by Dave Williams | Dec 21, 2022 | Capitol Beat News Service
ATLANTA – Georgia’s tax credit for video game developers is paying off for the state’s economy, according to an audit released this week.
The General Assembly created the video game tax credit in 2005 as part of a broader tax credit for film and TV productions. Eligible game developers receive a 20% income tax credit plus an additional 10% if they add the Georgia Entertainment Logo to their game, like the extra credit filmmakers get for displaying the Georgia Peach logo at the end of their movies.
An average of 34 video game projects used the tax credit each year from 2017 to 2021, according to a report the Center for Business Analytics and Economic Research at Georgia Southern University prepared for the state Department of Audits and Accounts.
While game developers used $26 million in tax credits during that period, their projects generated $389.5 million in economic output. Companies using the credit also paid $7.4 million in state taxes and $5.6 million in local taxes during those years.
“Based on discussions with industry leaders, this tax credit is used to retain businesses and jobs in Georgia rather than attract new companies,” the audit stated. “The credit has played a role in developing successful companies that are creating new technologies that are strengthening Georgia’s IT and entertainment industries.”
The credit is capped at $12.5 million per year, while no individual company can receive more than $1.5 million in credits during a single year.
To qualify for the credit, companies must maintain a physical location in Georgia, maintain an annual payroll of at least $250,000 for in-state workers, and report a gross income of less than $100 million.
