HB463: HB463 Ad valorem tax; certain senior citizens who volunteer with local governments; provide homestead exemption

This bill rewrites large parts of Georgia's income tax law. It lowers the personal income tax rate to 4.99 percent starting in 2026, with further annual cuts down to 3.99 percent if state revenue targets are met. It raises the standard deduction for joint and single filers, increases the dependent exemption, and raises how much retirement income Georgians 65 and older can exclude from state tax, up to $70,000 for some taxpayers by 2027. The bill also creates temporary state tax exemptions for up to $1,750 of overtime pay and up to $1,750 of cash tips per year through 2028, with new reporting requirements for employers. It repeals several corporate tax credits, such as those for medical equipment manufacturers, teleworking expenses, and alternative fuel vehicles, along with sales tax exemptions for items like data center equipment and pollution control machinery. It also changes how much money the state's Revenue Shortfall Reserve can hold and how surplus funds may be used for tax relief. The changes take effect when the Governor signs the bill and apply to tax years beginning on or after January 1, 2026.

• Cuts Georgia's personal income tax rate to 4.99 percent for 2026, with the rate scheduled to fall further to 3.99 percent in future years if revenue conditions are met.
• Raises the standard deduction to $30,000 for joint filers and $15,000 for single filers, with further scheduled increases through 2027, and raises the dependent exemption to $5,000.
• Increases the retirement income exclusion for Georgians 65 and older to as much as $70,000 starting in 2027.
• Creates temporary exemptions from state income tax for up to $1,750 in overtime pay and up to $1,750 in cash tips per year, through the end of 2028, with new employer reporting rules.
• Repeals multiple corporate income tax credits, including those for medical equipment manufacturers, teleworking expenses, port traffic increases, and alternative fuel vehicles.
• Repeals several state sales and use tax exemptions, such as those for data center equipment and certain pollution control machinery, while letting existing exemption certificates continue under the old rules.

Georgia individual income taxpayers, especially retirees, hourly workers who earn overtime or tips, and families claiming standard deductions or dependents. It also affects businesses that currently rely on the repealed tax credits and sales tax exemptions, such as manufacturers, port-related employers, and data centers, plus state budget officials who manage the Revenue Shortfall Reserve.

Most Georgia income taxpayers would see a lower tax rate and bigger deductions, meaning smaller state tax bills. Hourly workers earning overtime or tips would keep more of that pay tax-free through 2028. Businesses that used the repealed credits and exemptions would lose those tax breaks starting when the bill takes effect.

• Section 2-1 lowers the income tax rate under O.C.G.A. § 48-7-20 to 4.99 percent for 2026, with future 0.125 percent annual cuts toward 3.99 percent contingent on revenue triggers checked each December 1.
• Section 2-2 raises the dependent personal exemption to $5,000, rising by $125 a year starting in 2027 up to $6,000, subject to the same revenue-based delays.
• Section 2-3 raises standard deductions to $30,000 (joint) and $15,000 (single/head of household), with scheduled annual increases, and raises the retirement income exclusion for those 65 and older to up to $70,000 by 2027.
• Section 2-4 creates temporary income tax exemptions for up to $1,750 of overtime pay and up to $1,750 of cash tips per year for 2026 through 2028, requiring employers to report the amounts to the Department of Revenue.
• Section 3-2 changes the Revenue Shortfall Reserve under O.C.G.A. § 45-12-93, raising its cap to 20 percent of prior-year net revenue and allowing surplus above that level to be used for tax relief.
• Part IV (Sections 4-1 through 4-10) repeals several business tax credits and sales/use tax exemptions, including those for medical equipment manufacturers, teleworking expenses, alternative fuel vehicles, and data center equipment, while preserving previously issued pollution-control exemption certificates.
• Section 5-1 sets the effective date as the date the Governor signs the bill, applying to tax years beginning on or after January 1, 2026.

1. 2026-05-11Effective Date 2026-05-11
2. 2026-05-11Act 465
3. 2026-05-11House Date Signed by Governor (House)
4. 2026-04-10House Sent to Governor (House)
5. 2026-04-02Senate Agreed House Amend or Sub (Senate)
6. 2026-04-02House Agreed Senate Amend or Sub As Amended (House)
7. 2026-02-12Senate Passed/Adopted By Substitute (Senate)
8. 2026-02-12Senate Third Read (Senate)

• Shaw Blackmon (R, HD-146)Primary sponsor
• Jon Burns (R, HD-159)
• James Hatchett (R, HD-155)
• Carl Gilliard (D, HD-162)
• Ron Stephens (R, HD-164)
• Beth Camp (R, HD-135)
• Blake Tillery (R, SD-019)

1. PassedHouse voteMarch 4, 2025

   171 yea, 0 nay (2 not voting, 7 absent)

   Passage: House Vote #188

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 voteFebruary 12, 2026

   32 yea, 14 nay (2 not voting, 6 absent)

   Passage By Substitute: Senate Vote #546

4. PassedHouse voteApril 2, 2026

   104 yea, 71 nay (1 not voting, 0 absent)

   Agree To Senate Sub As Am: House Vote #849

5. PassedSenate voteApril 2, 2026

   33 yea, 20 nay (0 not voting, 1 absent)

   Agree To House Amendment To Senate Substitute: Senate Vote #971

• income tax cuts
• tax deductions
• overtime and tips tax exemption
• business tax credits
• state budget reserve