PDF 2017 Partnership Income Tax - Georgia Department of Revenue
IT-711
rev 11.8.17
Nathan Deal Lynnette T. Riley
Governor Revenue Commissioner
State of Georgia
Department of Revenue
2017
Partnership Income Tax
General Instructions
File Form 700 electronically. Visit our website dor. for more information.
CREDIT CARD PAYMENTS
ELECTRONIC FILING
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FROM THE COMMISSIONER
This booklet is designed to provide information and assist partnerships in filing their Georgia partnership tax
returns. I recommend you review the Department¡¯s
website to determine if the changes affect your return.
This booklet contains the instructions required by
most partnerships. If you need forms, we encourage
you to visit our website at dor.. There
you can download forms and always obtain up-todate tax information and news from the Department of
Revenue. A list of useful telephone numbers is on page 5.
The Department of Revenue, as outlined in the Taxpayer Bill
of Rights, will provide ¡°fair, courteous and timely service¡± to
the taxpayers of Georgia. Our mission is to provide the best
customer service and operational performance of any state
taxing authority and the IRS. We welcome your comments
and suggestions on how to better accomplish that mission.
Lynnette T. Riley
Commissioner
The Georgia Department of Revenue accepts Visa, American
Express, MasterCard, and Discover credit cards for payment
of:
¡Ì
¡Ì
Current-year individual and corporate tax payments;
¡Ì
Individual and corporate estimated tax payments.
Liabilities on Department of Revenue-issued assessment
notices
What¡¯s Inside?
Adjustments to Federal Income...............................................2
Amended Returns...................................................................2
Computation of Income for Georgia Purposes........................3
Corporate Partners of Partnerships.........................................5
Federal Audit...........................................................................2
Filing Requirements................................................................2
Georgia Tax Center..................................................................1
Guaranteed Payments............................................................5
Income Apportionment and Allocation.....................................3
Income to Partners..................................................................3
Net Worth Tax..........................................................................5
Partnerships with Nonresident Partners..................................5
Tax Credits.........................................................................6-12
Telephone Assistance..............................................................5
When and Where to File..........................................................2
Georgia Tax Center
What is the Georgia Tax Center? The Georgia Tax Center (GTC) is the Department of Revenue¡¯s secure
self-service customer facing portal for making online Individual or Business Tax payments and for corresponding with the
Department.
Who Can Sign Up? Any taxpayer that pays taxes in the state of Georgia is eligible to use GTC for Sales and Use
Tax, Withholding Tax, Film Withholding, Corporate Income Tax, International Fuel Tax Agreement, Individual Income Tax,
Fiduciary, 911 Prepaid Wireless Fee, Alcohol and Tobacco, Amusement (COAM), Motor Fuel, and Sales Tax Contractor
Licensing Bonding.
How Do I Sign Up? To use GTC, visit our website at . First time users must register before
accessing tax accounts. To register, you will need:
?
?
?
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Tax type account number
A valid email address
Amount of your last statement
ZIP Code for your location address
Please visit our website for instructional videos and frequently asked questions. dor.georgia-tax-center-info
GTC Features
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For a complete list of features visit GTC and click on the ¡°What can I do inside GTC¡± button.
Page 1
GENERAL INFORMATION
FEDERAL TAX CHANGES, NEW LEGISLATION, AND
OTHER POLICY INFORMATION
Federal Tax Changes, New Legislation, and other Policy Information are available via the Department¡¯s website dor.
income-tax.
FILING REQUIREMENTS
A partnership, limited liability company, syndicate, group, pool,
joint venture and unincorporated organization which is engaged
in business or owns property located in Georgia or has members
domiciled in Georgia or has income from Georgia sources, and
which is required to file a Federal Income Tax return on Form 1065,
is required to file a Georgia Income Tax return on Form 700.
WHEN AND WHERE TO FILE
Form 700 must be filed on or before the 15th day of the third month
following the close of the taxable year. If the due date falls on a
weekend or holiday, the return is due on the next day that is not
a weekend or holiday. Mail the form to: Georgia Department of
Revenue, P.O. Box 740315, Atlanta, Georgia 30374-0315.
WHEN ELECTRONIC FILING IS REQUIRED
Taxpayers that remit payments by electronic funds transfer, whether
on a mandatory or voluntary basis, must file all associated returns
electronically. Also, a nonindividual income tax return must be
electronically filed when the federal counterpart of such return is
required to be filed electronically pursuant to the Internal Revenue
Code of 1986 or Internal Revenue Service regulations. Finally, a
return is required to be electronically filed if the return generates,
allocates, claims, utilizes, or includes in any manner a series 100
credits (see page 6, etc.).
FEDERAL AUDIT
If the Internal Revenue Service has adjusted net income, a detailed
statement of these adjustments must be submitted under a separate
cover within 180 days to: Georgia Department of Revenue,
Processing Center, P.O. Box 740315, Atlanta, Georgia 30374-0315.
