HB66: HB66 Ad valorem tax; expand definition of rental motor vehicle

26 LC 59 0416S The Senate Committee on Finance offered the following substitute to HB 66: A BILL TO BE ENTITLED AN ACT To amend Article 2A of Chapter 8 of Title 48 of the Official Co de of Georgia Annotated,1 relating to homestead option sales and use tax, so as to provide for an alternative homestead2 option sales tax; to provide for a distribution of the proceeds from the levy of an alternative3 homestead option sales and use tax; to provide for the levy of a special purpose local option4 sales and use tax in certain counties; to provide for a referendum; to provide for procedures,5 conditions, and limitations; to provide for a short title; to provide for definitions; to provide6 for related matters; to repeal conflicting laws; and for other purposes.7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:8 SECTION 1.9 Article 2A of Chapter 8 of Title 48 of the Official Code of Geo rgia Annotated, relating to10 homestead option sales and use tax, is amended by adding a new part to read as follows:11 - 1 - 26 LC 59 0416S "Part 412 48-8-109.25.13 (a) This part shall be known and may be cited as the 'Alternative Homestead Option Sales14 and Use Tax Act of 2026.'15 (b) As used in this part, the term:16 (1) 'Existing municipality' means a municipality created prior to January 1, 2027, lying17 wholly within or partially within a county.18 (2) 'Homestead' means homestead as defined and qualified in Code Section 48-5-40, with19 the additional qualification that it shall include only the primary residence and not more20 than five contiguous acres of land immediately surrounding such residence.21 (3) 'Qualified municipality' means a municipality created on o r after January 1, 2027,22 lying wholly within or partially within a county.23 (c) It is the intent of the General Assembly that the proceeds of the alternative homestead24 option sales and use tax be distributed equitably to the counties and qualified municipalities25 such that the residents of a new incorporated municipality will continue to receive a benefit26 from that tax substantially equal to the benefit they would have received if the area covered27 by the municipality had not incorporated. The provisions of th is part shall be liberally28 construed to effectuate such intent.29 48-8-109.26.30 (a) Pursuant to the authority granted by Article IX, Section I I, Paragraph VI of the31 Constitution of this state, there are created within this state 159 special districts. The32 geographical boundary of each count y shall correspond with and shall be conterminous33 with the geographical boundary of one of the 159 special districts.34 (b)(1) When the imposition of a local sales and use tax is aut horized according to the35 procedures provided in this part within a special district, the county whose geographical36 - 2 - 26 LC 59 0416S boundary is conterminous with that of the special district shall levy a local sales and use37 tax at the rate of 1 percent, except as provided in paragraph (2) of this subsection. Except38 as to rate, the local sales and use tax shall correspond to the tax imposed and administered39 by Article 1 of this chapter. No item or transaction which is not subject to taxation by40 Article 1 of this chapter shall be subject to the sales and use tax levied pursuant to this41 part, except that the sales and use tax provided in this part shall be applicable to sales of42 motor fuels as prepaid local tax as such term is defined in Code Section 48-8-2 and shall43 be applicable to the sale of food and food ingredients and alcoholic beverages only to the44 extent provided for in paragraph (57) of Code Section 48-8-3.45 (2) Such sales and use tax levied on sales of motor fuels as d efined in Code46 Section 48-9-2 shall be at the rate of 1 percent of the retail sales price of the motor fuel47 which is not more than $3.00 per gallon.48 (c) The proceeds of the sales and use tax levied and collected under this part shall be used49 only for the purposes of funding capital outlay projects and of funding services within a50 special district equal to the revenue lost to the homestead exemption as provided in Code51 Section 48-8-109.27 and, in the event excess funds remain following the expenditure for52 such purposes, such excess funds shall be expended as provided in subparagraph (c)(2)(C)53 of Code Section 48-8-109.27.54 (d)(1) Such sales and use tax shall only be levied in a specia l district following the55 enactment of a local Act which provides for a homestead exemption of an amount to be56 determined from the amount of sales and use tax collected under this part. Such57 exemption shall commence with taxable years beginning on or after January 1 of the year58 immediately following the first complete calendar year in which the sales and use tax59 under this part is levied. Any such local Act