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

25 LC 47 3532 House Bill 731 By: Representatives Ballinger of the 23rd, Ridley of the 22nd, Byrd of the 20th, Thomas of the 21st, Scoggins of the 14th, and others A BILL TO BE ENTITLED AN ACT To amend Article 2A of Chapter 8 of Title 48 of the Official Co de of Georgia Annotated,1 relating to homestead option sales and use tax, so as to provide for an alternative homestead2 option sales tax; to provide for a distribution of the proceeds from the levy of an alternative3 homestead option sales and use tax; to provide for the levy of a special purpose local option4 sales and use tax in certain counties; to provide for a referendum; to provide for procedures,5 conditions, and limitations; to provide for a short title; to provide for definitions; to provide6 for related matters; to provide for related matters; to repeal conflicting laws; and for other7 purposes.8 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:9 SECTION 1.10 Article 2A of Chapter 8 of Title 48 of the Official Code of Geo rgia Annotated, relating to11 homestead option sales and use tax, is amended by adding a new part to read as follows:12 H. B. 731 - 1 - 25 LC 47 3532 "Part 413 48-8-109.25.14 (a) This part shall be known and may be cited as the 'Alternative Homestead Option Sales15 and Use Tax Act of 2025.'16 (b) As used in this part, the term:17 (1) 'Existing municipality' means a municipality created prior to January 1, 2026, lying18 wholly within or partially within a county.19 (2) 'Homestead' means homestead as defined and qualified in Code Section 48-5-40, with20 the additional qualification that it shall include only the primary residence and not more21 than five contiguous acres of land immediately surrounding such residence.22 (3) 'Qualified municipality' means a municipality created on o r after January 1, 2026,23 lying wholly within or partially within a county.24 (c) It is the intent of the General Assembly that the proceeds of the alternative homestead25 option sales and use tax be distributed equitably to the counties and qualified municipalities26 such that the residents of a new incorporated municipality will continue to receive a benefit27 from that tax substantially equal to the benefit they would have received if the area covered28 by the municipality had not incorporated. The provisions of th is part shall be liberally29 construed to effectuate such intent.30 48-8-109.26.31 (a) Pursuant to the authority granted by Article IX, Section I I, Paragraph VI of the32 Constitution of this state, there are created within this state 159 special districts. The33 geographical boundary of each count y shall correspond with and shall be conterminous34 with the geographical boundary of one of the 159 special districts.35 (b)(1) When the imposition of a local sales and use tax is aut horized according to the36 procedures provided in this part within a special district, the county whose geographical37 H. B. 731 - 2 - 25 LC 47 3532 boundary is conterminous with that of the special district shall levy a local sales and use38 tax at the rate of 1 percent, except as provided in paragraph (2) of this subsection. Except39 as to rate, the local sales and use tax shall correspond to the tax imposed and administered40 by Article 1 of this chapter. No item or transaction which is not subject to taxation by41 Article 1 of this chapter shall be subject to the sales and use tax levied pursuant to this42 part, except that the sales and use tax provided in this part shall be applicable to sales of43 motor fuels as prepaid local tax as such term is defined in Code Section 48-8-2 and shall44 be applicable to the sale of food and food ingredients and alcoholic beverages only to the45 extent provided for in paragraph (57) of Code Section 48-8-3.46 (2) Such sales and use tax levied on sales of motor fuels as d efined in Code47 Section 48-9-2 shall be at the rate of 1 percent of the retail sales price of the motor fuel48 which is not more than $3.00 per gallon.49 (c) The proceeds of the sales and use tax levied and collected under this part shall be used50 only for the purposes of funding capital outlay projects and of funding services within a51 special district equal to the revenue lost to the homestead exemption as provided in Code52 Section 48-8-109.27 and, in the event excess funds remain following the expenditure for53 such purposes, such excess funds shall be expended as provided in subparagraph (c)(2)(C)54 of Code Section 48-8-109.27.55 (d)(1) Such sales and use tax shall only be levied in a specia l district following the56 enactment of a local Act which provides for a homestead exemption of an amount to be57 determined from the amount of sales and use tax collected under this part. Such58 exemption shall commence with taxable years beginning on or after January 1 of the year59 immediately following the first complete calendar year in which the