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

26 HB 463/AP House Bill 463 (AS PASSED HOUSE AND SENATE) By: Representatives Blackmon of the 146th, Burns of the 159th, Hatchett of the 155th, Gilliard of the 162nd, Stephens of the 164th, and others A BILL TO BE ENTITLED AN ACT To amend Title 33 and Title 48 of the Official Code of Georgia Annotated, relating to1 insurance and revenue and taxation, respectively, so as to redu ce the personal income tax2 rate; to revise provisions relative to annual reductions of the income tax; to reduce the rates3 of taxation on corporate and partnership income; to increase the amounts of the standard and4 dependent deductions from state taxable income for individuals; to provide for an increase5 in the amount of retirement income that may be excluded from st ate taxable income for6 individuals 65 or older; to exclude a portion of overtime compe nsation and cash tips from7 taxation; to provide for reporting by employers; to provide for rules and regulations; to8 provide for automatic repeal; to provide for prospective annual increases in the amounts of9 such deductions; to repeal income tax credits for manufacturers of medical equipment and10 supplies, pharmaceuticals, medicine, and personal protective eq uipment, alternative fuel,11 low-emission, and zero-emission vehicles and electric vehicle c hargers, businesses12 headquartered in this state, businesses engaged in manufacturing cigarettes for exportation,13 business enterprises that purchase or lease a motor vehicle to provide transportation for14 employees, base year port traffic increases, and teleworking ex penses; to repeal the state15 sales tax and use exemptions for the rental of videotape or mot ion picture film, printed16 advertising inserts or supplements, machinery or equipment used to reduce air or water17 pollution, high-technology company computer equipment, data center equipment, sales of18 machinery, equipment, and materials used in the construction or operation of certain19 H. B. 463 - 1 - 26 HB 463/AP buildings; to allow for the continued use of a certificate of exemption issued prior to the date20 of repeal relating to the sale of machinery and equipment used for the primary purpose of21 reducing or eliminating air or water pollution; to amend Part 1 of Article 4 of Chapter 12 of22 Title 45 of the Official Code of Georgia Annotated, relating to management of budgetary and23 financial affairs, so as to change provisions relative to surplus funds of the Revenue Shortfall24 Reserve; to provide for conforming changes; to provide for related matters; to provide for an25 effective date and applicability; to provide a short title; to repeal conflicting laws; and for26 other purposes.27 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:28 PART I29 SECTION 1-1.30 This Act shall be known and may be cited as the "Georgia Economic Growth and Tax Relief31 Act of 2026."32 PART II33 SECTION 2-1.34 Title 48 of the Official Code of Georgia Annotated, relating to revenue and taxation, is35 amended in Code Section 48-7-20, relating to individual tax rates, credit for withholding and36 other payments, and applicability to estates and trusts, by rev ising subsection (a.1) as37 follows:38 "(a.1)(1) On and after January 1, 2025 2026, the tax imposed pursuant to subsection (a)39 of this Code section shall be 5.19 percent 4.99 percent for taxable years beginning on or40 after January 1, 2025 2026; provided, however, that such rate shall be reduced by 0.1041 0.125 percent annually beginning on January 1, 2026 2027, until the rate reaches 4.9942 percent, 3.99 percent; provided that such annual reductions in the tax rate shall be subject43 H. B. 463 - 2 - 26 HB 463/AP to delays as provided in paragraph (2) of this subsection delayed by one year for each44 year that prospective annual reductions in the standard deduction are delayed for any of45 the reasons provided in paragraph (1.1) of subsection (a) of Code Section 48-7-27.46 (2) Each prospective annual reduction in the tax rate that wou ld otherwise occur as47 provided in paragraph (1) of this subsection shall be delayed by one year for each year48 that any of the following are true as of December 1:49 (A) The Governor's revenue estimate for the succeeding fiscal year is not at least 350 percent above the Governor's revenue estimate for the present fiscal year;51 (B) The prior fiscal year's net revenue collection was not hig her than each of the52 preceding three fiscal years' net tax revenue collection; or53 (C) The Revenue Shortfall Reserve provided for in Code Section 45-12-93 does not54 contain a sum that exceeds the amount of the decrease in state revenue projected to55 occur as a result of the prospective reduction in the tax rates set to occur the following56 year.57 (3) The Office of Planning and Budget shall make the determina tions necessary to58 implement the provisions of paragraph (2) of this subsection an