shall incorporate by reference the terms and60 conditions specified under this part. Any such local Act shall not be subject to the61 provisions of Code Section 1-3-4.1. Any such homestead exemption under this part shall62 be in addition to and not in lieu of any other homestead exemption applicable to county63 - 3 - 26 LC 59 0416S taxes for county purposes within the special district. Notwithstanding any provision of64 such local Act to the contrary, the referendum which shall othe rwise be required to be65 conducted under such local Act shall only be conducted if the resolution required under66 this part is adopted prior to the issuance of the call for the referendum under the local Act67 by the election superintendent. If such ordinance is not adopt ed by that date, the68 referendum otherwise required to be conducted under the local A ct shall not be69 conducted.70 (2) Such sales and use tax and the associated homestead exemption shall terminate ten71 years after the date such sales and use tax is first collected; provided, however, that72 nothing in this subsection shall prevent subsequent sales and u se taxes or homestead73 exemptions from being adopted pursuant to this part in the same manner as provided in74 this part for the initial adoption of such sales and use tax and homestead exemption.75 (3) No sales and use tax shall be levied in a special district under this part in which a tax76 is levied and collected under Article 2 of this chapter.77 (e) Whenever the governing authority of any county whose geogr aphical boundary is78 conterminous with that of the special district wishes to submit to the electors of the special79 district the question of whether the sales and use tax authoriz ed by this part shall be80 imposed, any such governing authority shall notify the election superintendent of the81 county whose geographical boundary is conterminous with that of the special district by82 forwarding to the superintendent a copy of a resolution of the governing authority calling83 for a referendum election. Upon receipt of the resolution, it shall be the duty of the election84 superintendent to issue the call for an election for the purpose of submitting the question85 of the imposition of the sales and use tax to the voters of the special district for approval86 or rejection. The election superintendent shall issue the call and shall conduct the election87 on a date and in the manner authorized under Code Section 21-2-540. Such election shall88 only be conducted on the date of and in conjunction with a refe rendum provided for by89 local Act on the question of whether to impose a homestead exemption within such county90 - 4 - 26 LC 59 0416S and based on the amount of proceeds from the sales and use tax levied and collected91 pursuant to this part. The election superintendent shall cause the date and purpose of the92 election to be published once a week for two weeks immediately preceding the date of the93 election in the official organ of such county. The ballot shal l have written or printed94 thereon the following statement which shall precede the ballot question specified in this95 subsection and the ballot question specified by the required local Act:96 'NOTICE TO ELECTORS: Unless BOTH the alternative homestead exemption AND97 the retail homestead option sales and use tax are approved, then neither the exemption nor98 the sales and use tax shall become effective.'99 Such statement shall be followed by the following:100 '( ) YES101 102 ( ) NO103 104 105 106 Shall a retail homestead option sales and use tax of 1 percent be levied within the special district within _____________ County for the purposes of funding capital outlay projects and of funding serv ices to replace revenue lost to an additional homestead exemption of up to 100 percent of the assessed value of homesteads from county taxes f or county purposes?' Notwithstanding any other provision of law to the contrary, the statement, ballot question,107 and local Act ballot question referred to in this subsection shall precede any and all other108 ballot questions calling for the levy or imposition of any other sales and use tax which are109 to appear on the same ballot.110 (f) All persons desiring to vote in favor of levying the sales and use tax shall vote 'Yes,'111 and those persons opposed to levying the tax shall vote 'No.' If more than one-half of the112 votes cast are in favor of levying the tax and approving the lo cal Act providing such113 homestead exemption, then the tax shall be levied in accordance with this part; otherwise,114 the sales and use tax may not be levied, and the question of the imposition of the sales and115 use tax may not again be submitted to the voters of the special district until after 24 months116 immediately following the month in which the election was held. It shall be the duty of the117 - 5 - 26 LC 59 0416S election