sales and use tax60 under this part is levied. Any such local Act shall incorporate by reference the terms and61 conditions specified under this part. Any such local Act shall not be subject to the62 provisions of Code Section 1-3-4.1. Any such homestead exemption under this part shall63 be in addition to and not in lieu of any other homestead exemption applicable to county64 H. B. 731 - 3 - 25 LC 47 3532 taxes for county purposes within the special district. Notwithstanding any provision of65 such local Act to the contrary, the referendum which shall othe rwise be required to be66 conducted under such local Act shall only be conducted if the resolution required under67 this part is adopted prior to the issuance of the call for the referendum under the local Act68 by the election superintendent. If such ordinance is not adopt ed by that date, the69 referendum otherwise required to be conducted under the local A ct shall not be70 conducted.71 (2) Such sales and use tax and the associated homestead exemption shall terminate ten72 years after the date such sales and use tax is first collected; provided, however, that73 nothing in this subsection shall prevent subsequent sales and u se taxes or homestead74 exemptions from being adopted pursuant to this part in the same manner as provided in75 this part for the initial adoption of such sales and use tax and homestead exemption.76 (3) No sales and use tax shall be levied in a special district under this part in which a tax77 is levied and collected under Article 2 of this chapter.78 (e) Whenever the governing authority of any county whose geogr aphical boundary is79 conterminous with that of the special district wishes to submit to the electors of the special80 district the question of whether the sales and use tax authoriz ed by this part shall be81 imposed, any such governing authority shall notify the election superintendent of the82 county whose geographical boundary is conterminous with that of the special district by83 forwarding to the superintendent a copy of a resolution of the governing authority calling84 for a referendum election. Upon receipt of the resolution, it shall be the duty of the election85 superintendent to issue the call for an election for the purpose of submitting the question86 of the imposition of the sales and use tax to the voters of the special district for approval87 or rejection. The election superintendent shall issue the call and shall conduct the election88 on a date and in the manner authorized under Code Section 21-2-540. Such election shall89 only be conducted on the date of and in conjunction with a refe rendum provided for by90 local Act on the question of whether to impose a homestead exemption within such county91 H. B. 731 - 4 - 25 LC 47 3532 and based on the amount of proceeds from the sales and use tax levied and collected92 pursuant to this part. The election superintendent shall cause the date and purpose of the93 election to be published once a week for two weeks immediately preceding the date of the94 election in the official organ of such county. The ballot shal l have written or printed95 thereon the following statement which shall precede the ballot question specified in this96 subsection and the ballot question specified by the required local Act:97 'NOTICE TO ELECTORS: Unless BOTH the alternative homestead exemption AND98 the retail homestead option sales and use tax are approved, then neither the exemption nor99 the sales and use tax shall become effective.'100 Such statement shall be followed by the following:101 '( ) YES102 103 ( ) NO104 105 106 107 Shall a retail homestead option sales and use tax of 1 percent be levied within the special district within _____________ County for the purposes of funding capital outlay projects and of funding serv ices to replace revenue lost to an additional homestead exemption of up to 100 percent of the assessed value of homesteads from county taxes f or county purposes?' Notwithstanding any other provision of law to the contrary, the statement, ballot question,108 and local Act ballot question referred to in this subsection shall precede any and all other109 ballot questions calling for the levy or imposition of any other sales and use tax which are110 to appear on the same ballot.111 (f) All persons desiring to vote in favor of levying the sales and use tax shall vote 'Yes,'112 and those persons opposed to levying the tax shall vote 'No.' If more than one-half of the113 votes cast are in favor of levying the tax and approving the lo cal Act providing such114 homestead exemption, then the tax shall be levied in accordance with this part; otherwise,115 the sales and use tax may not be levied, and the question of the imposition of the sales and116 use tax may not again be submitted to the voters of the special district until after 24 months117 immediately following the month in which the election was held. It shall be