HB229: HB229 Sales and use tax; exempt materials used in construction of capital outlay projects for educational purposes; provisions

26 LC 59 0463S The Senate Committee on Finance offered the following substitute to HB 229: A BILL TO BE ENTITLED AN ACT To amend Chapter 7 of Title 48 of the Official Code of Georgia Annotated, relating to1 income taxes, so as to exclude tips and overtime compensation from taxation; to provide for2 reporting by employers; to provide for rules and regulations; to provide for related matters;3 to repeal conflicting laws; and for other purposes.4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:5 SECTION 1.6 Chapter 7 of Title 48 of the Official Code of Georgia Annotated, relating to income taxes,7 is amended in subsection (a) of Code Section 48-7-27, relating to computation of taxable net8 income, by striking "and" at the end of paragraph (14), by repl acing the period with a9 semicolon at the end of paragraph (15), and by adding new paragraphs to read as follows:10 "(16)(A) For all taxable years beginning on or after January 1, 2026, and ending on11 December 31, 2028, any amount of qualified overtime compensation, as such term is12 defined in Section 225 of the Internal Revenue Code, received by a full-time employee13 paid by an hourly wage up to:14 (i) In the case of a married couple filing a joint return, $25,000.00; or15 - 1 - 26 LC 59 0463S (ii) In the case of a single taxpayer, head of household, or married taxpayer filing a16 separate return, $12,500.00.17 (B) Notwithstanding subparagraph (A) of this paragraph, for employers governed by18 the federal National Railway Labor Act, the exemption provided in this paragraph shall19 apply to hourly component overtime compensation as defined in applicable collective20 bargaining agreements.21 (C) The amount allowable as a deduction under subparagraph (A) or (B) of this22 paragraph shall be reduced, but not below zero, by $100.00 for each $1,000.00 by23 which a taxpayer's federal adjusted gross income increased by any amounts deducted24 under Sections 911, 931, or 933 of the Internal Revenue Code, exceeds:25 (i) In the case of a married couple filing a joint return, $300,000.00; or26 (ii) In the case of a single taxpayer, head of household, or married taxpayer filing a27 separate return, $150,000.00.28 (D) For each tax year beginning on or after January 1, 2026, a nd ending on29 December 31, 2028, each employer shall submit to the department, on forms prescribed30 by the department, the total amount of qualified overtime compe nsation received by31 full-time employees paid by an hourly wage and the total number of employees to32 which such compensation was paid. The data shall be provided monthly or quarterly33 and shall be due no later than the due date for the corresponding monthly or quarterly34 withholding tax returns, except that such data may be provided at the end of the year35 for the 2026 tax year.36 (E) The department may require additional information of emplo yers and shall be37 authorized to adopt rules and regulations to provide for the ad ministration of this38 paragraph.39 (F) This paragraph shall stand repealed and reserved on December 31, 2028; and40 (17)(A) For all taxable years beginning on or after January 1, 2026, any amount up41 to $25,000.00 received in cash tips.42 - 2 - 26 LC 59 0463S (B) The amount allowable as a deduction under subparagraph (A) of this paragraph43 shall be reduced, but not below zero, by $100.00 for each $1,00 0.00 by which a44 taxpayer's federal adjusted gross income increased by any amoun ts deducted under45 Sections 911, 931, or 933 of the Internal Revenue Code, exceeds:46 (i) In the case of a married couple filing a joint return, $300,000.00; or47 (ii) In the case of a single taxpayer, head of household, or married taxpayer filing a48 separate return, $150,000.00.49 (C) For each tax year beginning on or after January 1, 2026, e ach employer shall50 submit to the department, on forms prescribed by the department , the total amount51 received by employees in cash tips and the total number of empl oyees to which such52 compensation was paid. The data shall be provided monthly or quarterly and shall be53 due no later than the due date for the corresponding monthly or quarterly withholding54 tax returns, except that such data may be provided at the end of the year for the 202655 tax year.56 (D) The department may require additional information of emplo yers and shall be57 authorized to adopt rules and regulations to provide for the ad ministration of this58 paragraph.59 (E) As used in this paragraph, the term:60 (i) 'Cash tips' means cash received by an individual in an occupation that customarily61 and regularly receives tips, including tips received from custo mers that are paid in62 cash or charged and, in the case of an employee, tips received under any tip-sharing63 arrangement, but only if such amount is paid voluntarily without any consequence in64 the event of nonpayment, is not the subject of negotiation, and is determined by the65 payor.66 (ii) 'Occupation that customarily and regularly receives tips' means any occupation67 which has been designated as such and given a Treasury Tipped Occupation Code as68 set forth in the Federal Register by the secretary of the treasury of the United States.69 - 3 - 26 LC 59 0463S Occupations excluded under Section 63 of the Internal Revenue C ode shall also be70 excluded for purposes of this paragraph.71 (F) This paragraph shall stand repealed and reserved on December 31, 2028."72 SECTION 2.73 All laws and parts of laws in conflict with this Act are repealed.74 - 4 -