HB 134: Sales and use tax; manufactured homes; revise and expand exemption

Georgia already gives income tax credits to manufacturers that create jobs or invest in facilities, with the credit amount depending on how economically distressed the county is (tiers 1 through 4). This bill adds a new category, "forestry manufacturing," defined as businesses that use wood fiber, forest biomass, wood residuals, or forestry by-products from Georgia-grown timber as a main ingredient to make forest products, renewable fuels, bio-based chemicals, or other value-added goods. Forestry manufacturers would qualify for the same job-creation credits as other manufacturers, plus new, larger investment tax credits (up to 15 percent in tier 1 counties) for taxable years 2026 through 2030. Businesses could also sell or transfer unused credits to other Georgia taxpayers under specific reporting rules. Total credits for forestry manufacturers statewide are capped at $250 million, with a $100 million sub-cap for tier 3 and 4 counties, and any future changes need a two-thirds vote in both chambers. The law would take effect July 1, 2026, applying to tax years starting on or after January 1, 2026.

• Adds "forestry manufacturing" as a qualifying business category across five existing Georgia income tax credit programs (O.C.G.A. §§ 48-7-40, 48-7-40.1, 48-7-40.2, 48-7-40.3, 48-7-40.4).
• Defines a forestry manufacturer as a business certified by the state revenue commissioner and the State Forestry Commission that uses Georgia-grown wood fiber or forest by-products as its main raw material.
• Creates new investment tax credits for forestry manufacturing facilities ranging from 3 percent to 15 percent of qualified investment cost depending on county tier, for tax years 2026 through 2030.
• Allows forestry manufacturers to sell or transfer unused tax credits to other Georgia taxpayers once per year, with mandatory written notice to the Department of Revenue.
• Caps total forestry manufacturing tax credits statewide at $250 million, with a separate $100 million limit for tier 3 and tier 4 counties.
• Requires a two-thirds vote of both the House and Senate to renew or extend these credits after they expire.

Businesses that manufacture forest products, renewable fuels, or bio-based chemicals from Georgia timber and wood residue would gain new tax benefits. The Georgia Department of Revenue and the State Forestry Commission would jointly certify eligible companies, and other Georgia taxpayers could buy transferred credits from these manufacturers.

Forestry manufacturers in Georgia could reduce their state income tax bills significantly through new job and investment credits, potentially encouraging new wood-based manufacturing facilities, especially in lower-income tier 3 and 4 counties, while capping the total cost to the state at $250 million through 2030.

• Section 2 adds forestry manufacturing to the definition of "business enterprise" under O.C.G.A. § 48-7-40 and defines the term based on use of domestic wood fiber or forest by-products.
• Section 2 also allows forestry manufacturers to earn the same $500 per new job credit as other existing business enterprises for jobs created from 2026 through 2030.
• Sections 3 through 6 extend forestry manufacturing eligibility to related tax credit statutes for tier 1 through tier 4 counties, with investment credit rates from 3 percent up to 15 percent.
• Each amended section adds a credit transfer mechanism letting forestry manufacturers sell unused credits to other Georgia taxpayers, subject to a 30-day notice requirement to the Department of Revenue.
• Section 7 creates new Code Section 48-7-40.4A, capping aggregate forestry manufacturer credits at $250 million statewide and $100 million for 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 taxable years beginning on or after January 1, 2026.
• The credit transfer provisions in each section are set to automatically repeal on December 31, 2030, though transfers of credits earned before that date remain valid afterward.

1. 2026-05-06Effective Date 2026-07-01
2. 2026-05-06Act 427
3. 2026-05-06House Date Signed by Governor (House)
4. 2026-04-10House Sent to Governor (House)
5. 2026-03-31Senate Agreed House Amend or Sub (Senate)
6. 2026-03-31House Agreed Senate Amend or Sub As Amended (House)
7. 2026-02-12Senate Passed/Adopted By Substitute (Senate)
8. 2026-02-12Senate Third Read (Senate)

• Beth Camp (R, HD-135)Primary sponsor
• Rick Jasperse (R, HD-011)
• James Burchett (R, HD-176)
• John Corbett (R, HD-174)
• Noel Williams (R, HD-148)
• David Jenkins (R, HD-136)
• Blake Tillery (R, SD-019)

1. PassedHouse voteFebruary 26, 2025

   160 yea, 0 nay (4 not voting, 16 absent)

   Passage: House Vote #91

2. PassedSenate voteApril 2, 2025

   31 yea, 24 nay (0 not voting, 1 absent)

   Motion To Engross: Sb 214, Hb 66, Hb 79, Hb 129, Hb 134, Hb 141, Hb 370, Hb 397, Hb 445, Hb 463, Hb 532, Hb 586, Hb 652: Senate Vote #383

3. PassedSenate voteFebruary 12, 2026

   31 yea, 17 nay (2 not voting, 4 absent)

   Passage By Substitute: Senate Vote #544

4. PassedHouse voteMarch 31, 2026

   156 yea, 5 nay (8 not voting, 7 absent)

   Agree To Senate Sub As Am: House Vote #813

5. PassedSenate voteMarch 31, 2026

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

   Agree To House Amendment To Senate Substitute: Senate Vote #923

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