Georgia Code
Article 2 - Imposition, Rate, Computation, Exemptions, and Credits
§ 48-7-21. Taxation of Corporations

(7.1) (A) As used in this paragraph, the term:
The amount subtracted under this subparagraph shall be reduced by any expenses directly attributable to the dividend income; and
(10.1) Net operating losses for corporations shall be treated as follows:
(B) A Georgia affiliated group may elect to file a Georgia consolidated return on an originally filed return, including extensions, if applicable. Under no circumstances may the department compel a taxpayer to file a Georgia consolidated return if the taxpayer has not so elected.
(C) For purposes of allocation and apportionment, each member of a Georgia affiliated group shall be considered a separate taxpayer, and any taxable loss of a member of a Georgia affiliated group shall be deductible against the taxable income of any other member of the Georgia affiliated group only if and to the extent such loss is apportioned and allocated to Georgia.
(D) The tax liability of the Georgia affiliated group shall be determined by applying the rate specified in subsection (a) of this Code section to the group’s taxable income. The separate taxable income or loss of each corporation in the Georgia affiliated group shall be included in the consolidated taxable income or loss to the extent that its taxable income or loss is separately apportioned or allocated to the State of Georgia, as computed and determined in accordance with this chapter.
(E) Each corporation in a Georgia affiliated group that files a Georgia consolidated return shall be jointly and severally liable for the group’s Georgia income tax liability with respect to the taxable year, except that any corporation which was not a member of the Georgia affiliated group for the entire taxable year shall be jointly and severally liable only for the portion of the tax liability attributable to that part of the year during which the corporation was a member, prorated on a daily basis.
(F) The election provided for in this subsection is irrevocable and is binding on both the department and the Georgia affiliated group for a period of five years without modification, notwithstanding the powers granted to the department under this title. At the end of the five-year period of filing a Georgia consolidated return, the taxpayer’s election shall be automatically terminated. Upon the automatic termination of such election, the taxpayer may reelect to file a Georgia consolidated return.
(G) Notwithstanding subparagraph (F) of this paragraph, due to the material change in the law and the procedure for qualification as a member of a Georgia affiliated group, a Georgia affiliated group filing a Georgia consolidated return under the provisions of this paragraph prior to May 5, 2022, shall have the option either to terminate its election with respect to tax years after the period covered by the last Georgia consolidated return due under this Code section or to continue filing a Georgia consolidated return under the previous criteria.
(H) Nothing in this subsection shall be construed as allowing or requiring the filing of combined income tax returns under the unitary business concept.
History. Ga. L. 1931, Ex. Sess., p. 26, § 4; Code 1933, § 92-3102; Ga. L. 1935, p. 121, § 1; Ga. L. 1937, p. 109, § 3; Ga. L. 1937-38, Ex. Sess., p. 150, § 3; Ga. L. 1949, Ex. Sess., p. 18, § 1; Ga. L. 1953, Jan.-Feb. Sess., p. 625, § 1; Ga. L. 1955, Ex. Sess., p. 27, § 2; Ga. L. 1964, p. 67, § 1; Ga. L. 1969, p. 114, § 1; Ga. L. 1973, p. 924, § 3; Ga. L. 1976, p. 646, § 1; Ga. L. 1976, p. 980, § 1; Ga. L. 1977, p. 1133, § 2; Ga. L. 1979, p. 888, § 1; Code 1933, § 91A-3602, enacted by Ga. L. 1978, p. 309, § 2; Ga. L. 1979, p. 5, § 63; Ga. L. 1979, p. 888, § 3; Ga. L. 1982, p. 3, § 48; Ga. L. 1983, p. 1350, § 11; Ga. L. 1984, p. 22, § 48; Ga. L. 1984, p. 1644, § 1; Ga. L. 1987, p. 191, § 2; Ga. L. 1988, p. 13, § 48; Ga. L. 1993, p. 1649, § 1; Ga. L. 1996, p. 117, § 8; Ga. L. 1996, p. 130, § 8; Ga. L. 1996, p. 181, § 6; Ga. L. 1999, p. 13, § 1; Ga. L. 2000, p. 1445, § 1; Ga. L. 2005, p. 30, § 2/HB 191; Ga. L. 2005, p. 157, § 1/HB 282; Ga. L. 2005, p. 159, §§ 8-10, 11/HB 488; Ga. L. 2007, p. 271, § 1/SB 184; Ga. L. 2008, p. 898, § 4/HB 1151; Ga. L. 2009, p. 796, § 1/HB 379; Ga. L. 2010, p. 895, § 2/HB 1138; Ga. L. 2018, p. 8, §§ 1-4, 1-5, 1-6/HB 918; Ga. L. 2018, p. 113, § 1/SB 328; Ga. L. 2018, p. 319, § 1/HB 849; Ga. L. 2021, p. 277, § 1/HB 149; Ga. L. 2022, p. 352, § 48/HB 1428; Ga. L. 2022, p. 571, § 1/HB 1058.
