per new full-time equivalent job per year, up to 5 years and not to exceed $200,000 total or $40,000 per year. New full-time equivalent job means an aggregate of employee worked hours totaling 40 hours per week between two or more employees. At least two net, new full-time equivalent jobs must be created to qualify. This credit is for the small business owner who opens a storefront and creates jobs.

The Investment Credit is equivalent to 25% of the purchase price, not to exceed $125,000 total or $25,000 per year. At least two net, new full-time equivalent jobs must be created and maintained to qualify for the investment credit. This credit is for people who purchase a building downtown and cannot be taken unless jobs are created and JTC is taken.

The Rehabilitation Credit is equivalent to 30% of the qualified rehabilitation, not to exceed $150,000 total or $50,000 per year. At least two net, new full-time equivalent jobs must be created and maintained to qualify for the rehabilitation credit. This credit is to offset development costs associated with the rehabilitation of a certified investor property.

Similar to other incentive programs (i.e., Opportunity Zones and Tourism Development Act) this program will be the joint responsibility of the Georgia Department of Community Affairs and the Georgia Department of Economic Development. Both Commissioners will jointly review Revitalization Zone requests, and DCA will administer the program for approved areas.

Eligibility requirements:

  • Cities and counties with a population of less than 15,000
  • Must have a concentration of historic commercial structures at least 50 years old within the zone
  • Must prove economic distress based on poverty rate, vacancy of the downtown area, or blight.
  • Must be in compliance with the state requirements regarding comprehensive planning and reporting, Service Delivery Strategy, Government Management Indicators (GOMI), and the Report of Local Government Finances.
  • Must submit a feasibility study or market analysis identifying business activities that can be supported in the zone
  • Must submit a master plan or strategic plan designed to assist private and public investment
The purpose of the Downtown Development Revolving Loan Fund (DD RLF) is to assist cities, counties and development authorities in their efforts to revitalize and enhance downtown areas by providing below-market rate financing to fund capital projects in core historic downtown areas and adjacent historic neighborhoods where DD RLF will spur commercial redevelopment.

Eligible applicants under this program shall be municipalities with a population of 100,000 or less, counties with a population of 100,000 or less proposing projects in a core historic commercial area, and development authorities proposing projects in a core historic commercial area in municipalities or counties with a population of 100,000 or less. The ultimate user of funds may be a private business or a public entity such as a city or development authority.

Applicants must demonstrate that they have a viable downtown development project and clearly identify the proposed uses of the loan proceeds. Once approved, funds may be used for such activities as: real estate acquisition, development, redevelopment, and new construction; rehabilitation of public and private infrastructure and facilities; purchase of equipment and other assets (on a limited basis).

The maximum loan is $250,000 per project. Applications will be accepted throughout the year and as loan funds are available to the Department.

Cherie Bennett
cherie.bennett@dca.ga.gov

The U.S. Small Business Administration is a small, independent federal agency created by Congress in 1953 to assist, counsel and champion the millions of American small businesses. The mission of SBA is to help people get into business and stay in business. To do this, SBA acts as an advocate for small business. At the direction of Congress, the Agency promotes the cause of small business, explains small businesses role and contributions to our society and economy and advocates policies that help small business. The agency also provides new and established small business owners with financial assistance, management counseling and training. SBA helps small firms get a fair share of government contracts and assists in the bonding process.

Tax Allocation Districts or TADs, often called Tax Increment Financing (TIF) in other states, are a popular mechanism for revitalizing blighted or underutilized areas such as brownfields, declining commercial corridors and industrial sites. The process involves designating a Tax Allocation District, establishing its current tax base floor and then dedicating future taxes over and above that floor for a given period of time to pay the costs (often but not always through issuing bonds) of the infrastructure, buildings or other improvements needed to spur new, higher density development. TAD funds may be used for a wide range of development activities. Cities, counties and school systems may all decide independently whether to participate in a TAD. City or County participation in a TAD requires a jurisdiction-wide referendum. TADs may be administered by local governments, DDAs, Housing Authorities or Redevelopment Agencies.