the duty of the118 H. B. 731 - 5 - 25 LC 47 3532 election superintendent to hold and conduct such elections unde r the same rules and119 regulations as govern special elections. It shall be the super intendent's further duty to120 canvass the returns, declare the result of the election, and certify the result to the Secretary121 of State and to the commissioner. The expense of the election shall be borne by the county122 whose geographical boundary is conterminous with that of the special district holding the123 election.124 (g) If the imposition of the sales and use tax provided in thi s part is approved in a125 referendum election as provided by subsections (e) and (f) of t his Code section, the126 governing authority of the county whose geographical boundary is conterminous with that127 of the special district shall adopt a resolution within 30 days after the certification of the128 result of the election imposing the sales and use tax authorized by this part on behalf of the129 county whose geographical boundary is conterminous with that of the special district. The130 resolution shall be effective on the first day of the next succeeding calendar quarter which131 begins more than 50 days after the adoption of the resolution. With respect to services132 which are billed on a regular monthly basis, however, the resolution shall become effective133 with the first regular billing period coinciding with or follow ing the otherwise effective134 date of the resolution. A certified copy of the resolution sha ll be forwarded to the135 commissioner so that it will be received within five days after its adoption.136 (h) Within 30 days of the conclusion of a year in which the sale and use tax provided in137 this part is collected, the county shall post a report in a pro minent place on its website138 detailing how much money was collected in the past year by such sale and use tax, the139 value of homesteads reduced by such sales and use tax collectio ns, and any other140 information that may be required by the commissioner in rules a dopted pursuant to141 subsection (d) of Code Section 48-8-109.28. The county shall also deliver a copy of this142 report to each member of the General Assembly whose district in cludes any part of the143 county.144 H. B. 731 - 6 - 25 LC 47 3532 48-8-109.27.145 (a) The sales and use tax levied pursuant to this part shall be exclusively administered and146 collected by the commissioner for the use and benefit of each county whose geographical147 boundary is conterminous with that of a special district. Such administration and collection148 shall be accomplished in the same manner and subject to the same applicable provisions,149 procedures, and penalties provided in Article 1 of this chapter except that the sales and use150 tax provided in this part shall be applicable to sales of motor fuels as prepaid local tax as151 such term is defined in Code Section 48-8-2; provided, however, that all moneys collected152 from each taxpayer by the commissioner shall be applied first to such taxpayer's liability153 for taxes owed the state. Dealers shall be allowed a percentage of the amount of the sales154 and use tax due and accounted for and shall be reimbursed in th e form of a deduction in155 submitting, reporting, and paying the amount due if such amount is not delinquent at the156 time of payment. The deduction shall be at the rate and subjec t to the requirements157 specified under subsections (b) through (f) of Code Section 48-8-50.158 (b) Each sales and use tax return remitting sales and use taxe s collected under this part159 shall separately identify the location of each retail establishment at which any of the sales160 and use taxes remitted were collected and shall specify the amount of sales and the amount161 of taxes collected at each establishment for the period covered by the return in order to162 facilitate the determination by the commissioner that all sales and use taxes imposed by this163 part are collected and distributed according to situs of sale.164 (c) The proceeds of the sales and use tax collected by the com missioner in each special165 district under this part shall be disbursed as soon as practicable after collection as follows:166 (1) One percent of the amount collected shall be paid into the general fund of the state167 treasury in order to defray the costs of administration; and168 (2) Except for the percentage provided in paragraph (1) of this subsection, the remaining169 proceeds of the sales and use tax shall be distributed to the g overning authority of the170 county whose geographical boundary is conterminous with that of the special district. As171 H. B. 731 - 7 - 25 LC 47 3532 a condition precedent for the authority to levy the sales and u se tax or to collect any172 proceeds from the tax authorized by this part for the year foll owing the first complete173 calendar year in which it is levied and for all