Further, if the changes result in a refund, the refund must be claimed
within one year of the date the changes are submitted
AMENDED RETURNS
If a partnership becomes aware of changes it must make after filing
its return, it should file an amended Form 700. Check the Amended
return box on Form 700 and submit an amended K-1 for each partner
and a complete copy of the amended Federal partnership return,
including schedules, if applicable.
RELATION TO THE FEDERAL RETURN
The Georgia return correlates to the Federal return in most respects
(see information below about Federal tax changes). The accounting
period and method used for the Georgia return must be the same
as on the Federal return.
A complete copy of the Federal return and all supporting schedules
must be attached to the Georgia return. Otherwise, your return will
be deemed incomplete.
ADJUSTMENTS TO FEDERAL INCOME
(Schedules 5 and 6)
To determine the total income for Georgia purposes, certain
adjustments as provided by Georgia law are included in the
computations for Schedules 5 and 6. The total additions to Federal
Income should be placed on Line 9 of Schedule 8, and listed in
Schedule 5. Georgia does not allow the Federal deduction for income
attributable to domestic production activities (IRC Section 199). An
adjustment to the Georgia partnership return is not required if the
partnership is not allowed the Section 199 deduction directly, but
instead passes the information needed to compute the deduction to
the partners. A partnership must add back all intangible expense
and related interest expense directly or indirectly paid to a
related member. All such expense must be listed as an addition
to Federal income even if the taxpayer qualifies for an exception.
If the taxpayer qualifies for a full or partial exception, Form IT
Addback must be completed in order for the taxpayer to take a
subtraction on Schedule 6 for all or any portion of the addition
listed on Schedule 5.
A partnership must add back all captive REIT expenses directly or
indirectly paid to a related member. All such expense must be listed
as an addition to federal income even if the taxpayer qualifies for
exception. If a taxpayer qualifies for a full or partial exception, Form
IT-REIT must be completed.
A taxpayer must addback payments of more than $600 in a taxable
year made to employees who are not authorized employees and who
are not excepted by O.C.G.A.¡ì 48-7-21.1. An authorized employee
is someone legally allowed to work in the United States.
The total subtractions from Federal income should be shown on Line
11 of Schedule 8, and listed on Schedule 6. The more commonly
used items are listed in each schedule.
Additionally, adjustments due to other Federal tax changes
should be reported as stated on our Department¡¯s website (see
this page).
U.S. obligation income must be reduced by direct and indirect interest
expense. To arrive at such reduction, the total interest expense is
multiplied by a fraction, the numerator of which is the taxpayer¡¯s
average adjusted basis of the U.S. obligations, and the denominator
of which is the average adjusted basis of all assets of the taxpayer.
Any expense that is subject to further limitation (e.g., Section 179
Deduction, Charitable Contributions, etc.) is not deductible in
calculating total income for Georgia purposes. However, these
expenses may be deductible on the partner¡¯s income tax return.
Where salaries and wages are reduced in computing Federal
taxable income because a federal jobs tax credit has been taken,
which required the elimination of the salary and wages deduction,
the eliminated salary and wage deduction shall be subtracted from
Georgia taxable income. Regulation 560-7-7-.05 defines the term
¡°federal jobs tax credit¡±.
Taxpayers who are parties to state contracts may subtract from
Federal taxable income or Federal adjusted gross income 10%
of qualified payments to minority subcontractors or $100,000,
whichever is less, per taxable year.
A list of certified minority subcontractors will be maintained by the
Commissioner of the Department of Administrative Services for the
Revenue Department and general public. To register your business
as a minority subcontractor or to view the list, call 404-656-6315 or
visit doas.state-purchasing/suppliers
A partnership may subtract Federally taxable interest received on
Georgia municipal bonds designated as ¡°Build America Bonds¡± under
Section 54AA of the Internal Revenue Code of 1986.
¡°Recovery Zone Economic Development Bonds¡± under Section
1400U-2 of the Internal Revenue Code or any other bond treated as
a ¡°Qualified Bond¡± under Section 6431 (f) of the Internal Revenue
Code are considered ¡°Build America Bonds¡± for this purpose.
A partnership may subtract federally taxable interest received
on Georgia municipal bonds issued by the State of Georgia and
certain authorities or agencies of the State of Georgia for which
there is a special exemption under Georgia law from Georgia tax
Page 2
GENERAL INFORMATION (continued)
on such interest. See Georgia Code Section 48-7-27 for additional
adjustments.
DEFERRED COMPENSATION
A nonresident, who receives deferred compensation or income from
the exercise of stock options that were earned in Georgia in a prior
year is required to pay tax on the income, but only if the prior year¡¯s
income exceeds the lesser of: 1) 5 percent of the income received by
the person in all places during the current taxable year; or 2) $5,000.
