HB 1176: Sales and use tax; sale of any tangible personal property used or consumed in connection with the generation, transmission, distribution, sale, or furnishing of electricity; exempt

Currently, public utilities in Georgia generally pay sales and use taxes when they buy tangible personal property (physical goods, as opposed to services) used in producing and delivering electricity. This bill changes that by adding a new exemption to Georgia's sales and use tax law (O.C.G.A. § 48-8-3). Starting January 1, 2027, sales to any public utility of tangible personal property used or consumed in connection with generating, transmitting, distributing, selling, or furnishing electricity within Georgia would be exempt from both state and local sales and use taxes. The bill defines "local sales and use tax" broadly to include taxes authorized under various state laws and constitutional provisions, including the tax that funds the Metropolitan Atlanta Rapid Transit Authority (MARTA). The bill repeals any conflicting laws but makes no other changes.

• Adds a new exemption to Georgia's sales and use tax law (O.C.G.A. § 48-8-3) for tangible personal property bought by public utilities for electricity generation, transmission, distribution, sale, or furnishing.
• Sets the exemption's start date as January 1, 2027, meaning it would not apply to purchases made before that date.
• Defines "local sales and use tax" broadly to include county, MARTA, and other local sales taxes authorized under multiple sections of Georgia law.
• Extends the new state sales tax exemption to also cover those local sales and use taxes, not just the state-level tax.
• Repeals any existing laws that conflict with the new exemption.

Public utilities that generate, transmit, distribute, sell, or furnish electricity in Georgia, such as electric power companies, would benefit directly from the tax exemption. County and local governments that rely on local sales tax revenue, including MARTA, could see changes in tax collections tied to utility purchases.

If enacted, electric utilities would no longer pay state or local sales tax on equipment and materials used to produce and deliver electricity, potentially lowering their operating costs. Local governments and MARTA could see reduced sales tax revenue from utility purchases that are currently taxable.

• Section 1 amends O.C.G.A. § 48-8-3 by adding paragraph (106), creating the new sales and use tax exemption for public utilities' electricity-related purchases.
• The exemption applies to tangible personal property used or consumed in connection with or to facilitate generating, transmitting, distributing, selling, or furnishing electricity within Georgia.
• The exemption takes effect January 1, 2027, rather than immediately upon passage.
• The bill defines 'local sales and use tax' to include taxes authorized by constitutional amendment, the 1965 MARTA Act, and Articles 2, 2A, 3, 4, or 5 of the sales tax chapter.
• The exemption explicitly extends to these local sales and use taxes, not just the statewide sales tax.
• Section 2 repeals any conflicting laws, a standard technical provision.

1. 2026-02-05House Second Readers (House)
2. 2026-02-04House First Readers (House)
3. 2026-02-03House Hopper (House)

• Charles Cannon (R, HD-172)Primary sponsor
• David Huddleston (R, HD-072)
• Trey Rhodes (R, HD-124)
• Robert Dickey (R, HD-134)
• Ron Stephens (R, HD-164)

• sales tax exemptions
• electric utilities
• public utility regulation
• local tax revenue
• energy policy