Georgia Legislative Update
Georgia’s legislative session ended last week with the passage of several bills. These bills go to the Governor for signature or veto. If he takes no action for 40 days (by May 13), the bills will become law as of the legislation’s specified effective date.
There was significant debate about income and property tax reform to provide relief to taxpayers. HB 463 accelerates the decrease in individual income tax rates; increases the dependent deduction and the standard deduction; and provides for exclusions for tips, overtime, and retiree income. However, these individual income tax changes are offset by the elimination of several long-standing corporate income and sales tax credits and exemptions, to be eliminated as of the 2026 tax year. The data center sales tax exemption—that received significant attention this legislative session—did not pass, and that exemption will continue until its sunset in 2031. For property taxes, the legislature passed SB 33, which expands and limits tax on personal homesteads, but also authorizes an additional 1% local sales tax. Some have raised questions about the constitutionality of the legislative process to pass this bill, so it is one to watch for a potential gubernatorial veto.
The legislature passed a few other interesting bills. HB 134 creates a jobs credit against income tax for “forestry manufacturers.” Unlike other jobs credits, forestry manufacturers can sell their unused credits. This could create opportunities for taxpayers to offset Georgia income tax liabilities, in the way that Georgia’s other sellable credit—film—created a market for such credits. In light of the penny’s elimination, HB 1112 provides that no sales tax is due on transactions that are rounded up/down to the nearest nickel. Finally, the legislature passed HB 1247, which codifies the elimination of judicial deference to Georgia administrative agencies. While this is not a tax bill, it rebalances taxpayers’ ability to challenge the Department of Revenue’s tax policies, determinations, and regulations in court.
Authored by Alla Raykin
Picture Credit: “Georgia State Capitol, Atlanta, Georgia” by Ken Lund is licensed under CC BY-SA 2.0.
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