The 2021 amendment, effective May 4, 2021, added subparagraph (b)(7)(C). See Editor’s notes for applicability.
The 2022 amendments.
The first 2022 amendment, effective May 2, 2022, part of an Act to revise, modernize, and correct the Code, revised punctuation in paragraph (b)(3) and subparagraph (b)(7)(B), and substituted “however, that such” for “however, such” in division (b)(7)(C)(iii). The second 2022 amendment, effective May 5, 2022, rewrote division (b)(7)(A)(i), which read: “Affiliated corporations which file a consolidated federal income tax return must file separate income tax returns with this state unless they have prior approval or have been requested to file a consolidated return by the department. The commissioner shall by regulation provide the time period within which the permission must be requested. A request for permission beyond such time period will not be considered and will result in the filing of separate income tax returns for the applicable year.”, and added paragraph (b)(7.1). See Editor’s notes for applicability.
Code Commission notes.
Pursuant to Code Section § 28-9-5 , in 2005, paragraph (b)(10) of this Code section, as enacted by Ga. L. 2005, p. 159, § 11, was redesignated as paragraph (b)(10.1).
Pursuant to Code Section 28-9-5, in 2021, “this Code section” was substituted for “ Code Section 48-7-21” in division (b)(7)(C)(ii).
Pursuant to Code Section 28-9-5, in 2022, “May 5, 2022,” was substituted for “the amendment by this Act” in subparagraph (b)(7.1)(G).
Editor’s notes.
Ga. L. 1983, p. 1350, § 15, not codified by the General Assembly, effective January 1, 1984, provides that, should subsection (e) of Code Section 48-6-93 or paragraph (11) of subsection (b) of Code Section 48-7-21 be declared invalid or unconstitutional, it is the intent of the General Assembly that the entire Act be held invalid and that the method of taxation affected by the Act revert to the method in effect prior to January 1, 1984.
Ga. L. 1984, p. 1644, § 4, not codified by the General Assembly, provided that that Act would apply to taxable years beginning on or after January 1, 1985.
Ga. L. 1987, p. 191, § 10, not codified by the General Assembly, provides that this Act is applicable to taxable years ending on or after March 11, 1987, and that a taxpayer with a taxable year ending on or after January 1, 1987, and before March 11, 1987, may elect to have the provisions of that Act apply.
Ga. L. 1987, p. 191, § 10, not codified by the General Assembly, also provided that tax, penalty, and interest liabilities and refund eligibility for prior taxable years shall not be affected by that Act.
Ga. L. 1987, p. 191, § 10, not codified by the General Assembly, also provided that provisions of the federal Tax Reform Act of 1986 and of the Internal Revenue Code of 1986 which as of January 1, 1987, were not yet effective become effective for purposes of Georgia taxation on the same dates as they become effective for federal purposes.
Ga. L. 1996, p. 117, § 9, not codified by the General Assembly, provides that the Act shall not repeal any provision of Ga. L. 1996, p. 130 if Ga. L. 1996, p. 130 is passed at the 1996 regular session of the General Assembly, becomes law, and becomes effective. Ga. L. 1996, p. 130 was passed at the 1996 Session and became effective January 1, 1997.
Ga. L. 1996, p. 130, § 9, not codified by the General Assembly, provided that the 1996 amendment became effective on January 1, 1997, and shall be applicable to all taxable years beginning on or after January 1, 1996, upon the ratification of House Resolution 734 at the November, 1996, general election. House Resolution 734 was ratified in 1996.
Ga. L. 1996, p. 130, § 9, not codified by the General Assembly, provides, in part, that the provisions of the Act shall not repeal but shall supersede and control over any conflicting provisions of any other Act enacted at the 1996 regular session, including, but not limited to, Ga. L. 1996, p. 117.
Ga. L. 1996, p. 181, § 10, not codified by the General Assembly, provides for a study and report by the state revenue commissioner regarding the effect of the Act on revenue received by the state, counties, and cities in 1997 and 1998 from the tax imposed by Article 4 of Chapter 6 of Title 48 of the Code.
Ga. L. 2000, p. 1445, § 5, not codified by the General Assembly, provides that this Act shall apply to all taxable years beginning on or after January 1, 2001.
