HB616: HB616 Income tax; depreciation for single-family residential rental property; revise a deduction

Georgia's tax code currently lets corporations subtract certain equipment and property costs from their taxable income using a deduction tied to Section 179 of the federal Internal Revenue Code as it existed in 2005. This bill amends two sections of Georgia's income tax law (O.C.G.A. §§ 48-7-21 and 48-7-27) so that, starting with tax years beginning on or after January 1, 2026, this deduction can no longer be used for single-family residential rental property. The bill also requires corporations to add back to their taxable income any amount they previously deducted under this provision in connection with single-family rental homes, for tax years beginning on or after that date. The changes apply to both the corporate income tax computation and the broader computation of taxable income sections of the tax code. The law would take effect January 1, 2026, and apply to all tax years starting on or after that date.

• Removes the Section 179 depreciation-style deduction for single-family residential rental property from Georgia's corporate income tax law, effective for tax years starting January 1, 2026.
• Requires corporations to add back into taxable income any amount previously deducted under this provision for single-family rental homes, for tax years beginning on or after January 1, 2026.
• Makes the same change in two separate code sections: one governing corporate taxation (O.C.G.A. § 48-7-21) and one governing computation of taxable income (O.C.G.A. § 48-7-27).
• Leaves the deduction in place for property types other than single-family residential rental property.

Corporations that own or invest in single-family residential rental homes in Georgia and currently claim this depreciation-related tax deduction. It does not appear to change the deduction for other kinds of property or for non-corporate taxpayers under these specific sections.

Corporate owners of single-family rental houses in Georgia would lose a tax deduction they currently rely on, and would have to add back previously deducted amounts starting in 2026, which would raise their state taxable income and likely their tax bills tied to that property.

• Section 1 revises O.C.G.A. § 48-7-21(b)(14) so the Section 179 deduction no longer applies to single-family residential rental property for tax years starting on or after January 1, 2026.
• Section 1 also requires corporations to add back previously taken Section 179 deductions tied to single-family rental property to their taxable income.
• Section 2 makes the identical change in O.C.G.A. § 48-7-27(a)(15), which governs the broader computation of taxable income.
• Section 3 sets the effective date as January 1, 2026, applying to all tax years beginning on or after that date.
• Section 4 repeals any conflicting laws.

1. 2025-02-27House Second Readers (House)
2. 2025-02-26House First Readers (House)
3. 2025-02-24House Hopper (House)

• Ruwa Romman (D, HD-097)Primary sponsor
• Spencer Frye (D, HD-122)
• El-Mahdi Holly (D, HD-116)
• Bryce Berry (D, HD-056)

• income tax
• corporate taxes
• rental property
• tax deductions
• housing policy