Georgia CommonsHB 1506: Contracts; payment terms for business to business transactions; provide
Last action March 9, 2026 · House Second Readers
A Georgia House bill would require businesses to pay other businesses within 30 days of receiving completed work or services under a contract, and adds a new legal definition for business-to-business transactions.
The summaries below were written by an AI model (claude-sonnet-5) from the text of the bill and are not part of it. Quote the text, not the summary. The stored text is the Introduced version, the latest LegiScan holds.
In plain language
Georgia's prompt payment law (O.C.G.A. Chapter 11 of Title 13) currently sets payment timing rules mainly for construction contracts between owners, contractors, and subcontractors. This bill adds a new category of covered transactions: general business-to-business deals involving the exchange of goods, services, or information for payment. The bill amends the law's definitions section to define 'business to business transaction' and adds a new Code section, 13-11-4.1, stating that when a business has performed under a contract, it must be paid within 30 days of receipt for the work or service completed. The bill does not specify a separate effective date, so it would take effect under Georgia's standard rules once signed into law, and it repeals any conflicting laws.
What the bill does
- Adds a new definition for 'business to business transaction' meaning an exchange of goods, services, or information for payment between two or more businesses.
- Creates a new Code section (13-11-4.1) requiring payment within 30 days of receipt when a business has performed under a contract with another business.
- Extends prompt payment obligations, previously focused on construction contracting relationships, to general business-to-business contracts.
- Repeals any existing Georgia laws that conflict with the new 30-day payment requirement.
Who it affects
Georgia businesses that enter contracts with other businesses for goods, services, or information, including vendors, suppliers, and service providers, as well as the businesses that owe them payment. Contractors, subcontractors, and property owners already covered by the existing prompt payment law may also see clarified definitions.
Why it matters
Businesses waiting on payment from other businesses would gain a clear 30-day deadline after receipt of goods or services, giving them a legal basis to expect timely payment. Businesses that pay slowly for goods or services would need to adjust to meet the new deadline or risk violating the law.
Key provisions
- Section 1 revises Code Section 13-11-2 by adding a new definition of 'business to business transaction' and renumbering existing definitions such as contractor, improvement, owner, and subcontractor.
- Section 1 also clarifies that the term 'owner' includes private persons, entities, and government agencies, with existing exceptions for very small counties and municipalities.
- Section 2 adds new Code Section 13-11-4.1, requiring payment within 30 days of receipt for work or services completed under a business-to-business contract.
- Section 3 repeals any laws in conflict with the new requirements.
From the bill
“'Business to business transaction' means a financial exchange of goods, services, or information for payment between two or more businesses.”
“In any business to business transaction where a business has performed in accordance with the provisions of a contract, such business shall within 30 days of receipt be paid for any work completed or service provided under the contract.”
Status timeline
- House Second Readers (House)
- House First Readers (House)
- House Hopper (House)
Sponsors
- Jasmine Clark (D, HD-108)
- Samuel Park (D, HD-107)
- Dar'shun Kendrick (D, HD-095)
- Solomon Adesanya (D, HD-043)
Topics
- prompt payment law
- business contracts
- small business
- payment deadlines