Georgia Enacts Partnership Audit Law Based on Federal Policy

Daily Tax Report: State provides authoritative coverage of state and local tax developments across the 50 U.S. states and the District of Columbia, tracking legislative and regulatory updates,...

By Chris Marr

Georgia business partnerships facing tax audits will follow similar procedures at the state and federal levels after the state became one of the first to enact an audit law largely mirroring the new federal policy.

The state’s new partnership audit law takes effect immediately, now that Gov. Nathan Deal (R) has signed H.B. 849.

H.B. 849 largely conforms the state’s partnership audit procedures to those of a new federal audit regime taking effect for the 2018 tax year. The new federal law was created by the Bipartisan Budget Act of 2015. The new process generally centralizes federal audits at the partnership level, replacing a process of partner-by-partner audits.

Georgia’s law looks to be the first to largely conform to a model audit policy that a coalition of business-centric tax groups is working to finalize, the Council On State Taxation told Bloomberg Tax after the Legislature passed H.B. 849.

Legislatures in Minnesota and California are considering similar partnership audit bills.

Arizona, the first state to enact audit policies in response to the federal changes, has been criticized by business groups for acting too quickly and failing to address many of the technical wrinkles ironed out by the model audit statute that inspired Georgia, California, and Minnesota lawmakers.

Georgia’s governor signed the bill May 3. His office announced the bill signing May 8, the final day of his bill-signing period.

Georgia’s law sets deadlines for paying adjustments to the state and provides that a partnership’s federal representative would be considered to be its state-level representative too, unless the partnership notifies the Georgia Department of Revenue otherwise. H.B. 849 also clarifies that the final determination date—after which partnerships are required to make filings and adjusted payments—comes when all opportunities for appeal have been exhausted or waived.

To contact the reporter on this story: Chris Marr in Atlanta at cmarr@bloomberglaw.com

To contact the editor responsible for this story: Ryan C. Tuck at rtuck@bloombergtax.com

For More Information

Text of H.B. 849 is at http://src.bna.com/yDM.

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