superintendent to hold and conduct such elections unde r the same rules and118 regulations as govern special elections. It shall be the super intendent's further duty to119 canvass the returns, declare the result of the election, and certify the result to the Secretary120 of State and to the commissioner. The expense of the election shall be borne by the county121 whose geographical boundary is conterminous with that of the special district holding the122 election.123 (g) If the imposition of the sales and use tax provided in thi s part is approved in a124 referendum election as provided by subsections (e) and (f) of t his Code section, the125 governing authority of the county whose geographical boundary is conterminous with that126 of the special district shall adopt a resolution within 30 days after the certification of the127 result of the election imposing the sales and use tax authorized by this part on behalf of the128 county whose geographical boundary is conterminous with that of the special district. The129 resolution shall be effective on the first day of the next succeeding calendar quarter which130 begins more than 50 days after the adoption of the resolution. With respect to services131 which are billed on a regular monthly basis, however, the resolution shall become effective132 with the first regular billing period coinciding with or follow ing the otherwise effective133 date of the resolution. A certified copy of the resolution sha ll be forwarded to the134 commissioner so that it will be received within five days after its adoption.135 (h) Within 30 days of the conclusion of a year in which the sale and use tax provided in136 this part is collected, the county shall post a report in a pro minent place on its website137 detailing how much money was collected in the past year by such sale and use tax, the138 value of homesteads reduced by such sales and use tax collectio ns, and any other139 information that may be required by the commissioner in rules a dopted pursuant to140 subsection (d) of Code Section 48-8-109.28. The county shall also deliver a copy of this141 report to each member of the General Assembly whose district in cludes any part of the142 county.143 - 6 - 26 LC 59 0416S 48-8-109.27.144 (a) The sales and use tax levied pursuant to this part shall be exclusively administered and145 collected by the commissioner for the use and benefit of each county whose geographical146 boundary is conterminous with that of a special district. Such administration and collection147 shall be accomplished in the same manner and subject to the same applicable provisions,148 procedures, and penalties provided in Article 1 of this chapter except that the sales and use149 tax provided in this part shall be applicable to sales of motor fuels as prepaid local tax as150 such term is defined in Code Section 48-8-2; provided, however, that all moneys collected151 from each taxpayer by the commissioner shall be applied first to such taxpayer's liability152 for taxes owed the state. Dealers shall be allowed a percentage of the amount of the sales153 and use tax due and accounted for and shall be reimbursed in th e form of a deduction in154 submitting, reporting, and paying the amount due if such amount is not delinquent at the155 time of payment. The deduction shall be at the rate and subjec t to the requirements156 specified under subsections (b) through (f) of Code Section 48-8-50.157 (b) Each sales and use tax return remitting sales and use taxe s collected under this part158 shall separately identify the location of each retail establishment at which any of the sales159 and use taxes remitted were collected and shall specify the amount of sales and the amount160 of taxes collected at each establishment for the period covered by the return in order to161 facilitate the determination by the commissioner that all sales and use taxes imposed by this162 part are collected and distributed according to situs of sale.163 (c) The proceeds of the sales and use tax collected by the com missioner in each special164 district under this part shall be disbursed as soon as practicable after collection as follows:165 (1) One percent of the amount collected shall be paid into the general fund of the state166 treasury in order to defray the costs of administration; and167 (2) Except for the percentage provided in paragraph (1) of this subsection, the remaining168 proceeds of the sales and use tax shall be distributed to the g overning authority of the169 county whose geographical boundary is conterminous with that of the special district. As170 - 7 - 26 LC 59 0416S a condition precedent for the authority to levy the sales and u se tax or to collect any171 proceeds from the tax authorized by this part for the year foll owing the first complete172 calendar year in which it is levied and for all subsequent years except the year