HB 151: Income tax; deduction for casualty losses of timber in an amount based on the diminution of value; provide

Under current Georgia tax law, timberland owners who suffer a casualty loss (such as damage from a storm, fire, or disease) can deduct that loss on their federal tax return, but Georgia's state income tax treatment is separate. This bill adds a new deduction to Georgia's income tax code (O.C.G.A. § 48-7-27) for casualty losses of timber, calculated as the drop in fair market value of up to 2,000 acres of timberland before and after the loss. The deduction only applies to the portion of the loss that exceeds the property's original cost basis, applies only to Georgia property, cannot be claimed twice for the same land, and must be reduced by any insurance payments, tax credits, grants, or other relief already received. Owners of S corporations, partnerships, or LLCs can only claim it at the entity level, not individually. The state caps total deductions statewide at $347 million per year, tracked publicly by the Department of Revenue, and any amount claimed beyond that cap gets added back to taxable income. The law would take effect July 1, 2025, applying to tax years starting on or after January 1, 2025.

• Creates a new Georgia income tax deduction for casualty losses of timber, based on the drop in fair market value of the affected timberland.
• Limits the deduction to the value lost on up to 2,000 acres per casualty loss and only to amounts exceeding the property's original cost basis.
• Requires the loss to be reduced by any insurance payouts, tax credits, deductions, disaster payments, grants, or other relief already received for the same loss.
• Restricts owners of S corporations, partnerships, or LLCs to claiming the deduction only at the entity level, not as individuals.
• Caps the total amount that can be deducted statewide at $347 million per calendar year, with the Department of Revenue tracking and publishing the running total.
• Requires any amount claimed above the annual cap to be added back to the taxpayer's Georgia taxable income.

Timberland owners in Georgia, including individuals and owners of S corporations, partnerships, and limited liability companies who hold timber property that suffers casualty losses such as storm or fire damage. The Georgia Department of Revenue would also be responsible for tracking and publishing deduction totals.

Timberland owners who lose value in their timber due to storms, disease, or other casualties could reduce their Georgia taxable income by that lost value, potentially lowering their state tax bills. Because the total deduction is capped statewide, if claims are heavy in a bad year, some owners could have deductions reduced or added back once the cap is reached.

• Section 1 adds paragraph (17) to O.C.G.A. § 48-7-27(b), allowing a subtraction from Georgia taxable income for timber casualty losses based on the fair market value drop on up to 2,000 acres.
• The deduction only covers loss amounts exceeding the taxpayer's cost basis, must relate to Georgia property, cannot be claimed by more than one person for the same land, and must exclude amounts already covered by insurance or other relief.
• S corporation, partnership, and LLC owners may claim the deduction only at the entity level, not individually.
• Sets a $347 million aggregate annual cap on the deduction across all Georgia tax returns, tracked and publicly reported by the Department of Revenue.
• Amounts claimed beyond the annual cap are added back to the taxpayer's Georgia taxable income by the department.
• Section 2 sets the effective date as July 1, 2025, applying to tax years beginning on or after January 1, 2025.

1. 2025-01-30House Second Readers (House)
2. 2025-01-29House First Readers (House)
3. 2025-01-28House Hopper (House)

• Martin Momtahan (R, HD-017)Primary sponsor
• Charles Cannon (R, HD-172)
• Leesa Hagan (R, HD-156)
• John Corbett (R, HD-174)
• Angie O'Steen (R, HD-169)
• Noel Williams (R, HD-148)

• income tax deductions
• timber industry
• casualty losses
• agriculture tax policy
• Georgia Department of Revenue