Ga. L. 2005, p. 30, § 7(a)/HB 191, not codified by the General Assembly, provides that the 2005 amendment to paragraph (b)(10) shall be applicable to all taxable years beginning on or after January 1, 2006.
Ga. L. 2005, p. 157, § 4/HB 282, not codified by the General Assembly, provides that this Act shall apply to all taxable years beginning on or after January 1, 2005.
Ga. L. 2005, p. 159, § 1/HB 488, not codified by the General Assembly, provides that: “This Act shall be known and may be cited as the ‘State and Local Tax Revision Act of 2005.’ ”
Ga. L. 2005, p. 159, § 27(c)/HB 488, not codified by the General Assembly, provides that the 2005 amendments to division (b)(1)(B) and (b)(10.1) shall apply to all taxable years beginning on or after January 1, 2005.
Ga. L. 2005, p. 159, § 27(h)/HB 488, not codified by the General Assembly, provides that the 2005 amendment to paragraph (b)(5) shall apply to all taxable years beginning on or after January 1, 2004.
Ga. L. 2008, p. 898, § 13/HB 1151, not codified by the General Assembly, provides that the amendment to this Code section shall be applicable to all taxable years beginning on or after January 1, 2008.
Ga. L. 2009, p. 796, § 4/HB 379, not codified by the General Assembly, provides, in part, that the amendment by that Act shall be applicable to all taxable years beginning on or after January 1, 2010.
Ga. L. 2010, p. 895, § 4(c)/HB 1138, not codified by the General Assembly, provides that the 2010 amendment shall apply with respect to stock purchases and sales occurring on or after June 3, 2010.
Ga. L. 2018, p. 8, § 3-1(a), (b)/HB 918, not codified by the General Assembly, provides that: “(a) Sections 1-1, 1-6, and 1-8 of this Act shall become effective upon the approval of this Act by the Governor or upon this Act becoming law without such approval and such sections shall be applicable to all taxable years beginning on or after January 1, 2017.
“(b) Sections 1-2 and 1-4 of this Act shall become effective upon the approval of this Act by the Governor or upon this Act becoming law without such approval and shall be applicable to all taxable years beginning on or after January 1, 2019. Sections 1-2 and 1-4 of this Act shall expire by operation of law on the last moment of December 31, 2025, and revert to the language of paragraph (1) of subsection (b) of Code Section 48-7-20 and subsection (a) of Code Section 48-7-21, respectively, as they existed on the day immediately preceding the effective date of this Act.” This Act became effective March 2, 2018. Section 1-4 substituted “5.75 percent” for “6 percent” near the end of the first sentence of subsection (a). Section 1-5 substituted “5.5 percent” for “5.75 percent” near the end of the first sentence of subsection (a).
Ga. L. 2018, p. 8, § 3-1(c)/HB 918, not codified by the General Assembly, provides, in part, that this Act “shall become effective upon passage of a joint resolution that is signed by the Governor ratifying such sections by both houses of the Georgia General Assembly on or after January 13, 2020, and upon such passage shall be applicable to all taxable years beginning on or after January 1, 2020. Should Sections 1-3 and 1-5 of this Act become effective as prescribed in the foregoing, both sections shall expire by operation of law on the last moment of December 31, 2025, and revert to the language of paragraph (1) of subsection (b) of Code Section 48-7-20 and subsection (a) of Code Section 48-7-21, respectively, as they existed on the day immediately preceding the effective date of this Act.” Subsection (a), as amended by Ga. L. 2018, p. 8, § 1-5/HB 918, is not set out owing to the delayed effective date. If a joint resolution as described herein is passed and signed by the Governor, subsection (a) will read as follows: “Every domestic corporation and every foreign corporation shall pay annually an income tax equivalent to 5.5 percent of its Georgia taxable net income. Georgia taxable net income of a corporation shall be the corporation’s taxable income from property owned or from business done in this state. A corporation’s taxable income from property owned or from business done in this state shall consist of the corporation’s taxable income as defined in the Internal Revenue Code of 1986, with the adjustments provided for in subsection (b) of this Code section and allocated and apportioned as provided in Code Section 48-7-31.” As of May 2022, a joint resolution has not passed.
Ga. L. 2018, p. 113, § 5/SB 328, not codified by the General Assembly, provides that the amendment of this Code section by that Act shall be applicable to all taxable years beginning on or after January 1, 2018.
