Atlanta City Council Exempts Manufacturers From

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Joshua P. Guterman
The Wilbert Group
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Atlanta City Council Exempts Manufacturers From Inventory Tax
City to match surrounding counties and increase competitiveness
ATLANTA (Dec. 11, 2013) – Last week, the Atlanta City Council passed an
ordinance to increase the freeport exemption for manufacturers and distributors
to 100 percent. The inventory tax exemption increase will remove the tax for
certain classes of goods destined for shipment outside of the state, equaling
exemptions in surrounding counties and cities. The move will help the City retain
manufacturing jobs while building the tax base and attracting new investment.
Manufacturing firms generate nearly $6 billion in sales each year, accounting for
more than 10 percent of all sales in the City of Atlanta. They employ more than
35,000 people, representing more than 6 percent of the City’s workforce. The
average wage for these middle class jobs is more than $76,000 per year.
New business, stronger investment and job growth spurred by the amended
freeport exemption will improve the City’s competitive position by attracting and
retaining manufacturing firms.
"Manufacturing is an important economic driver for the City, with great growth
potential if the right incentives exist," said Mayor Kasim Reed. “By eliminating the
inventory tax for manufacturers, we will be able to better grow our industrial
sector, and attract new investment in the City, which will create new jobs and
help us continue to strengthen our economy.”
Georgia is one of only 14 states with an inventory tax. Previously, the City offered
a 20 percent inventory tax exemption on raw material, work-in-process and
finished goods inventory. The annual revenue from those taxes was
approximately $2 million.
Since 2000, Atlanta has lost nearly 4,700 manufacturing industry jobs according
to a study by the Georgia Institute of Technology (Georgia Tech).
“In the last five years, dozens of manufacturing and logistics companies made
the decision to locate just outside of the City’s borders because surrounding
cities had a more favorable tax climate related to inventory,” said Brian P.
McGowan, president and CEO of Invest Atlanta. “Increasing the freeport
exemption is critical to our economic competitiveness, especially at a time when
the United States is seeing an increase in manufacturing and Atlanta is perfectly
positioned to be a major east coast logistics center. This will create more jobs for
our residents and more tax revenue for the City of Atlanta.”
The ordinance will go into effect Jan. 1, 2015.
About Invest Atlanta
Invest Atlanta is the official economic development authority for the City of Atlanta. Its
purpose is to strengthen Atlanta’s economy and global competitiveness in order to
create increased opportunity and prosperity for the people of Atlanta.
Chaired by the Mayor of Atlanta, and governed by a nine-member board of directors,
Invest Atlanta’s programs and initiatives focus on developing and fostering public/private
partnerships to create jobs, grow the economy, revitalize neighborhoods, attract
investment, spur innovation and encourage entrepreneurship. To achieve these goals,
Invest Atlanta leverages the benefits of bond financing, revolving loan funds, housing
financing, tax increment financing and tax credits.
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