Georgia Film Credit

Georgia allows taxpayers to buy unused tax credits from film studios doing work in Georgia and take the credit on their tax return. You buy at the market rate which is currently around 89 cents on the dollar so you can get a dollar of credit for 89 cents. You have to pay capital gains tax on the difference when you utilize the credit. If you buy too much film credit for the current year, you have a 5 year carryover to use it up.

State Tax Credits

The IRS has issued final rules on the deductibility of state tax credits like the GA scholarship program and GA rural hospital credits. The rules are retroactive to August 27, 2018. Basically, the new rules say that no federal charitable deduction is allowed for these credits. However you can deduct these amounts as state income tax payments up to the new maximum limit of $10,000. You also still get the 100% state income tax credit. This change will make these credits less attractive to taxpayers.

Income Tax History

Our current income tax regime dates to 1913 when the Revenue Act of 1913 was enacted into law by democratic President Woodrow Wilson. Before 1913 the government was financed by tariffs, and there was no income tax. The purpose of the income tax was to allow for tariff reduction which was seen by the democrats as an unfair tax on consumers. Average tariff rates did go down from 40 percent to 26 percent. The Act established a normal income tax rate of 1% on the first $17,000 for single filers and $16,000 for married filers equivalent to $374,400 and $352,300 in 2010 dollars respectively. Income between $20,000 and $500,000 was taxed at rates of 2% to 6%. Income over $500,000 was taxed at the top rate of 7%. The income tax started out as a tax just on very high income taxpayers, and only 357,588 individual returns were filed for 1913. It wasn't until the 1940's  that the income tax was expanded to torment the middle class and payroll withholding was invented.