following173 the year in which the year in which the sales and use tax is terminated, the county whose174 geographical boundary is conterminous with that of the special district shall, except as175 otherwise provided in subsection (c) of Code Section 48-8-109.26, expend such proceeds176 as follows:177 (A) A portion of such proceeds shall be expended for the purpo se of funding capital178 outlay projects as follows:179 (i) Prior to the beginning of each calendar year, the governing authority of the county180 whose geographical boundary is conterminous with that of the sp ecial district shall181 establish the capital factor which shall not exceed .250;182 (ii) Capital outlay projects shall be funded in an amount equal to the product of the183 capital factor multiplied by the net amount of the sales and use tax proceeds collected184 under this part during the previous calendar year, and this amount shall be referred to185 as capital outlay proceeds;186 (iii) The total portion, if any, to be paid to existing munici palities from the capital187 outlay proceeds shall be determined as follows:188 (I) If the sales and use tax provided for in Part 1 of Article 3 of this chapter is189 currently levied and collected within such county, such portions shall be determined190 for each existing municipality by applying the percentage used for that191 municipality's portion of the proceeds of such sales and use ta x received by such192 county from the commissioner in each month to the capital outla y portion of the193 proceeds of the sales and use tax provided for by this article received from the194 commissioner in the same month;195 (II) If a new municipality is incorporated within the county, such newly196 incorporated municipality shall receive a portion of each month 's capital outlay197 - 8 - 26 LC 59 0416S proceeds that is equal to the population of such municipality within such county as198 a percentage of the total population of the county, as such pop ulations are199 determined based upon the most recently published decennial United States Census,200 and the portion of such capital outlay proceeds received by the county and the201 existing municipalities shall be reduced in proportion to their populations within202 such county; or203 (III) If the sales and use tax provided for in Part 1 of Article 3 of this chapter is not204 levied or collected within such county, the capital outlay portion of the sales and use205 tax provided for in this article shall be distributed to the mu nicipalities located206 wholly or partially within the county based upon the population s of such207 municipalities that are located within the county as a percenta ge of the total208 population of such county, as such populations are determined based upon the most209 recently published decennial United States Census; and210 (iv) Capital outlay projects funded by this part undertaken by the county shall be211 limited to road improvement projects; provided, however, that nothing in this division212 shall limit the scope of capital outlay projects undertaken by a qualified municipality;213 and214 (B) A portion of such proceeds shall be expended for the purpose of funding services215 within the special district equal to the revenue lost to the ho mestead exemption as216 provided in this Code section as follows:217 (i) Within 30 days of the end of the calendar year, the govern ing authority of such218 county shall calculate the homestead factor for that period by multiplying the quantity219 1.000 minus the capital factor for that period, and then dividi ng by the taxes to be220 levied in the current tax year for county maintenance and opera tions on only that221 portion of the county's tax digest levied for maintenance and o perations that222 represents net assessments on qualified homestead property after all other homestead223 exemptions have been applied, rounding the result to three decimal places;224 - 9 - 26 LC 59 0416S (ii) If the homestead factor is less than or equal to 1.000, the amount of homestead225 exemption created for the current tax year under this part on q ualified homestead226 property shall be equal to the product of the homestead factor multiplied times the net227 assessment of each qualified homestead remaining after all othe r homestead228 exemptions have been applied; and229 (iii) If the homestead factor is greater than 1.000, the homestead exemption created230 for the current tax year by this part on qualified homestead property shall be equal to231 the net assessment of each homestead remaining after all other homestead exemptions232 have been applied; and233 (C) If any of such proceeds re main following the distribution provided for in234 subparagraphs (A) and (B) of this paragraph:235 (i) The millage rate levied for county maintenance and operation purposes shall be236 rolled back in an amount equal to such excess divided by the