HB537: HB537 Revenue and taxation; maximum amount of local sales and use taxes that may be imposed; provide

Georgia law already caps most combined local sales and use taxes at 2 percent, with exceptions for things like education taxes, transit taxes, and transportation projects. This bill rewrites that cap in O.C.G.A. § 48-8-6 to make clear the limit applies regardless of any other law and to require that any tax exceeding the cap as of July 1, 2025, but started before January 1, 2025, may keep running under old rules but cannot be renewed once it expires. The bill also revises the special district sales tax used for property tax relief (O.C.G.A. §§ 48-8-109.31 through 48-8-109.33). It reorganizes rules about which counties and cities must have a homestead exemption in place, how 'absent municipalities' that skip the intergovernmental agreement are still allotted a share of proceeds, and adds a process for a county to adopt a resolution instead of an intergovernmental agreement when none is required. It also updates procedures for reimposing the tax after it expires and for notifying the state revenue commissioner.

• Rewrites the statewide 2 percent cap on local sales and use taxes (O.C.G.A. § 48-8-6) to state it applies no matter what other law says otherwise.
• Adds a rule that taxes already exceeding the cap as of July 1, 2025 can keep running under old law but cannot be renewed once they expire or terminate.
• Revises the special district sales tax for property tax relief so that current homestead exemption requirements and referendum conditions are reorganized and clarified (O.C.G.A. § 48-8-109.31).
• Adds a new process letting a county or consolidated government adopt a resolution, instead of an intergovernmental agreement, to impose the tax when no such agreement is required (O.C.G.A. § 48-8-109.32).
• Updates the timing rules for imposing, certifying, and reimposing the special district tax, including sending certified copies to the state revenue commissioner within five business days (O.C.G.A. § 48-8-109.33).

County and municipal governments that levy local sales taxes, especially those with taxes currently exceeding the 2 percent cap, homeowners eligible for homestead exemptions, local voters who approve these taxes by referendum, and the state revenue commissioner's office, which processes certification paperwork.

Local governments relying on sales tax revenue above the statewide cap would eventually have to phase those taxes out once they expire, rather than renewing them. The changes to the property tax relief sales tax rules could affect how easily counties and cities can adopt or reimpose that tax and how proceeds are split among municipalities.

• Section 1 revises O.C.G.A. § 48-8-6 to affirm the 2 percent local sales tax cap applies regardless of any other law and lists the same four exceptions (education, transportation, transit, and other specified taxes).
• Section 1 adds that taxes exceeding the cap as of July 1, 2025 but started before January 1, 2025 can continue under prior law but cannot be renewed once they end.
• Section 2 revises O.C.G.A. § 48-8-109.31 governing the special district property tax relief sales tax, reorganizing homestead exemption and intergovernmental agreement requirements and the treatment of 'absent municipalities.'
• Section 3 adds a new subsection (e) to O.C.G.A. § 48-8-109.32 allowing a county or consolidated government to adopt a resolution instead of an intergovernmental agreement when none is required.
• Section 4 revises O.C.G.A. § 48-8-109.33 to update billing-period effective dates, certification deadlines to the commissioner, and the process for reimposing the tax after expiration.
• Section 5 repeals conflicting laws.

1. 2025-02-21House Second Readers (House)
2. 2025-02-20House First Readers (House)
3. 2025-02-19House Hopper (House)

• Shaw Blackmon (R, HD-146)Primary sponsor

• sales tax
• local government finance
• property tax relief
• homestead exemption
• tax caps