HB 1085: Income tax; various tax credits for forestry manufacturing facilities; provide

Georgia already offers job tax credits and investment tax credits to manufacturers that locate or expand in the state, with the credit amount depending on how economically distressed the county is (tiers 1 through 4). This bill, called the "Keep Georgia Forested Act," adds a new category called "forestry manufacturing" to several of those existing credit programs (O.C.G.A. §§ 48-7-40, 48-7-40.1, 48-7-40.2, 48-7-40.3, and 48-7-40.4). Forestry manufacturers are defined as businesses classified under certain wood, paper, and related NAICS codes, or any business that uses wood fiber, forest biomass, or wood residuals as a main raw material. For taxable years 2026 through 2030, these forestry manufacturers get larger investment tax credits than other manufacturers get in the same county tier, plus access to the standard $500 per new job credit. The bill lets forestry manufacturers sell or transfer unused credits to other Georgia taxpayers under specific notification rules, caps the total credits allowed statewide at $250 million a year (with a $100 million sub-cap for tier 3 and 4 counties), and requires a two-thirds vote of both legislative chambers to renew or extend the program later. The law would take effect July 1, 2026, applying to tax years starting on or after January 1, 2026.

• Adds a new legal category, 'forestry manufacturing,' to five existing Georgia tax credit statutes covering job creation and business investment.
• Defines forestry manufacturing by specific NAICS industry codes (wood products, paper, biomass energy, wood chemicals, wood furniture) or by use of wood fiber and forest byproducts as a main raw material.
• Gives forestry manufacturers higher investment tax credit rates than other manufacturers in the same county tier: for example 15% instead of 5% or 8% in tier 1 counties, and 10% instead of 3% or 5% in tier 2 counties, for 2026 through 2030.
• Allows forestry manufacturers to sell or transfer unused tax credits to other Georgia taxpayers, subject to a single transfer per year and a 30-day written notice to the Department of Revenue.
• Caps the total forestry manufacturing credits statewide at $250 million per year, with a separate $100 million yearly cap for credits in tier 3 and tier 4 counties.
• Requires a two-thirds vote of both the House and Senate to renew or extend these forestry manufacturing credits after they expire.

Wood product, paper, biomass energy, wood chemical, and wood furniture manufacturers operating or headquartered in Georgia; businesses that use wood fiber or forest byproducts as raw material; the Georgia Department of Revenue, which administers and reports on the credits; and other Georgia taxpayers who might buy transferred credits.

Companies that make wood, paper, or biomass-based products in Georgia would qualify for noticeably larger state tax credits than other manufacturers get for the same investment or new jobs, and could sell unused credits for cash. This could affect state tax revenue by up to $250 million a year while the program runs from 2026 through 2030.

• Section 1 names the bill the 'Keep Georgia Forested Act.'
• Section 2 amends O.C.G.A. § 48-7-40 to add forestry manufacturing as an eligible business type and lets forestry manufacturers claim the $500 per new job credit through 2030, plus lets them sell unused credits with a required 30-day notice to the Department of Revenue.
• Sections 3 through 6 make similar changes to O.C.G.A. §§ 48-7-40.1 through 48-7-40.4, raising the investment tax credit rate for forestry manufacturers above the standard rate in every county tier (for example 15% versus 5%-8% in tier 1 counties).
• Section 7 creates new Code Section 48-7-40.4A, capping total forestry manufacturing credits at $250 million per year statewide and $100 million per year in tier 3 and 4 counties, and requiring a two-thirds legislative vote to renew the program.
• Section 8 sets the effective date as July 1, 2026, applying to tax years beginning on or after January 1, 2026.
• The credit transfer and sale provisions are set to automatically repeal on December 31, 2030, though credits earned before then can still be transferred afterward.

1. 2026-03-27House Agreed Senate Amend or Sub As Amended (House)
2. 2026-03-23Senate Passed/Adopted By Substitute (Senate)
3. 2026-03-23Senate Third Read (Senate)
4. 2026-03-23Senate Engrossed (Senate)
5. 2026-03-20Senate Read Second Time (Senate)
6. 2026-03-19Senate Committee Favorably Reported By Substitute (Senate)
7. 2026-02-26Senate Read and Referred (Senate)
8. 2026-02-25House Passed/Adopted By Substitute (House)

• Jesse Petrea (R, HD-166)Primary sponsor
• Jon Burns (R, HD-159)
• Charles Cannon (R, HD-172)
• James Burchett (R, HD-176)
• Debbie Buckner (D, HD-137)
• Noel Williams (R, HD-148)
• Larry Walker (R, SD-020)

1. PassedHouse voteFebruary 25, 2026

   161 yea, 5 nay (3 not voting, 8 absent)

   Passage: House Vote #565

2. PassedSenate voteMarch 23, 2026

   50 yea, 0 nay (3 not voting, 1 absent)

   Passage By Substitute: Senate Vote #787

3. PassedHouse voteMarch 27, 2026

   155 yea, 4 nay (4 not voting, 13 absent)

   Agree To Senate Sub As Am: House Vote #779

• forestry industry
• tax credits
• manufacturing incentives
• income tax
• economic development