HB 1132: Sales and use tax; exempt materials used in construction, renovation, and rehabilitation of affordable housing by purely public charities

Currently, paragraph (103) of Georgia's sales and use tax law (O.C.G.A. § 48-8-3) is reserved and does not provide this exemption. This bill fills it in, exempting from state sales and use tax the materials a purely public charity buys and permanently installs while constructing, renovating, or rehabilitating affordable housing. To qualify, the charity must be a federally recognized 501(c)(3) nonprofit, the property must be used only to build homes financed through interest free loans to first time buyers, and those buyers must earn no more than 80 percent of the area median income as set annually by the U.S. Department of Housing and Urban Development. Homes sold under this program must be the buyer's primary residence and carry a 30 year resale covenant limiting future buyers to the same income cap. The exemption is set to automatically repeal on December 31, 2031, and the law would take effect January 1, 2027.

• Creates a new state sales and use tax exemption for materials bought by a purely public charity for building, renovating, or rehabilitating affordable housing, but only for items that stay permanently on the property.
• Limits the exemption to 501(c)(3) charities financing single-family homes sold to first time buyers through interest free loans.
• Requires buyers to have income at or below 80 percent of the area median income, based on HUD's county-level limits, at the time of purchase.
• Requires homes to be the buyer's primary residence and imposes a 30 year resale covenant capping future buyers' income at the same 80 percent threshold.
• Automatically repeals the exemption on December 31, 2031 unless the General Assembly acts again.
• Sets the law's effective date as January 1, 2027.

Purely public charities that build or renovate affordable housing, low income first time homebuyers who purchase homes through these charities, construction material suppliers, and the Georgia Department of Revenue, which administers the sales tax exemption.

Charities building affordable housing would pay less for construction materials, potentially lowering the cost of building or renovating homes for low income first time buyers. Buyers would still face income limits and a 30 year resale restriction, and the tax break itself would expire at the end of 2031.

• Section 1 rewrites paragraph (103) of O.C.G.A. § 48-8-3 to exempt materials a purely public charity permanently installs while building, renovating, or rehabilitating affordable housing from state sales and use tax.
• The exemption requires the charity to hold 501(c)(3) status under the federal Internal Revenue Code.
• The exemption applies only to homes financed with interest free loans to individuals buying their first home.
• Buyers must have income at or below 80 percent of the county median income as set annually by HUD, both at purchase and under a 30 year resale covenant.
• Section 1(B) automatically repeals the exemption on December 31, 2031.
• Section 2 sets the effective date as January 1, 2027.

1. 2026-03-31Senate Tabled (Senate)
2. 2026-03-31Senate Engrossed (Senate)
3. 2026-03-27Senate Read Second Time (Senate)
4. 2026-03-27Senate Committee Favorably Reported (Senate)
5. 2026-03-09Senate Read and Referred (Senate)
6. 2026-03-06House Passed/Adopted By Substitute (House)
7. 2026-03-06House Third Readers (House)
8. 2026-03-06House Committee Favorably Reported By Substitute (House)

• Lehman Franklin (R, HD-160)Primary sponsor
• Ron Stephens (R, HD-164)
• Stacey Evans (D, HD-057)
• Todd Jones (R, HD-025)
• Clint Crowe (R, HD-118)
• Spencer Frye (D, HD-122)
• Jason T. Dickerson (R, SD-021)

1. PassedHouse voteMarch 6, 2026

   163 yea, 3 nay (2 not voting, 9 absent)

   Passage: House Vote #682

2. PassedSenate voteMarch 31, 2026

   33 yea, 15 nay (2 not voting, 4 absent)

   Motion To Engross: Hb 52, Hb 248, Hb 963, Hb 964, Hb 1001, Hb 1077, Hb 1116, Hb 1129, Hb 1132, Hb 1209: Senate Vote #876

3. PassedSenate voteMarch 31, 2026

   39 yea, 10 nay (2 not voting, 3 absent)

   Motion To Table Remaining Legislation On The Rules Calendar: Senate Vote #912

• affordable housing
• sales tax exemption
• nonprofit charities
• first-time homebuyers
• property tax and housing finance