HB370: HB370 Ad valorem tax; school districts; state-wide base year homestead exemption; provisions

This version of HB 370, despite its title referencing property tax homestead exemptions, actually rewrites a reserved section of Georgia's income tax code to create a new tax credit. The credit is aimed at employers with fewer than 50 employees that offer an individual coverage health reimbursement arrangement (ICHRA), a type of benefit where employers give workers money to buy their own health insurance instead of offering a traditional group plan. To qualify, an employer must contribute at least $200 per month per covered employee and must not reduce its contribution compared to what it spent on that employee's coverage the previous year. The credit starts at $600 per employee for the first three years, drops to $400 in year four and $200 in year five, and cannot be claimed for more than five years per employer. Employers must apply for preapproval each year by October 1, and total statewide credits are capped at $5 million annually. The credit applies to tax years beginning on or after January 1, 2026, and the underlying Code section repeals itself on December 31, 2028.

• Creates a new Georgia income tax credit for employers with fewer than 50 employees that contribute at least $200 per month per employee to an individual coverage health reimbursement arrangement (ICHRA).
• Sets a declining credit schedule: $600 per covered employee in years one through three, $400 in year four, and $200 in year five, with a five-year maximum per employer.
• Caps the total amount of credits the state will allow across all employers at $5 million per year.
• Requires employers to apply for preapproval by October 1 each year and receive certification from the Department of Revenue by November 1.
• Allows pass-through entities such as partnerships to pass the credit to their members, shareholders, or partners based on ownership share.
• Automatically repeals this tax credit provision on December 31, 2028.

Small Georgia employers with fewer than 50 employees that offer individual coverage health reimbursement arrangements, their covered employees who are Georgia residents, pass-through business owners such as partners and shareholders, and the Georgia Department of Revenue, which must review applications and issue preapproval certificates.

Small businesses that help employees buy individual health insurance through an ICHRA could receive a state tax credit worth up to $600 per employee annually, potentially making this benefit approach more affordable, while the $5 million annual cap and October application deadline mean not every eligible employer is guaranteed to receive the credit.

• Section 1 rewrites O.C.G.A. § 48-7-40.10 to define 'qualified taxpayer' as an employer with fewer than 50 employees offering an ICHRA.
• Subsection (b) requires at least $200 per month in contributions per covered employee and bars reducing contributions from the prior year's health benefit spending.
• Subsection (c) sets the credit amount on a declining five-year schedule from $600 down to $200 per employee, with no more than five years of credit per employer.
• Subsection (d) caps total statewide credits at $5 million per year.
• Subsection (e) requires preapproval applications by October 1 and certification by the Department of Revenue by November 1, prioritizing employers who already claim the credit.
• Subsection (i) repeals and reserves this Code section on December 31, 2028.
• Section 2 makes the Act effective July 1, 2025, applicable to tax years beginning on or after January 1, 2026.

1. 2025-04-04House Agreed Senate Amend or Sub As Amended (House)
2. 2025-04-02Senate Passed/Adopted By Substitute (Senate)
3. 2025-04-02Senate Third Read (Senate)
4. 2025-04-02Senate Taken from Table (Senate)
5. 2025-04-02Senate Tabled (Senate)
6. 2025-04-02Senate Engrossed (Senate)
7. 2025-03-27Senate Read Second Time (Senate)
8. 2025-03-27Senate Committee Favorably Reported By Substitute (Senate)

• Houston Gaines (R, HD-120)Primary sponsor
• Jan Jones (R, HD-047)
• Bruce Williamson (R, HD-112)
• Chuck Efstration (R, HD-104)
• Trey Kelley (R, HD-016)
• Marcus Wiedower (R, HD-121)
• Chuck Hufstetler (R, SD-052)

1. PassedHouse voteMarch 6, 2025

   96 yea, 77 nay (4 not voting, 3 absent)

   Passage: House Vote #210

2. PassedSenate voteApril 2, 2025

   31 yea, 24 nay (0 not voting, 1 absent)

   Motion To Engross: Sb 214, Hb 66, Hb 79, Hb 129, Hb 134, Hb 141, Hb 370, Hb 397, Hb 445, Hb 463, Hb 532, Hb 586, Hb 652: Senate Vote #383

3. PassedSenate voteApril 2, 2025

   43 yea, 11 nay (0 not voting, 2 absent)

   Passage By Substitute: Senate Vote #426

4. PassedHouse voteApril 4, 2025

   141 yea, 31 nay (1 not voting, 7 absent)

   Agree To Senate Sub As Amended By House: House Vote #423

• income tax credit
• small business health benefits
• health reimbursement arrangements
• Georgia tax law