subsequent years except the year following174 the year in which the year in which the sales and use tax is terminated, the county whose175 geographical boundary is conterminous with that of the special district shall, except as176 otherwise provided in subsection (c) of Code Section 48-8-109.26, expend such proceeds177 as follows:178 (A) A portion of such proceeds shall be expended for the purpo se of funding capital179 outlay projects as follows:180 (i) Prior to the beginning of each calendar year, the governing authority of the county181 whose geographical boundary is conterminous with that of the sp ecial district shall182 establish the capital factor which shall not exceed .250;183 (ii) Capital outlay projects shall be funded in an amount equal to the product of the184 capital factor multiplied by the net amount of the sales and use tax proceeds collected185 under this part during the previous calendar year, and this amount shall be referred to186 as capital outlay proceeds;187 (iii) The total portion, if any, to be paid to existing munici palities from the capital188 outlay proceeds shall be determined as follows:189 (I) If the sales and use tax provided for in Part 1 of Article 3 of this chapter is190 currently levied and collected within such county, such portions shall be determined191 for each existing municipality by applying the percentage used for that192 municipality's portion of the proceeds of such sales and use ta x received by such193 county from the commissioner in each month to the capital outla y portion of the194 proceeds of the sales and use tax provided for by this article received from the195 commissioner in the same month;196 (II) If a new municipality is incorporated within the county, such newly197 incorporated municipality shall receive a portion of each month 's capital outlay198 H. B. 731 - 8 - 25 LC 47 3532 proceeds that is equal to the population of such municipality within such county as199 a percentage of the total population of the county, as such pop ulations are200 determined based upon the most recently published decennial United States Census,201 and the portion of such capital outlay proceeds received by the county and the202 existing municipalities shall be reduced in proportion to their populations within203 such county; or204 (III) If the sales and use tax provided for in Part 1 of Article 3 of this chapter is not205 levied or collected within such county, the capital outlay portion of the sales and use206 tax provided for in this article shall be distributed to the mu nicipalities located207 wholly or partially within the county based upon the population s of such208 municipalities that are located within the county as a percenta ge of the total209 population of such county, as such populations are determined based upon the most210 recently published decennial United States Census; and211 (iv) Capital outlay projects funded by this part undertaken by the county shall be212 limited to road improvement projects; provided, however, that nothing in this division213 shall limit the scope of capital outlay projects undertaken by a qualified municipality;214 and215 (B) A portion of such proceeds shall be expended for the purpose of funding services216 within the special district equal to the revenue lost to the ho mestead exemption as217 provided in this Code section as follows:218 (i) Within 30 days of the end of the calendar year, the govern ing authority of such219 county shall calculate the homestead factor for that period by multiplying the quantity220 1.000 minus the capital factor for that period, and then dividi ng by the taxes to be221 levied in the current tax year for county maintenance and opera tions on only that222 portion of the county's tax digest levied for maintenance and o perations that223 represents net assessments on qualified homestead property after all other homestead224 exemptions have been applied, rounding the result to three decimal places;225 H. B. 731 - 9 - 25 LC 47 3532 (ii) If the homestead factor is less than or equal to 1.000, the amount of homestead226 exemption created for the current tax year under this part on q ualified homestead227 property shall be equal to the product of the homestead factor multiplied times the net228 assessment of each qualified homestead remaining after all othe r homestead229 exemptions have been applied; and230 (iii) If the homestead factor is greater than 1.000, the homestead exemption created231 for the current tax year by this part on qualified homestead property shall be equal to232 the net assessment of each homestead remaining after all other homestead exemptions233 have been applied; and234 (C) If any of such proceeds re main following the distribution provided for in235 subparagraphs (A) and (B) of this paragraph:236 (i) The millage rate levied for county maintenance and operation purposes shall be237 rolled back in an amount equal to such excess