--- title: HB 388. Income tax; exempt income received as personal compensation for active duty service while stationed outside Georgia collection: bills id: 2025-2026/hb388 cite_as: HB 388, 2025-2026 Regular Session (Ga.) canonical_url: https://georgiacommons.org/bills/2025-2026/hb388 md_url: https://georgiacommons.org/bills/2025-2026/hb388.md text_url: https://georgiacommons.org/bills/2025-2026/hb388/text source_url: https://www.legis.ga.gov/legislation/70188 date: 2025-02-13 status: introduced corpus_version: bills-2026-09-13 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/hb387.md next: https://georgiacommons.org/bills/2025-2026/hb389.md index: https://georgiacommons.org/bills/index.md omitted: votes and history omitted_chars: 129 omitted_url: https://georgiacommons.org/bills/2025-2026/hb388.md?full=1 bill_number: HB 388 session: 2025-2026 Regular Session session_slug: 2025-2026 chamber: House bill_type: bill status_date: 2025-02-11 last_action: House Second Readers sponsors: - David Clark - Josh Bonner - Bill Hitchens - Reynaldo Martinez - Charles Cannon - Brad Thomas text_version: Introduced has_text: true legiscan_url: https://legiscan.com/GA/bill/HB388/2025 upstream_id: 1965775 summaries_model: claude-sonnet-5 topic_tags: - income tax - military pay - veterans and service members - tax exemptions --- # HB 388. Income tax; exempt income received as personal compensation for active duty service while stationed outside Georgia ## Text House Bill 388 By: Representatives Clark of the 100th, Bonner of the 73rd, Hitchens of the 161st, Martinez of the 111th, Cannon of the 172nd, and others A BILL TO BE ENTITLED AN ACT To amend Article 2 of Chapter 7 of Title 48 of the Official Code of Georgia Annotated, relating to the imposition, rate, computation, exemptions, and credits for state income tax, so as to exempt from state income tax income received as personal compensation for active duty service in the United States armed forces while stationed outside Georgia; to provide for related matters; to provide for an effective date and applicability; to repeal conflicting laws; and for other purposes. BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA: SECTION 1. Article 2 of Chapter 7 of Title 48 of the Official Code of Georgia Annotated, relating to the imposition, rate, computation, exemptions, and credits for state income tax, is amended in subsection (a) of Code Section 48-7-27, relating to the computation of taxable net income, by adding a new paragraph to read as follows: "(12.6) Income received as personal compensation for active duty service in the United States armed forces while stationed outside Georgia;" SECTION 2. This Act shall become effective on July 1, 2025, and shall be applicable to all taxable years beginning on or after January 1, 2026. SECTION 3. All laws and parts of laws in conflict with this Act are repealed. ## 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 Georgia House bill would exempt military members' active duty pay from state income tax when they are stationed outside Georgia, starting with the 2026 tax year. ### Plain-language summary Under current Georgia law, income earned by members of the U.S. armed forces on active duty can be subject to state income tax even when a service member is stationed outside Georgia. This bill changes that by adding a new exemption to the state's income tax code (O.C.G.A. § 48-7-27), removing personal compensation for active duty service performed while stationed outside Georgia from a person's taxable net income. The bill amends Article 2 of Chapter 7 of Title 48 of the Official Code of Georgia, which governs how the state computes income tax. If enacted, the change would take effect July 1, 2025, but would only apply to taxable years beginning on or after January 1, 2026, meaning the first tax returns affected would be those filed for the 2026 tax year. ### What it does - Adds a new exemption to Georgia's income tax law (O.C.G.A. § 48-7-27) for pay earned from active duty military service performed while stationed outside Georgia. - Excludes that active duty compensation from a taxpayer's computed net income, lowering the amount of income subject to state tax. - Sets the law to take effect July 1, 2025, but applies it only to tax years starting on or after January 1, 2026. - Repeals any existing state laws that conflict with the new exemption. ### Who it affects Georgia residents serving on active duty in the U.S. armed forces who are stationed outside Georgia would see their military pay for that service exempted from state income tax. The Georgia Department of Revenue would need to implement the new exemption category. ### Why it matters Service members stationed outside Georgia would keep more of their active duty pay because that income would no longer count toward their Georgia taxable income, potentially lowering their state tax bills starting with returns for the 2026 tax year. ### Key provisions - Section 1 adds new paragraph (12.6) to O.C.G.A. § 48-7-27(a), exempting personal compensation for active duty service performed while stationed outside Georgia from taxable net income. - Section 2 sets an effective date of July 1, 2025, but limits applicability to taxable years beginning on or after January 1, 2026. - Section 3 repeals any conflicting laws, a standard clause ensuring the new exemption takes precedence over inconsistent provisions. ## Status - Status: Introduced (2025-02-11) - Last action: House Second Readers (2025-02-13) - Sponsors: David Clark, Josh Bonner, Bill Hitchens, Reynaldo Martinez, Charles Cannon, Brad Thomas - Official page: https://www.legis.ga.gov/legislation/70188 > The history, votes, and amendments (129 characters) are at https://georgiacommons.org/bills/2025-2026/hb388.md?full=1