However, the income is not taxed if federal law prohibits the state
from taxing it. Federal law prohibits state taxation of some types of
retirement income including pensions as well as income received
from nonqualified deferred compensation plans if the income is paid
out over the life expectancy of the person or at least 10 years. An
employer is required to withhold Georgia income tax on any amounts
that are required to be included in the nonresident¡¯s income.
INCOME APPORTIONMENT AND ALLOCATION
(Schedules 7 and 1)
If any Partnership, domestic or foreign, is doing business or owns
property both within and without Georgia, the average ratio as
computed in Schedule 7 should be used to compute Georgia Net
Income in Schedule 1. If the business income of the partnership
is derived from Georgia sources, from property owned or business
done within this State, and in part from property owned or business
done without this State, the tax shall be imposed only on that portion
of the business income which is reasonably attributable to Georgia
sources and property owned and business done within this State,
to be determined as follows:
(1) Interest received on bonds held for investment and income
received from other intangible property held for investment are not
subject to apportionment. Rentals received from real estate held
purely for investment purposes and not used in the operation of
the business are also not subject to apportionment. All expenses
connected with the interest and rentals from such investments are
likewise not subject to apportionment but must be applied against
the investment income. The net investment income from intangible
property shall be allocated to Georgia if the partnership¡¯s situs is in
Georgia, or the intangible property was acquired as income from
property held in Georgia, or as a result of business done in Georgia.
Net investment income from tangible property in Georgia shall be
allocated to Georgia.
(2) Gains from the sale of tangible or intangible property not held,
owned or used in connection with the trade or business of the
partnership, nor for sale in the regular course of business, shall be
allocated to Georgia if the property sold is real or tangible personal
property situated in this State, or intangible property having an actual
situs or a business situs within this State. Otherwise the gains shall
not be allocated to this State.
(3) Net income of the above classes having been separately allocated
and deducted, the remainder of net business income shall be
apportioned as follows:
ONE FACTOR FORMULA
(a) Gross Receipts Formula. The gross receipts factor is the ratio
of gross receipts from business done within this State to total gross
receipts from business done everywhere.
Receipts derived from the sale of tangible personal property shall
be deemed to have been derived from business done in Georgia if
they were received from products shipped to customers in this State
or products delivered within this State to customers.
When receipts are derived from business other than the sale of
tangible personal property, receipts shall be deemed to have
been derived in Georgia if received from customers within this state,
or if the receipts are otherwise attributable to this State¡¯s marketplace.
? For tax years beginning on or after January 1, 2008, the Georgia
apportionment ratio shall be computed by applying only the gross
receipts factor. See Rules and Regulation 560-7-7-.03(4)(d) for
specific details.
? For tax years beginning on or after January 1, 2006, a company
whose net income is derived from the manufacture, production, or
sale of tangible personal property, and from business other than the
manufacture, production, or sale of tangible personal property, must
include gross receipts from both activities in their receipts factor.
? For tax years beginning on or after January 1, 2006, a company
whose net income is derived from business other than the
manufacture, production, or sale of tangible personal property, only
includes in their receipts factor gross receipts from activities which
constitute the taxpayer¡¯s regular trade or business.
(b) Apportionment of Income; Business Joint Venture and Business
Partnerships. A corporation or partnership which is involved in a
business joint venture, or is a partner in a business partnership, must
include its pro rata share of the joint venture or partnership gross
receipts values in its own apportionment formula.
COMPUTATION OF TOTAL INCOME FOR GEORGIA
PURPOSES (Schedule 8)
Schedule 8 reflects flow-through income from the federal return
which is taxable to the individual partners. A resident partner is
required to report his full share of partnership income or loss. A
nonresident partner is required to report only his share of Georgiaapportioned and Georgia-allocated income on such partner¡¯s return.
Payments made to a partner for services rendered or interest on
capital contributions (guaranteed payments) are not deductible when
computing the partnership¡¯s net income. Schedule 8 is similar to the
Federal Schedule K. Enter the total amounts from each category on
Schedule 8 where applicable.
INCOME TO PARTNERS (Schedule 4)
This schedule provides space to show identifying information and
income distributable to the individual partners.
Enter for each partner: 1. Name; 2. Street and Number; 3. City, State
and Zip Code; 4. Social Security or Federal Identification Number;
5. Profit (Loss) sharing percentage (Enter the ending percentage
that is listed on the Federal K-1); 6. Georgia Source Income. If the
partnership has more than 5 partners, attach a separate schedule
for the additional partners in the same format.
Total Georgia source income may differ from total net income because
some of the partnership income (e.g., guaranteed payments) may
not be based on the profit sharing ratio, or the partner is a Georgia
resident. See example on page 5.
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