Georgia CommonsHouse · Passed · 2025-2026 Regular Session
HB 463: Ad valorem tax; certain senior citizens who volunteer with local governments; provide homestead exemption
Last action May 11, 2026 · Effective Date
A Georgia bill titled as a homestead exemption for senior volunteers actually contains sweeping tax law changes: lower income tax rates, bigger deductions, new overtime and tip exemptions, and repeal of several business tax credits.
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 Enrolled version, the latest the General Assembly's website lists.
In plain language
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.
What the bill does
- 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.
Who it affects
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.
Why it matters
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.
Key provisions
- 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.
From the bill
“This Act shall be known and may be cited as the "Georgia Economic Growth and Tax Relief Act of 2026."”
“Any amount of undesignated surplus funds in excess of 20 percent of the previous fiscal year's net revenue may be used for tax relief pursuant to Acts of the General Assembly.”
Discussed in meetings (6)
The House and Senate meetings that took this bill up, from their machine transcripts. Each account was written by Georgia Commons with AI and is not part of the record; the video is what was said.
Senate Finance Committee, February 9, 2026
From 1:21:59 · Watch on the General Assembly's Vimeo channel
Summary by Georgia Commons: The sponsor proposed replacing the existing language of HB 463 with the income-tax rate reductions and revenue conditions just approved in SB 477. The sponsor said the substitute would defer to the House's position that tax-cut bills are revenue bills and should originate in that chamber. A member moved to approve the substitute, another member seconded, and the committee approved it 9-3.
Senate Rules Committee, February 11, 2026
From 0:10:03 · Watch on the General Assembly's Vimeo channel
Summary by Georgia Commons: The committee chair who had handled the bills described HB 463 as a duplicate of SB 477. That committee chair confirmed the chair's statement that the two measures corresponded. The chair had described SB 477 as eliminating income tax for joint filers with income up to $100,000 and individual filers with income up to $50,000, with additional tax credit provisions. No separate explanation of HB 463 was given. The committee unanimously approved placing all four bills on the next day's floor calendar.
Senate floor session, February 12, 2026 (legislative day 18)
From 1:17:41 · Watch on the General Assembly's Vimeo channel · Confirmed by the bill's status history (Senate Third Read)
Summary by Georgia Commons: The majority leader initially included the bill in a request to block floor amendments, then removed it because it was already protected from amendments from the previous year. Later, the clerk read the original proposal for a local property-tax exemption for senior volunteers, followed by a Finance Committee replacement addressing income taxes. The presenting senator said the replacement inserted SB 477 into a House bill to avoid a dispute over whether tax-cut legislation must originate in the House. The senator said the Senate did not share the House's interpretation but wanted that issue removed as an obstacle to tax relief. The only question concerned whether other senators had tax proposals, not the replacement's provisions. The Senate adopted the replacement without objection and passed the bill 32 to 14.
Senate floor session, April 2, 2026 (legislative day 40, part 2)
From 3:38:23 · Watch on the General Assembly's Vimeo channel · Confirmed by the bill's status history (Senate Agreed House Amend or Sub)
Summary by Georgia Commons: The presenter said the House amendment to HB 463 would gradually lower the income-tax rate to 3.99%, raise standard deductions to $18,000 for individuals and $36,000 for families, and raise the dependent deduction to $6,000 by 2027. The presenter also described $1,750 exemptions for tips and overtime wages, revenue conditions for future reductions, a taxpayer-relief fund and removal of 10 tax breaks. Asked whether removing those breaks fully covered the reductions, the presenter said no and could not provide the gap, but pointed to revenue safeguards. One opponent estimated an eventual $6.5 billion annual revenue loss and raised concerns about whether House members received the complete amendment. Another opponent said higher-income taxpayers would benefit most and essential services could lose funding, while defending job-creation credits. The presenter argued that the compromise would still provide relief and that larger Senate proposals would not return that night. Members also disputed whether Democrats had offered alternatives and whether amendments were possible. The clerk’s reading included a higher retirement-income exclusion for people 65 and older. The Senate agreed to the House amendment, 33–20.
House floor session, April 2, 2026 (legislative day 40, PM, part 1)
From 3:09:11 · Watch on the General Assembly's Vimeo channel · Confirmed by the bill's status history (House Agreed Senate Amend or Sub As Amended)
Summary by Georgia Commons: The presenter said HB 463 had become an income tax package. It would initially increase the standard deduction by $3,000 for single filers and $6,000 for married filers, add $1,000 to the dependent deduction, and phase in further deductions and rate reductions through eight steps tied to revenue conditions. The presenter also described raising the senior exemption from $65,000 to $70,000, excluding $1,750 each in tips and overtime income, changing reserve funds, and ending several credits and exemptions. One member argued that movement toward a 3.99% flat rate would disproportionately benefit top earners and questioned whether earlier revenue conditions had been followed. The presenter said reductions reflected taxpayers' contributions and cited a structural surplus, but did not provide the requested history. Asked why a pollution-control equipment exemption would end, the presenter said it was understood to be little used or obsolete. Another member supported the package as a measured approach to tax relief. The House adopted amendment AM590036 and agreed to the amended Senate substitute, 104 to 71.
Status timeline
- Effective Date
- Act 465
- House Date Signed by Governor (House)
- House Sent to Governor (House)
- Senate Agreed House Amend or Sub (Senate)
- House Agreed Senate Amend or Sub As Amended (House)
- Senate Passed/Adopted By Substitute (Senate)
- Senate Third Read (Senate)
Show full history (22 actions)
- Senate Committee Favorably Reported By Substitute (Senate)
- Senate Recommitted (Senate)
- Senate Taken from Table (Senate)
- Senate Tabled (Senate)
- Senate Engrossed (Senate)
- Senate Read Second Time (Senate)
- Senate Committee Favorably Reported (Senate)
- Senate Read and Referred (Senate)
- House Passed/Adopted By Substitute (House)
- House Third Readers (House)
- House Committee Favorably Reported By Substitute (House)
- House Second Readers (House)
- House First Readers (House)
- House Hopper (House)
Sponsors
- Shaw Blackmon (R, HD-146)
- Jon Burns (R, HD-159)
- Matt Hatchett (R, HD-155)
- Carl Gilliard (D, HD-162)
- Ron Stephens (R, HD-164)
- Beth Camp (R, HD-135)
- Blake Tillery (R, SD-19)
Votes
- House voteMarch 4, 2025
171 yea, 0 nay (2 not voting, 7 excused)
- Senate voteApril 2, 2025
31 yea, 24 nay (0 not voting, 1 excused)
- Senate voteFebruary 12, 2026
32 yea, 14 nay (2 not voting, 6 excused)
- House voteApril 2, 2026
104 yea, 71 nay (1 not voting, 0 excused)
- Senate voteApril 2, 2026
33 yea, 20 nay (0 not voting, 1 excused)
Topics
- income tax rates
- tax deductions
- overtime and tip taxation
- business tax credits
- state revenue reserve