divided by the ne t taxable digest for238 county purposes after deducting all homestead exemptions including the exemption239 under this part; and240 (ii) In the event the rollback created by division (i) of this subparagraph exceeds the241 millage rate for county maintenance and operation purposes, the governing authority242 of the county whose boundary is conterminous with the special d istrict shall be243 authorized to expend the surplus funds for funding all or any portion of those services244 which are to be provided by such governing authorities pursuant to and in accordance245 with Article IX, Section II, Paragraph III of the Constitution of this state.246 (d) For illustration purposes, a hypothetical example of the calculation is provided below.247 First, calculate the homestead factor in accordance with248 division (c)(2)(B)(i) of this Code section as follows:249 (A) Capital factor certified by county as required by250 subsection (c) of this Code section251 0.150 H. B. 731 - 10 - 25 LC 47 3532 (B) Net amount of sales and use tax collected in the252 special district pursuant to this part for the previous253 calendar year254 $ 50 million (C) Taxes levied for county purposes on only that portion255 of the county tax digest that represents net assessments on256 qualified homestead property after all other homestead257 exemptions have been applied258 $100 million (D) Calculation of homestead factor using figures above259 = [(1-.0150)($50 million/$100 million)]260 .425 48-8-109.28.261 (a) Where a local sales or use tax has been paid with respect to tangible personal property262 by the purchaser either in another local tax jurisdiction withi n t h i s s t a t e o r i n a t a x263 jurisdiction outside this state, the sales and use tax may be credited against the sales and264 use tax authorized to be imposed by this part upon the same pro perty. If the amount of265 sales or use tax so paid is less than the amount of the use tax due under this part, the266 purchaser shall pay an amount equal to the difference between the amount paid in the other267 tax jurisdiction and the amount due under this part. The commissioner may require such268 proof of payment in another local tax jurisdiction as the commissioner deems necessary and269 proper. No credit shall be granted, however, against the sales and use tax imposed under270 this part for tax paid in another jurisdiction if the sales and use tax paid in such other271 jurisdiction is used to obtain a credit against any other local sales and use tax levied in the272 special district or in the county which is conterminous with the special district; and sales273 and use taxes so paid in another jurisdiction shall be credited first against the sales and use274 tax levied under this part and then against the sales and use t ax levied under Article 3 of275 this chapter, if applicable.276 H. B. 731 - 11 - 25 LC 47 3532 (b) No sales and use tax provided for in Code Section 48-8-109.26 shall be imposed upon277 the sale of tangible personal property which is ordered by and delivered to the purchaser278 at a point outside the geographical area of the special district in which the sales and use tax279 is imposed under this part regardless of the point at which tit le passes, if the delivery is280 made by the seller's vehicle, United States mail, or common carrier or by private or contract281 carrier licensed by the Federal Motor Carrier Safety Administra tion or the Georgia282 Department of Public Safety.283 (c)(1) As used in this subsection, the term 'building and cons truction materials' means284 all building and construction materials, supplies, fixtures, or equipment, any combination285 of such items, and any other leased or purchased articles when the materials, supplies,286 fixtures, equipment, or articles are to be utilized or consumed during construction or are287 to be incorporated into construction work pursuant to a bona fi de written construction288 contract.289 (2) No sales and use tax provided for in Code Section 48-8-109.26 shall be imposed in290 a special district upon the sale or use of building and constru ction materials when the291 contract pursuant to which the materials are purchased or used was advertised for bid292 prior to approval of the levy of the sales and use tax by the county whose geographical293 boundary is conterminous with that of the special district and the contract was entered294 into as a result of a bid actually submitted in response to the advertisement prior to295 approval of the levy of the sales and use tax.296 (d) The commissioner shall have the power and authority to pro mulgate such rules and297 regulations as shall be necessary for the effective and efficie nt administration and298 enforcement of the collection of the sales and use tax authoriz ed to be imposed by this299 part."300 SECTION 2.301 All laws and parts of laws in conflict with this Act are repealed.302 H. B. 731 - 12 -