ne t taxable digest for237 county purposes after deducting all homestead exemptions including the exemption238 under this part; and239 (ii) In the event the rollback created by division (i) of this subparagraph exceeds the240 millage rate for county maintenance and operation purposes, the governing authority241 of the county whose boundary is conterminous with the special d istrict shall be242 authorized to expend the surplus funds for funding all or any portion of those services243 which are to be provided by such governing authorities pursuant to and in accordance244 with Article IX, Section II, Paragraph III of the Constitution of this state.245 (d) For illustration purposes, a hypothetical example of the calculation is provided below.246 First, calculate the homestead factor in accordance with247 division (c)(2)(B)(i) of this Code section as follows:248 (A) Capital factor certified by county as required by249 subsection (c) of this Code section250 0.150 - 10 - 26 LC 59 0416S (B) Net amount of sales and use tax collected in the251 special district pursuant to this part for the previous252 calendar year253 $ 50 million (C) Taxes levied for county purposes on only that portion254 of the county tax digest that represents net assessments on255 qualified homestead property after all other homestead256 exemptions have been applied257 $100 million (D) Calculation of homestead factor using figures above258 = [(1-.0150)($50 million/$100 million)]259 .425 48-8-109.28.260 (a) Where a local sales or use tax has been paid with respect to tangible personal property261 by the purchaser either in another local tax jurisdiction withi n t h i s s t a t e o r i n a t a x262 jurisdiction outside this state, the sales and use tax may be credited against the sales and263 use tax authorized to be imposed by this part upon the same pro perty. If the amount of264 sales or use tax so paid is less than the amount of the use tax due under this part, the265 purchaser shall pay an amount equal to the difference between the amount paid in the other266 tax jurisdiction and the amount due under this part. The commissioner may require such267 proof of payment in another local tax jurisdiction as the commissioner deems necessary and268 proper. No credit shall be granted, however, against the sales and use tax imposed under269 this part for tax paid in another jurisdiction if the sales and use tax paid in such other270 jurisdiction is used to obtain a credit against any other local sales and use tax levied in the271 special district or in the county which is conterminous with the special district; and sales272 and use taxes so paid in another jurisdiction shall be credited first against the sales and use273 tax levied under this part and then against the sales and use t ax levied under Article 3 of274 this chapter, if applicable.275 - 11 - 26 LC 59 0416S (b) No sales and use tax provided for in Code Section 48-8-109.26 shall be imposed upon276 the sale of tangible personal property which is ordered by and delivered to the purchaser277 at a point outside the geographical area of the special district in which the sales and use tax278 is imposed under this part regardless of the point at which tit le passes, if the delivery is279 made by the seller's vehicle, United States mail, or common carrier or by private or contract280 carrier licensed by the Federal Motor Carrier Safety Administra tion or the Georgia281 Department of Public Safety.282 (c)(1) As used in this subsection, the term 'building and cons truction materials' means283 all building and construction materials, supplies, fixtures, or equipment, any combination284 of such items, and any other leased or purchased articles when the materials, supplies,285 fixtures, equipment, or articles are to be utilized or consumed during construction or are286 to be incorporated into construction work pursuant to a bona fi de written construction287 contract.288 (2) No sales and use tax provided for in Code Section 48-8-109.26 shall be imposed in289 a special district upon the sale or use of building and constru ction materials when the290 contract pursuant to which the materials are purchased or used was advertised for bid291 prior to approval of the levy of the sales and use tax by the county whose geographical292 boundary is conterminous with that of the special district and the contract was entered293 into as a result of a bid actually submitted in response to the advertisement prior to294 approval of the levy of the sales and use tax.295 (d) The commissioner shall have the power and authority to pro mulgate such rules and296 regulations as shall be necessary for the effective and efficie nt administration and297 enforcement of the collection of the sales and use tax authoriz ed to be imposed by this298 part."299 SECTION 2.300 All laws and parts of laws in conflict with this Act are repealed.301 - 12 -