The Freeport Exemption is an exemption on the inventory of
Georgia manufacturers, wholesalers, and distributors. This valuable exemption encourages manufacturing
and other base industries to locate, invest, and/or stay in Georgia. The citizens of each Georgia County vote on
whether the rate of the exemption is 20, 40, 60, 80 or 100 percent of the
inventory value. Georgia fiercely competes
with states such as Alabama and South Carolina that exempt ALL inventories. Make Georgia earn your tax dollars and your
business!
Inventory Eligible for Freeport Exemption
1. Raw
materials and work-in-progress inventory of Georgia manufacturers
Raw materials are components that significantly change during manufacturing or
processing to create a new product. Raw
materials can be grains, minerals, and petroleum or items such as casters,
nuts, bolts, or wheels.
2.
Finished
goods inventory of Georgia manufacturers that are held for less than 12 months
Most manufacturers do have some stock inventory on hand longer than 12
months from the manufacturing date.
Possible exceptions include companies that manufacture to order or use a
just-in-time inventory system.
3. Finished
goods inventory stored for less than 12 months in a warehouse, dock, or wharf,
with a final destination outside of Georgia
Drop shippers, distributors, and wholesalers usually qualify for the
exemption based on this stipulation.
4.
Retail inventory
does not qualify for this exemption!
Other ineligible items are fuel, packaging supplies, office supplies, spare
parts, retailer stock-in-trade, and unrecovered or unextracted natural
resources.
Freeport Exemption Process
The first step in qualifying for the exemption is to
complete the Freeport Exemption application (PT-50PF). Many Georgia companies lose out on Freeport
because they are unaware of the exemption or they miss the deadlines. Please note that the burden of obtaining, completing,
and filing the Freeport application form is entirely upon the taxpayer.
An appraiser from the Tax Assessors Office will usually schedule
a site visit for first time applicants to confirm the business purpose and
location. This necessary second step
allows the county appraiser to gather firsthand information about the
business. The site visit can be an excellent
opportunity to ask questions about the exemption, to clarify any issues, or to have
your tax consultant meet with the appraiser.
Lastly, the Tax Assessors Office will notify you once the
Freeport application submitted is approved by the Board of Tax Assessors. This approval does not mean that the Freeport
return will be accepted as filed. If
there are any errors, inconsistencies, or insufficient documentation on the
form, the exemption can be reduced or eliminated.
As Georgia recovers from the economic recession, business
owners are looking for ways to reinvest in their companies and to minimize taxes.
The Freeport Exemption is an incentive that
can complement your overall business tax strategy. Don’t
leave money on the table!
Snapshot
n Form: PT-50PF
n Who Should File: Businesses desiring Freeport Exemption in the
counties and municipalities where available.
n When to File:
n April 1st (100% of the full
exemption),
n April 2- April 30 (66.67%),
n May 1- May 31 (58.33%),
n June 1 (50%),
n Failure to file by June 1 shall
constitute a waiver of the entire exemption for the year (0.0%).
