On March 21, 2018, the Georgia Legislature passed SB 328 (the Bill) to exclude IRC § 951A (GILTI ) from Georgia taxable income. The Bill treats GILTI as Subpart F income for purposes of the deduction under OCGA § 48-7-21(b)(8).
Earlier in this legislative session, Georgia updated its conformity to the IRC to February 9, 2018, with the enactment of HB 918. HB 918 specifically excluded GILTI from the state’s dividends received deduction and thus GILTI would therefore be included in taxpayers’ Georgia taxable income. HB 918 also provided that the deduction under IRC § 250 would apply to the extent that the related income is included in Georgia taxable income. Subsequent to the passage of HB 918, the business community rallied to inform legislators of the potential negative impact of state GILTI inclusion on Georgia businesses, including: the misalignment of the state’s taxation of GILTI without the corresponding offset for foreign taxes paid, the departure from Georgia’s long-standing policy of not taxing the foreign income of foreign subsidiaries, and the potential constitutional challenges to state taxation of GILTI. SB 328 now awaits Georgia Gov. Nathan Deal’s signature.