HB 1261: Revenue and taxation; level 1 freeport exemptions for certain goods in inventory for electric utilities; provide

Georgia's freeport exemption program lets local governments, with voter approval, exempt certain business inventory from property taxes (ad valorem tax). Categories already covered include raw materials, finished goods awaiting shipment, and stock held by fulfillment centers. This bill adds a new category specifically for electric utilities. The bill amends O.C.G.A. § 48-5-48.1 to let electric utility taxpayers include, in their freeport exemption application, a summary of finished goods and parts they hold that are destined for use in building, improving, repairing, or maintaining electric generation, distribution, or transmission infrastructure in Georgia. It also amends O.C.G.A. § 48-5-48.2 to let county and municipal governments, if approved by local voters in a referendum, exempt utility equipment such as transformers, poles, cable, and switchgear held in inventory. Equipment already installed and in operating use would not qualify for the exemption.

• Adds a fifth category of freeport-exempt inventory covering electric utility finished goods and parts destined for grid construction, improvement, repair, or maintenance in Georgia.
• Lets county and municipal governments, subject to voter approval in a referendum, exempt electric utility equipment held in inventory from local property taxes.
• Lists specific equipment types that qualify, including motors, turbines, boilers, transformers, cable, poles, and switchgear held for normal business use.
• Excludes equipment already incorporated into operating electric generation, distribution, or transmission facilities from the new exemption.
• Updates the application requirements under O.C.G.A. § 48-5-48.1 so electric utilities can report this new inventory category to the Department of Revenue.

Electric utility companies operating in Georgia that maintain equipment inventories, county and municipal governments that decide whether to offer the exemption, local voters who must approve it in a referendum, and local tax digests and school districts that rely on property tax revenue.

If local governments adopt this exemption after voter approval, electric utilities could pay less in local property taxes on equipment they stockpile before installing it, potentially lowering utility costs but also reducing property tax revenue for the counties, cities, and schools that levy it.

• Section 1 amends O.C.G.A. § 48-5-48.1(b) to add a new application category letting electric utilities report inventory of goods and parts destined for grid infrastructure work.
• Section 2 amends O.C.G.A. § 48-5-48.2(c) to add electric utility equipment as a fifth type of inventory eligible for the level 1 freeport exemption, subject to local referendum approval.
• The new exemption specifically lists equipment such as motors, turbines, boilers, regulators, transformers, capacitors, circuit breakers, and switchgear held for normal business use.
• Equipment already incorporated into operating generation, distribution, or transmission facilities is excluded from the exemption.
• Section 3 repeals conflicting laws.

1. 2026-05-11Effective Date 2026-07-01
2. 2026-05-11Act 483
3. 2026-05-11House Date Signed by Governor (House)
4. 2026-04-06House Sent to Governor (House)
5. 2026-03-20Senate Passed/Adopted (Senate)
6. 2026-03-20Senate Third Read (Senate)
7. 2026-03-20Senate Engrossed (Senate)
8. 2026-03-19Senate Read Second Time (Senate)

• David Huddleston (R, HD-072)Primary sponsor
• Robert Dickey (R, HD-134)
• Bruce Williamson (R, HD-112)
• Spencer Frye (D, HD-122)
• Charles Cannon (R, HD-172)
• Brad Thomas (R, HD-021)
• Matt Brass (R, SD-006)

1. PassedHouse voteMarch 6, 2026

   100 yea, 66 nay (4 not voting, 7 absent)

   Passage: House Vote #662

2. PassedSenate voteMarch 20, 2026

   29 yea, 19 nay (1 not voting, 5 absent)

   Motion To Engross: Senate Vote #762

3. PassedSenate voteMarch 20, 2026

   45 yea, 0 nay (2 not voting, 7 absent)

   Passage: Senate Vote #778

• property taxes
• freeport exemption
• electric utilities
• local tax referendums