Ga. L. 2018, p. 113, § 1/SB 328, purported to amend O.C.G.A. § 48-7-21 but actually amended O.C.G.A. § 48-7-21 as amended by Ga. L. 2018, p. 8, §§ 1-4, 1-5, and 1-6/HB 918, signed by the Governor on March 2, 2018, and designated as Act 284.
Ga. L. 2021, p. 277, § 7/HB 149, not codified by the General Assembly, provides, in part, that: “This Act shall be applicable to all taxable years beginning on or after January 1, 2022.”
Ga. L. 2022, p. 114, § 4-1/HB 1437, not codified by the General Assembly, repeals and reserves Ga. L. 2018, p. 8, §§ 1-3, 1-5/HB 918.
Ga. L. 2022, p. 114, § 4-1/HB 1437, not codified by the General Assembly, revises subsection (a) of Ga. L. 2018, p. 8, § 3-1/HB 918 to read in pertinent part: “(2) Section 1-6 of this Act shall become effective upon the approval of this Act by the Governor or upon this Act becoming law without such approval and such section shall be applicable to all taxable years beginning on or after January 1, 2017; provided, however, that the revisions to Code Section 48-7-21 made by Section 1-6 of this Act shall be subject to the revisions made by Acts approved by the Governor or that became or become law without such approval after March 2, 2018, and became or become applicable to tax years beginning on or after January 1, 2017.” and revises subsection (b) of Ga. L. 2018, p. 8, § 3-1/HB 918 to read in pertinent part: “(2) Section 1-4 of this Act shall become effective upon the approval of this Act by the Governor or upon this Act becoming law without such approval and shall be applicable to all taxable years beginning on January 1, 2019, and ending December 31, 2019; provided, however, that the revisions to Code Section 48-7-21 made by Section 1-4 of this Act shall be subject to the revisions made by Acts approved by the Governor or that became or become law without such approval after March 2, 2018, and became or become applicable to tax years beginning on or after January 1, 2020.”
Ga. L. 2022, p. 571, § 3/HB 1058, not codified by the General Assembly, makes division (b)(7)(A)(i) and paragraph (b)(7.1) applicable to taxable years beginning on or after January 1, 2023.
U.S. Code.
The Internal Revenue Code, referred to throughout this Code section, is codified as 26 U.S.C. § 1 et seq.
Subchapter “S” of the Internal Revenue Code, referred to in paragraph (b)(7) of this Code section, is codified at 26 U.S.C. § 1361 et seq.
Administrative rules and regulations.
Taxation of corporations, Official Compilation of the Rules and Regulations of the State of Georgia, Department of Revenue, Income Tax Division, § 560-7-3-.06.
Consolidated returns, Official Compilation of the Rules and Regulations of the State of Georgia, Department of Revenue, Income Tax Division, Substantive Regulations, § 560-7-3-.13.
Law reviews.
For comment on Williams v. Stockham Valves & Fittings, Inc., 358 U.S. 450, 79 S. Ct. 357 , 3 L. Ed. 2 d 421 (1959), upholding constitutionality of state net income tax levied on revenues of foreign corporation derived from interstate commerce where tax is “fairly apportioned,” see 22 Ga. B. J. 107 (1959).
For article, “Foreign Corporations in Georgia,” see 10 Ga. St. B.J. 243 (1973).
For article, “Primary Tax Incentives for Industrial Investment in the Southeastern United States,” see 25 Emory L.J. 789 (1976).
For article surveying Georgia cases in the area of business associations from June 1977 through May 1978, see 30 Mercer L. Rev. 1 (1978).
For article, “Common State Tax Pitfalls in the Acquisition or Disposition of Businesses in Georgia,” see 22 Ga. St. B. J. 82 (1985).
For article, “Issues and Opportunities Under Georgia’s Updated Income Tax Provisions,” see 25 Ga. St. B. J. 144 (1989).
For note on 1993 amendment of this Code section, see 10 Georgia St. U.L. Rev. 218 (1993).
For review of 1996 revenue and taxation legislation, see 13 Georgia St. U.L. Rev. 294 (1996).
For article, “Post-Creation Checklist for Georgia Business Entities,” see 9 Ga. St. B. J. 24 (2004).
For annual survey of law on administrative law, see 62 Mercer L. Rev. 1 (2010).
For article, “Revenue and Taxation: Amend Titles 48, 2, 28, 33, 36, 46, and 50 of the Official Code of Georgia Annotated, Relating Respectively to Revenue and Taxation, Agriculture, the General Assembly, Insurance, Local Government, Public Utilities, and State Government,” see 28 Georgia St. U.L. Rev. 217 (2011).

Structure Georgia Code