--- title: HB 370. Ad valorem tax; school districts; state-wide base year homestead exemption; provisions collection: bills id: 2025-2026/hb370 cite_as: HB 370, 2025-2026 Regular Session (Ga.) canonical_url: https://georgiacommons.org/bills/2025-2026/hb370 md_url: https://georgiacommons.org/bills/2025-2026/hb370.md text_url: https://georgiacommons.org/bills/2025-2026/hb370/text source_url: https://www.legis.ga.gov/legislation/70132 date: 2025-04-04 status: engrossed corpus_version: bills-2026-08-28 license: Public record of the Georgia General Assembly, via LegiScan; see about.md publisher: Georgia Commons, an independent project of Georgia Civic Data. Not the State of Georgia. Not legal advice. up: https://georgiacommons.org/bills/2025-2026.md previous: https://georgiacommons.org/bills/2025-2026/hb369.md next: https://georgiacommons.org/bills/2025-2026/hb371.md index: https://georgiacommons.org/bills/index.md omitted: votes and history omitted_chars: 1631 omitted_url: https://georgiacommons.org/bills/2025-2026/hb370.md?full=1 bill_number: HB 370 session: 2025-2026 Regular Session session_slug: 2025-2026 chamber: House bill_type: bill status_date: 2025-03-06 last_action: House Agreed Senate Amend or Sub As Amended sponsors: - Houston Gaines - Jan Jones - Bruce Williamson - Chuck Efstration - Trey Kelley - Marcus Wiedower - Chuck Hufstetler text_version: Comm Sub has_text: true legiscan_url: https://legiscan.com/GA/bill/HB370/2025 upstream_id: 1964528 summaries_model: claude-sonnet-5 topic_tags: - income tax credit - small business health benefits - health reimbursement arrangements - Georgia tax law --- # HB 370. Ad valorem tax; school districts; state-wide base year homestead exemption; provisions ## Text 25 LC 50 1260S The Senate Committee on Finance offered the following substitute to HB 370: A BILL TO BE ENTITLED AN ACT To amend Article 2 of Chapter 7 of Title 48 of the Official Cod e of Georgia Annotated,1 relating to imposition, rate, computation, exemptions, and credits for income taxes, so as to2 create a tax credit for certain employers that offer individual coverage health reimbursement3 arrangements to employees; to provide for terms, conditions, and limitations; to provide for4 preapproval; to provide for aggregate annual limits; to provide for rules and regulations; to5 provide for definitions; to provide for a sunset; to provide for related matters; to provide for6 an effective date and applicability; to repeal conflicting laws; and for other purposes.7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:8 SECTION 1.9 Article 2 of Chapter 7 of Title 48 of the Official Code of Geor gia Annotated, relating to10 imposition, rate, computation, exemp tions, and credits for inco me taxes, is amended by11 revising Code Section 48-7-40.10, which is reserved, as follows:12 "48-7-40.10.13 (a) As used in this Code section, the term:14 (1) 'Covered employee' means an employee who is covered by an individual coverage15 health reimbursement arrangement provided by a qualified taxpayer.16 - 1 - 25 LC 50 1260S (2) 'Individual coverage health reimbursement arrangement' mea n s a h e a l t h17 reimbursement arrangement established pursuant to 45 C.F.R. Section 146.123.18 (3) 'Qualified taxpayer' means any taxpayer with fewer than 50 employees that offers an19 individual coverage health reimbursement arrangement.20 (b) For taxable years beginning on or after January 1, 2026, a qualified taxpayer shall be21 allowed a tax credit against the tax imposed under this article for contributions to an22 individual coverage health reimbursement arrangement for employees who are residents23 of this state, provided that:24 (1) The qualified taxpayer contributed at least $200.00 per mo nth to an individual25 coverage health reimbursement arrangement for each covered employee; and26 (2) The contribution made by the qualified taxpayer for each e mployee for which the27 qualified taxpayer is seeking a credit pursuant to this Code section is equal to or greater28 than the total amount of contributions to any employer sponsore d health benefit plan29 made by the qualified taxpayer for such employee in the previous taxable year.30 (c)(1) The amount of the credit allowed pursuant to this Code section shall not exceed31 an amount equal to:32 (A) In the first three years a credit is claimed pursuant to t his Code section, $600.0033 per covered employee;34 (B) In the fourth year a credit is claimed pursuant to this Co de section, $400.00 per35 covered employee; and36 (C) In the fifth year a credit is claimed pursuant to this Cod e section, $200.00 per37 covered employee.38 (2) No qualified taxpayer shall be allowed a tax credit pursuant to this Code section for39 more than five total years.40 (d) In no event shall the aggregate amount of tax credits allo wed pursuant to this Code41 section exceed $5 million per year.42 - 2 - 25 LC 50 1260S (e)(1) To be allowed a tax credit pursuant to this Code section, a taxpayer shall submit43 an application for preapproval no later than October 1 of the year preceding the year in 44 which the credit pursuant to this Code section would be allowed.45 (2) The department shall require preapproval applications to c ontain such information46 as is necessary to substantiate a taxpayer's eligibility for tax credits allowed pursuant to47 this Code section.48 (3) The department shall review completed preapproval applicat ions in the order in49 which such applications were received; provided, however, that the department shall50 prioritize the review of completed preapproval applications from qualified taxpayers that51 have already claimed a credit pursuant to this Code section before any other preapproval52 applications.53 (4) The department shall approve properly completed and timely submitted preapproval54 applications and shall issue preapproval certificates