d shall report its59 determinations by December 1 of each year to the department, the Speaker of the House60 of Representatives, the President of the Senate, and the chairp ersons of the House61 Committee on Appropriations Committee, the House Committee on W ays and Means62 Committee, the Senate Appropriations Committee, and the Senate Finance Committee.63 This paragraph shall not be applicable after the final reduction to the rate of 4.99 percent64 occurs."65 SECTION 2-2.66 Said title is further amended by revising subsection (b) of Code Section 48-7-26, relating to67 personal exemptions, as follows:68 H. B. 463 - 3 - 26 HB 463/AP "(b) Each taxpayer shall be allowed as a deduction in computing his or her Georgia taxable69 income a personal exemption in the amount of $4,000.00 $5,000.00 for each dependent of70 such taxpayer; provided, however, that such deduction shall be increased by $125.0071 annually beginning on January 1, 2027, until such deduction reaches $6,000.00, provided72 that such increases in such deduction shall be subject to the same delays as those applied73 to standard deductions as provided in paragraph (1.1) of subsec tion (a) of Code Section74 48-7-27."75 SECTION 2-3.76 Said title is further amended in subsection (a) of Code Section 48-7-27, relating to77 computation of taxable net income, by revising the introductory language and paragraph (1),78 by adding a new paragraph and a new division, and by revising divisions (a)(5)(A)(xii) and79 (a)(5)(A)(xiii) as follows:80 "(a) Georgia taxable net income of an individual shall be the t axpayer's federal adjusted81 gross income, as defined in the United States Internal Revenue Code of 1986, less:82 (1) At the taxpayer's election, either:83 (A) The sum of all itemized nonbusiness deductions used in computing such taxpayer's84 federal taxable income; or85 (B) A standard deduction in an amount as follows:86 (i) In the case of a married couple filing a joint return, $24 ,000.00 $30,000.00;87 provided, however, that such deduction shall be increased by $7 50.00 annually88 beginning on January 1, 2027, until such deduction reaches $36,000.00, provided that89 such increases in such deduction shall be subject to delays as provided in paragraph90 (1.1) of this subsection; or91 (ii) In the case of a single taxpayer, head of household, or married taxpayer filing a92 separate return, $12,000.00 $15,000.00; provided, however, that such deduction shall93 be increased by $375.00 annually beginning on January 1, 2027, until such deduction94 H. B. 463 - 4 - 26 HB 463/AP reaches $18,000.00, provided that such increases in such deduction shall be subject95 to delays as provided in paragraph (1.1) of this subsection;96 (1.1)(A) Each prospective increase in the standard deduction t hat would otherwise97 occur as provided in divisions (i) and (ii) of subparagraph (B) of paragraph (1) of this98 subsection shall be delayed by one year for each year that any of the following are true99 as of December 1:100 (i) The Governor's revenue estimate for the succeeding fiscal year is not at least 3101 percent above the Governor's revenue estimate for the present fiscal year;102 (ii) The prior fiscal year's net revenue collection was not hi gher than each of the103 preceding three fiscal years' net tax revenue collection; or104 (iii) The Revenue Shortfall Reserve provided for in Code Section 45-12-93 does not105 contain a sum that exceeds the amount of the decrease in state revenue projected to106 occur as a result of the prospective reduction in the tax rates set to occur the following107 year.108 (B) The Office of Planning and Budget shall make the determina tions provided in109 subparagraph (A) of this paragraph and shall report its determinations by December 1110 of each year to the department, the Speaker of the House of Rep resentatives, the111 President of the Senate, and the chairpersons of the House Comm ittee on112 Appropriations, the House Committee on Ways and Means, the Senate Appropriations113 Committee, and the Senate Finance Committee. This paragraph shall not be applicable114 after the final increases in the standard deductions provided under divisions (i) and (ii)115 of subparagraph (B) of paragraph (1) of this subsection occur;"116 "(xii) For taxable years beginning on or after January 1, 2008, and prior to January117 1, 2012, retirement income from any source not to exceed an exc lusion amount of118 $35,000.00; and119 (xiii) For taxable years beginning on or after January 1, 2012 , and ending on or120 before December 31, 2026 , retirement income from any source not to exceed an121 H. B. 463 - 5 - 26 HB 463/AP exclusion amount of $35,000.00 for each taxpayer meeting the eligibility requirement122 set forth in division (i) or (ii) of subparagraph (D) of this paragraph or an amount of123 $65,000.00 for each taxpayer meeting the eligibility requirement set forth in division124 (iii) of subparagraph (D) of this