Learn more about Tax Allocation Districts

The Georgia State Income Tax Credit Program for Rehabilitated Historic Property allows eligible participants to apply for a state income tax credit equaling 25% of qualifying rehabilitation expenses capped at $100,000 for personal, residential properties, and $300,000 for income-producing properties. The credit is a dollar for dollar reduction in taxes owed to the State of Georgia and is meant to serve as an incentive to those who own historic properties and wish to complete a rehabilitation.  The Georgia Preferential Property Tax Assessment Program for Rehabilitated Historic Property allows eligible participants to apply for an 8-year property tax assessment freeze. This incentive program is designed to encourage rehabilitation of both residential and commercial historic buildings by freezing property tax assessments for eight and one-half years.

Redevelopment projects can be the most challenging economic and community development projects a local government undertakes. The Redevelopment Fund provides flexible financial assistance to locally initiated public/private partnerships helping local governments implement projects that wouldn’t proceed otherwise. The Redevelopment Fund is used to leverage investments in commercial, downtown and industrial redevelopment and revitalization projects. The Redevelopment Fund primarily focuses on the HUD national objective of “eliminating slums or blight”.  As a result, many smaller scale projects (in downtown areas, blighted industrial areas, etc.) will be more competitive for Redevelopment Fund financing. The Redevelopment Fund may be combined with other DCA CDBG programs to reduce the economic challenges of redevelopment projects and increase their investment potential.

Contact:
Brent Allen
(404) 217-0733
brent.allen@dca.ga.gov 

Local governments which undertake redevelopment and revitalization efforts in certain older commercial and industrial areas can now qualify those areas for the State’s maximum state job tax credit of $3,500 per job.  The incentive which is available for new or existing businesses which create two or more jobs are credits which can be taken against the business’s income tax liability and state payroll withholding.  The credits are available for areas designated by DCA as “Opportunity Zones”.   DCA will consider designations for areas that are within or adjacent to a census block group with 15% or greater poverty where an enterprise zone or urban redevelopment plan exists.

The Georgia Cities Foundation was established in 1999 by the Georgia Municipal Association as a 501(c)(3) organization.   In December 2010, the Foundation was designated as a Community Development Financial Institution (CDFI) by the United States Department of the Treasury’s CDFI Fund.

In 2008, the Foundation was awarded the Main Street Ally Award from the National Trust Main Street Center.

Mission

The mission of the Foundation is to assist cities in their community development efforts to revitalize and enhance underserved downtown areas, by serving as a partner and facilitator in funding capital projects, and by providing training and technical assistance.

What We Do

  • Downtown Financing Programs
  • Heart & Soul Downtown Workshop (with GMA)
  • Georgia Downtown Renaissance Partnership Programs (with GMA & UGA)
  • DDA Basic Training (with GMA & UGA)
  • Renaissance Award

Authorized by Article IX, Section VII of the Georgia Constitution, a community improvement district (CID) is a mechanism for funding certain governmental services, including street and road construction and maintenance, parks and recreation, storm water and sewage systems, water systems, public transportation systems, and other services and facilities. The administrative body of the CID, which can be the city governing authority, may levy taxes, fees and assessments within the CID, not to exceed 2.5 percent of the assessed value of the real property. Such taxes, fees and assessments may only be levied on real property that is used for non-residential purposes and revenues may be used only to provide governmental services and facilities within the CID. Bonded debt is permitted, but such debt may not be considered an obligation of the state or any other unit of government other than the CID.

The General Assembly may create a CID by local legislation. The creation of a CID is conditioned on approval of the municipal government if the CID would be entirely within the municipality and approval from both the municipal government and the county government if the CID would be partially in the incorporated area and partially within the unincorporated area. Additionally, the creation of a CID is contingent on receiving the written consent of a majority of the owners of the real property within the CID that would be subject to CID taxes, fees and assessments, as well as the owners of the real property within the CID that constitutes at least 75 percent by value of all real property within the CID that will be subject to CID taxes, fees and assessments.