to approv ed taxpayers by55 November 1 of each year, certifying the amount of credits each such taxpayer is eligible56 to claim if the taxpayer meets the conditions of this Code section.57 (f) If the qualified taxpayer allowed a tax credit pursuant to this Code section is a58 pass-through entity and has no income tax liability pursuant to this article, such tax credit59 may be claimed by its members, shareholders, or partners based on the percentage of such60 qualified taxpayer's distributive income to which the member, s hareholder, or partner is61 entitled.62 (g) In no event shall the total amount of a tax credit allowed to any qualified taxpayer63 pursuant to this Code section exceed such taxpayer's income tax liability. No unused tax64 credit shall be allowed the qualified taxpayer against succeedi ng years' tax liability. No65 such credit shall be allowed the qualified taxpayer against prior years' tax liability.66 (h) The department shall promulgate any rules and regulations necessary to implement and67 administer the provisions of this Code section.68 (i) This Code section shall stand repealed and reserved on December 31, 2028. Reserved."69 - 3 - 25 LC 50 1260S SECTION 2.70 This Act shall become effective on July 1, 2025, and shall be a pplicable to taxable years71 beginning on or after January 1, 2026.72 SECTION 3.73 All laws and parts of laws in conflict with this Act are repealed.74 - 4 - ## Summaries written by Georgia Commons The following was written by claude-sonnet-5 from the text above and is not part of the bill. Quote the text, not the summary. A Senate committee substitute for HB 370 would create a Georgia income tax credit for small employers that contribute to individual coverage health reimbursement arrangements for their employees, capped at $5 million total per year. ### Plain-language summary This version of HB 370, despite its title referencing property tax homestead exemptions, actually rewrites a reserved section of Georgia's income tax code to create a new tax credit. The credit is aimed at employers with fewer than 50 employees that offer an individual coverage health reimbursement arrangement (ICHRA), a type of benefit where employers give workers money to buy their own health insurance instead of offering a traditional group plan. To qualify, an employer must contribute at least $200 per month per covered employee and must not reduce its contribution compared to what it spent on that employee's coverage the previous year. The credit starts at $600 per employee for the first three years, drops to $400 in year four and $200 in year five, and cannot be claimed for more than five years per employer. Employers must apply for preapproval each year by October 1, and total statewide credits are capped at $5 million annually. The credit applies to tax years beginning on or after January 1, 2026, and the underlying Code section repeals itself on December 31, 2028. ### What it does - Creates a new Georgia income tax credit for employers with fewer than 50 employees that contribute at least $200 per month per employee to an individual coverage health reimbursement arrangement (ICHRA). - Sets a declining credit schedule: $600 per covered employee in years one through three, $400 in year four, and $200 in year five, with a five-year maximum per employer. - Caps the total amount of credits the state will allow across all employers at $5 million per year. - Requires employers to apply for preapproval by October 1 each year and receive certification from the Department of Revenue by November 1. - Allows pass-through entities such as partnerships to pass the credit to their members, shareholders, or partners based on ownership share. - Automatically repeals this tax credit provision on December 31, 2028. ### Who it affects Small Georgia employers with fewer than 50 employees that offer individual coverage health reimbursement arrangements, their covered employees who are Georgia residents, pass-through business owners such as partners and shareholders, and the Georgia Department of Revenue, which must review applications and issue preapproval certificates. ### Why it matters Small businesses that help employees buy individual health insurance through an ICHRA could receive a state tax credit worth up to $600 per employee annually, potentially making this benefit approach more affordable, while the $5 million annual cap and October application deadline mean not every eligible employer is guaranteed to receive the credit. ### Key provisions - Section 1 rewrites O.C.G.A. ยง 48-7-40.10 to define 'qualified taxpayer' as an employer with fewer than 50 employees offering an ICHRA. - Subsection (b) requires at least $200 per month in contributions per covered employee and bars reducing contributions from the prior year's health benefit spending. - Subsection (c) sets the credit amount on a declining five-year schedule from $600 down to $200 per employee, with no more than five years of credit per employer. - Subsection (d) caps total statewide credits at $5 million per year. - Subsection (e) requires preapproval applications by October 1 and certification by the Department of Revenue by November 1, prioritizing employers who already claim the credit. - Subsection (i) repeals and reserves this Code section on December 31, 2028. - Section 2 makes the Act effective July 1, 2025, applicable to tax years beginning on or after January 1, 2026. ## Status - Status: Engrossed (2025-03-06) - Last action: House Agreed Senate Amend or Sub As Amended (2025-04-04) - Sponsors: Houston Gaines, Jan Jones, Bruce Williamson, Chuck Efstration, Trey Kelley, Marcus Wiedower, Chuck Hufstetler - Official page: https://www.legis.ga.gov/legislation/70132 > The history, votes, and amendments (1,631 characters) are at https://georgiacommons.org/bills/2025-2026/hb370.md?full=1