paragraph; and125 (xiv) For taxable years beginning on or after January 1, 2027, retirement income from126 any source not to exceed an exclusion amount of $35,000.00 for each taxpayer127 meeting the eligibility requirement set forth in division (i) or (ii) of subparagraph (D)128 of this paragraph or an amount of $70,000.00 for each taxpayer meeting the eligibility129 requirement set forth in division (iii) of subparagraph (D) of this paragraph."130 SECTION 2-4.131 Said title is further amended in subsection (a) of Code Section 48-7-27, relating to132 computation of taxable net income, by striking "and" at the end of paragraph (14), by133 replacing the period at the end of paragraph (15) with a semico lon, and by adding new134 paragraphs to read as follows:135 "(16)(A) For all taxable years beginning on or after January 1, 2026, and ending on136 December 31, 2028, any amount of qualified overtime compensation, as such term is137 defined in Section 225 of the Internal Revenue Code, up to $1,7 50.00 received by a138 full-time employee paid by an hourly wage.139 (B) Notwithstanding subparagraph (A) of this paragraph, for employers governed by140 the federal National Railway Labor Act, the exemption provided in this paragraph shall141 apply to hourly component overtime compensation as defined in applicable collective142 bargaining agreements.143 (C) For each tax year beginning on or after January 1, 2026, a nd ending on144 December 31, 2028, each employer shall submit to the department, on forms prescribed145 by the department, the total amount of qualified overtime compe nsation received by146 full-time employees paid by an hourly wage and the total number of employees to147 H. B. 463 - 6 - 26 HB 463/AP which such compensation was paid. The data shall be provided monthly or quarterly148 and shall be due no later than the due date for the corresponding monthly or quarterly149 withholding tax returns, except that such data may be provided at the end of the year150 for the 2026 tax year.151 (D) The department may require additional information of emplo yers and shall be152 authorized to adopt rules and regulations to provide for the ad ministration of this153 paragraph.154 (E) This paragraph shall stand repealed and reserved on December 31, 2028; and155 (17)(A) For all taxable years beginning on or after January 1, 2026, any amount up156 to $1,750.00 received in cash tips.157 (B) For each tax year beginning on or after January 1, 2026, e ach employer shall158 submit to the department, on forms prescribed by the department , the total amount159 received by employees in cash tips and the total number of empl oyees to which such160 compensation was paid. The data shall be provided monthly or quarterly and shall be161 due no later than the due date for the corresponding monthly or quarterly withholding162 tax returns, except that such data may be provided at the end of the year for the 2026163 tax year.164 (C) The department may require additional information of emplo yers and shall be165 authorized to adopt rules and regulations to provide for the ad ministration of this166 paragraph.167 (D) As used in this paragraph, the term:168 (i) 'Cash tips' means cash received by an individual in an occupation that customarily169 and regularly receives tips, including tips received from custo mers that are paid in170 cash or charged and, in the case of an employee, tips received under any tip-sharing171 arrangement, but only if such amount is paid voluntarily without any consequence in172 the event of nonpayment, is not the subject of negotiation, and is determined by the173 payor.174 H. B. 463 - 7 - 26 HB 463/AP (ii) 'Occupation that customarily and regularly receives tips' means any occupation175 which has been designated as such and given a Treasury Tipped Occupation Code as176 set forth in the Federal Register by the secretary of the treasury of the United States.177 Occupations excluded under Section 63 of the Internal Revenue C ode shall also be178 excluded for purposes of this paragraph.179 (E) This paragraph shall stand repealed and reserved on December 31, 2028."180 PART III181 SECTION 3-1.182 The collection of funds set aside for taxpayer relief pursuant to this part shall be known and183 may be cited as the "Taxpayer Relief Fund."184 SECTION 3-2.185 Part 1 of Article 4 of Chapter 12 of Title 45 of the Official C ode of Georgia Annotated,186 relating to management of budgetary and financial affairs, is a mended by revising Code187 Section 45-12-93, relating to revenue shortfall reserve, reserv ation of surplus state funds,188 appropriation and release of funds, and limitations, as follows:189 "45-12-93.190 (a) There shall be a reserve of state funds known as the 'Revenue Shortfall Reserve.'191 (b) The amount of all surplus in state funds existing as of the end of each fiscal year shall192 be reserved and added to the Revenue Shortfall Reserve. Funds in the Revenue Shortfall193 