Learn More about CIDs

A business improvement district, also referred to as a BID, is a defined area in which businesses and residential properties are required to pay an additional tax (or levy) in order to fund projects or provide supplemental services within the district’s boundaries. The BID is often funded primarily through the levy but can also draw on other public and private funding streams, such as surcharges on existing business licenses and occupational taxes. BIDs are the primary special tax district implemented in a Main Street programs boundaries as a means for providing additional funding and resources for the local Main Street organization.

The creation of a BID requires support from at least 51 percent of the municipal taxpayers of the district proposed for creation or municipal taxpayers owning at least 51 percent of the taxable property subject to ad valorem real and personal property taxation in the district.

BIDs can be created for a period of 5 or 10 years. In order to enact the proposed BID, the petition must be verified by the city, noticed and approved during a public meeting. The BID will have a board of appointed property owners who create the budget and are responsible for expending and allocating funds. The local Downtown Development Authority can serve as the board of directors for the BID.

Supplemental Services:
Supplemental services are defined as those services provided for the improvement and promotion of the district, including, but not limited to, advertising, promotion, sanitation, security, business recruitment and development.

Why start a Business Improvement District (BID)?
The most basic reason to start a BID is that downtown property and business owners have a higher expectation for public service than is currently being delivered. The only way to guarantee cleanliness and safety is to pay for it ourselves by creating a self-taxing district to fund sanitation and public safety.

How much will it cost?
Proposed BID assessment amounts may vary from community to community. BIDs are awarded in the form of a mill. It is up to the BID upon initial legislation to outline how many mills will be assessed and towards what use and purpose these funds will go to support. For example: A five-mill assessment costs about $200 in tax for every $100,000 in property value.

Why now?
No one wants to pay more taxes, but everyone wants more services. One way to think about this transition is taking control of a portion of taxes you were paying and diverting them so that they can only be spent around your properties.

How long will the BID run?
BIDs typically sunset or need to be renewed after 5 years but can not last longer than 10 years without going through the renewal process. Property owners within the district would have to vote to extend the BID to continue the services and collection of funds for an additional amount of time.

Who will run the BID?
State law has very specific rules about how the BID would be run. The BID will be administered by a seven-person volunteer board. Five board members are elected in a caucus meeting by the property owners within the district to serve three-year terms, and must be property owners.  The elected BID board has total discretion over how revenues are spent and on what projects.

What could the revenue from a BID accomplish? How will the revenue be used? How much money could we raise?
BIDs can undertake public space improvements.These can include capital improvements, consumer marketing, economic development, maintenance, parking and transportation projects, policy advocacy, security and social services. It will be up to the elected BID board to develop a budget.

How will the BID benefit me?
Previous studies show that BIDs increase property values. In fact, “on average, the value of commercial property within a BID increases by approximately 15 percentage points more than comparable properties in the same neighborhood but outside the BID.” Another study found that BIDs significantly reduce crime, especially theft and property crime. BIDs have also been shown to increase occupancy rates, public perception, lease rates, retail sales and pedestrian counts.

How common are BIDs?
There are over 400 BIDs functioning in 42 states in the US in cities with a median population of approximately 100,000. Atlanta, Columbus, Rome and Madison all have at least one BID or CID in Georgia. As a validation of success, BIDs are rarely if ever disbanded, showing that property owners realize real value from BID services. All of the cities listed with BIDs or CIDs in Georgia have renewed their districts at least once.

What is the difference between a BID and a CID?
BID, or Business Improvement District, is the most common nomenclature in use in the US, but these districts go by all kinds of names like “self-supported municipal improvement district,” “Special Improvement Districts,” “Special Business Districts,” “Economic Improvement Districts,” and of course “Business Improvement Districts.” Georgia law allows two of these self-taxing districts, BIDs and CIDs, with slightly different legal requirements and uses, but similar purposes.