HB 463: Ad valorem tax; certain senior citizens who volunteer with local governments; provide homestead exemption

Although this bill is labeled as creating a homestead exemption for senior citizens who volunteer with local governments, the text of House Bill 463 (called the "Georgia Economic Growth and Tax Relief Act of 2026") does not create that exemption. Instead it makes broad changes to Georgia's income tax law (O.C.G.A. Title 48). It lowers the personal income tax rate starting in 2026 and sets up further rate cuts tied to state revenue conditions. It raises the standard deduction and dependent deduction amounts, with built-in future increases if state revenue keeps growing. It raises the amount of retirement income people 65 and older can exclude from state taxes, and creates temporary state tax exemptions for a portion of overtime pay and cash tips through 2028, with new reporting duties for employers. The bill also repeals several business tax credits and sales tax exemptions, including credits for medical equipment manufacturers, alternative fuel vehicles, and business headquarters, and raises the cap on the state's Revenue Shortfall Reserve fund from 15 to 20 percent. It would take effect once signed by the Governor and apply to tax years starting January 1, 2026.

• Cuts the personal income tax rate to 4.99 percent starting in 2026, with further reductions toward 3.99 percent if revenue conditions allow.
• Raises the standard deduction to $30,000 for joint filers and $15,000 for single filers, and the dependent deduction to $5,000, with future increases planned through 2027 and beyond.
• Increases the retirement income exclusion for taxpayers 65 and older to as much as $70,000 starting in 2027.
• Creates temporary state income tax exemptions (through 2028) for up to $1,750 of overtime pay and up to $1,750 of cash tips, and requires employers to report these amounts to the state.
• Repeals multiple business tax credits, including those for medical equipment manufacturers, personal protective equipment makers, alternative fuel vehicles, and businesses headquartered in Georgia.
• Raises the cap on the state's Revenue Shortfall Reserve fund from 15 percent to 20 percent of the prior year's net revenue.

Georgia individual income taxpayers, especially retirees over 65, hourly workers who earn overtime, and tipped employees. Employers face new reporting requirements. Businesses that currently claim credits for manufacturing medical supplies, alternative fuel vehicles, or headquartering in Georgia would lose those credits.

Most Georgia taxpayers would see a lower income tax rate and bigger deductions, while workers earning overtime or tips could exclude some of that income from state taxes through 2028. At the same time, several businesses would lose tax credits they currently rely on, and the state would set aside more reserve funds before releasing surplus money for other uses.

• Section 2-1 lowers the personal income tax rate to 4.99 percent for 2026, with annual 0.125 percent reductions toward 3.99 percent, subject to delay if revenue targets are not met.
• Section 2-2 raises the dependent deduction from $4,000 to $5,000, rising to $6,000 by $125 increments starting 2027.
• Section 2-3 raises standard deductions to $30,000 (joint) and $15,000 (single/head of household), with scheduled increases to $36,000 and $18,000, and raises the retirement income exclusion cap to $70,000 for eligible taxpayers starting 2027.
• Section 2-4 creates temporary exemptions (2026-2028) for up to $1,750 of overtime pay and $1,750 of cash tips, requiring employer reporting to the Department of Revenue.
• Sections 4-1 through 4-9 repeal numerous business tax credits, including those for teleworking expenses, PPE and medical equipment manufacturers, port traffic increases, and alternative fuel vehicles.
• Section 4-10 ends new sales tax exemption certificates for pollution-control machinery and equipment, though existing certificates remain valid.
• Section 3-2 raises the Revenue Shortfall Reserve cap from 15 percent to 20 percent of the prior year's net revenue and allows surplus above that cap to be used for tax relief.
• Section 5-1 makes the Act effective upon the Governor's signature, applying to tax years beginning on or after January 1, 2026.

1. 2026-05-11Effective Date 2026-05-11
2. 2026-05-11Act 465
3. 2026-05-11House Date Signed by Governor (House)
4. 2026-04-10House Sent to Governor (House)
5. 2026-04-02Senate Agreed House Amend or Sub (Senate)
6. 2026-04-02House Agreed Senate Amend or Sub As Amended (House)
7. 2026-02-12Senate Passed/Adopted By Substitute (Senate)
8. 2026-02-12Senate Third Read (Senate)

• Shaw Blackmon (R, HD-146)Primary sponsor
• Jon Burns (R, HD-159)
• James Hatchett (R, HD-155)
• Carl Gilliard (D, HD-162)
• Ron Stephens (R, HD-164)
• Beth Camp (R, HD-135)
• Blake Tillery (R, SD-019)

1. PassedHouse voteMarch 4, 2025

   171 yea, 0 nay (2 not voting, 7 absent)

   Passage: House Vote #188

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

   32 yea, 14 nay (2 not voting, 6 absent)

   Passage By Substitute: Senate Vote #546

4. PassedHouse voteApril 2, 2026

   104 yea, 71 nay (1 not voting, 0 absent)

   Agree To Senate Sub As Am: House Vote #849

5. PassedSenate voteApril 2, 2026

   33 yea, 20 nay (0 not voting, 1 absent)

   Agree To House Amendment To Senate Substitute: Senate Vote #971

• income tax rates
• tax deductions
• overtime and tip taxation
• business tax credits
• state revenue reserve