Reserve shall carry forward from fiscal year to fiscal year, without reverting to the general194 fund at the end of a fiscal year. The Revenue Shortfall Reserv e shall be maintained,195 accumulated, appropriated, and otherwise disbursed only as provided in this Code section.196 H. B. 463 - 8 - 26 HB 463/AP (c) For each existing fiscal year, the General Assembly may appropriate from the Revenue197 Shortfall Reserve an amount up to 1 percent of the net revenue collections of the preceding198 fiscal year for funding increased K-12 needs.199 (d) The Governor may release for appropriation by the General Assembly a stated amount200 from funds in the Revenue Shortfall Reserve that are in excess of 4 8 percent of the net201 revenue of the preceding fiscal year.202 (e) As of the end of each fiscal year, an amount shall be rele ased from the Revenue203 Shortfall Reserve to the general fund to cover any deficit by which total expenditures and204 contractual obligations of state funds authorized by appropriation exceed net revenue and205 other amounts in state funds made available for appropriation.206 (f) The combined Revenue Shortfall Reserve and the Midyear Adj ustment Reserve207 existing on May 9, 2005, shall become the Revenue Shortfall Reserve provided for in this208 Code section.209 (g) Any other provision of law notwithstanding, the General As sembly is authorized to210 appropriate $7 million for State Fiscal Year 2005 from the Revenue Shortfall Reserve.211 (h) The Revenue Shortfall Reserve shall not exceed 15 20 percent of the previous fiscal212 year's net revenue for any given fiscal year. Any amount of undesignated surplus funds in213 excess of 20 percent of the previous fiscal year's net revenue may be used for tax relief214 pursuant to Acts of the General Assembly."215 PART IV216 SECTION 4-1.217 Said title is further amended by repealing and reserving Code Section 48-7-29.11, relating218 to tax credits for eligible teleworking expenses.219 H. B. 463 - 9 - 26 HB 463/AP SECTION 4-2.220 Said title is further amended by repealing Code Section 48-7-40.1A, relating to tax credits221 for personal protective equipment manufacturers.222 SECTION 4-3.223 Said title is further amended by repealing Code Section 48-7-40.1B, relating to tax credits224 for manufacturers of medical equipment and supplies, pharmaceuticals, and medicine.225 SECTION 4-4.226 Said title is further amended by repealing and reserving Code Section 48-7-40.15, relating227 to tax credits for base year port traffic increases.228 SECTION 4-5.229 Said title is further amended by repealing Code Section 48-7-40.15A, relating to tax credit230 for employer with base year port traffic increases.231 SECTION 4-6.232 Said title is further amended by repealing and reserving Code Section 48-7-40.16, relating233 to tax credits for alternative fuel, low-emission, and zero-emi ssion vehicles and electric234 vehicle chargers.235 SECTION 4-7.236 Said title is further amended by repealing and reserving Code Section 48-7-40.18, relating237 to tax credits for businesses headquartered in state and full-time jobs.238 H. B. 463 - 10 - 26 HB 463/AP SECTION 4-8.239 Said title is further amended by repealing and reserving Code Section 48-7-40.20, relating240 to tax credits for businesses engaged in manufacturing cigarettes for exportation.241 SECTION 4-9.242 Said title is further amended by repealing and reserving Code Section 48-7-40.22, relating243 to tax credits for business enterprises that purchase or lease a motor vehicle to provide244 transportation for employees.245 SECTION 4-10.246 Said title is further amended by repealing and reserving paragr aphs (24), (61), and (69),247 repealing paragraph (33.1), and repealing and reenacting paragr aph (36) of Code Section248 48-8-3, relating to exemptions relative to state sales and use taxes, to read as follows:249 "(36) After the effective date of this Act, no new certificates of exemption from sales and250 use tax for the sale of machinery and equipment or repair, repl acement, or component251 parts for such machinery and equipment which is used for the pr imary purpose of252 reducing or eliminating air or water pollution shall be issued pursuant to the former253 provisions of this paragraph as such provisions existed prior to the effective date of this254 Act; provided, however, that any certificate of exemption issue d prior to the effective255 date of this Act shall continue to be governed by the provisions of this paragraph as such256 provisions existed immediately prior to the effective date of this Act;"257 PART V258 SECTION 5-1.259 This Act shall become effective upon its approval by the Governor or upon its becoming law260 without such approval and shall be applicable to all taxable ye ars beginning on or after261 January 1, 2026. 262 H. B. 463 - 11 - 26 HB 463/AP SECTION 5-2.263 All laws and parts of laws in conflict with this Act are repealed.264 H. B. 463 - 12 -