HB731: HB731 Alternative Homestead Option Sales and Use Tax Act of 2025; enact

Georgia counties already have several ways to trade a local sales tax for property tax relief on homes. This bill adds another option called the Alternative Homestead Option Sales and Use Tax Act of 2025. It would let a county's governing authority ask voters, in a joint referendum, to approve both a 1 percent sales and use tax and a companion homestead exemption created through a separate local Act passed by the General Assembly. If voters approve both together, the county could collect the tax for up to 10 years, though it could be renewed afterward. The tax proceeds would be split: part would go to capital outlay projects (limited to road improvements for the county, though cities could use their share more broadly), and part would replace the property tax revenue lost to the new homestead exemption. Any money left over would be used to lower the county's tax rate or fund constitutional county services. New cities incorporated after January 1, 2026 would get a share of the proceeds based on population so their residents keep getting a similar benefit.

• Creates a new local option sales and use tax of 1 percent that counties can ask voters to approve alongside a companion homestead exemption passed through a separate local Act.
• Ties the sales tax and the homestead exemption together so that if voters do not approve both on the same ballot, neither takes effect.
• Directs sales tax proceeds to capital outlay projects (road improvements for counties) and to replacing property tax revenue lost to the new homestead exemption, with leftover funds used to roll back county tax rates.
• Sets the tax and its matching homestead exemption to expire automatically 10 years after collection begins, unless voters approve a new one.
• Requires counties collecting this tax to post an annual online report showing how much was collected and how much homestead value was reduced, and to send that report to local legislators.
• Bars a county from levying this tax if it already collects a sales tax under Article 2 of the same chapter (an existing homestead option sales tax).

Georgia homeowners who qualify for a homestead exemption, county governments and their voters who would decide whether to adopt the tax, existing and newly incorporated municipalities that would share in the proceeds, and retailers who collect and remit the sales tax.

If a county and its voters approve this option, homeowners could see part of their property tax bill offset by revenue from a new sales tax, while the county gets dedicated money for road projects. Because the sales tax and property tax break are legally linked, voters would have to approve both together or get neither.

• Section 48-8-109.25 names the act and defines terms including 'homestead,' 'existing municipality,' and 'qualified municipality' (a city incorporated on or after January 1, 2026).
• Section 48-8-109.26 sets the tax rate at 1 percent, creates 159 special tax districts matching county boundaries, and requires a companion local Act homestead exemption before the tax can be levied.
• Subsection (d) makes the sales tax and homestead exemption last 10 years from first collection, though a new one can be adopted later under the same process.
• Subsection (e) requires a joint referendum ballot with a specific notice telling voters that both measures must pass together or neither takes effect.
• Section 48-8-109.27 sets how proceeds are split: up to 25 percent for capital outlay (mostly road projects for counties), a portion to replace homestead exemption revenue, and any remainder used to roll back the county's millage rate or fund constitutional services.
• Section 48-8-109.27 also sets rules for distributing money to existing and newly incorporated municipalities based on population and any existing sales tax distribution agreements.
• Section 48-8-109.28 addresses tax credits for property already taxed elsewhere and exempts certain construction contracts bid before the tax's approval.

1. 2025-03-10House Second Readers (House)
2. 2025-03-06House First Readers (House)
3. 2025-03-04House Hopper (House)

• Mandi Ballinger (R, HD-023)Primary sponsor
• Jordan Ridley (R, HD-022)
• Charlice Byrd (R, HD-020)
• Brad Thomas (R, HD-021)
• Mitchell Scoggins (R, HD-014)
• Jan Jones (R, HD-047)

• property taxes
• sales tax
• homestead exemption
• local government funding
• road funding