HB 537: Revenue and taxation; maximum amount of local sales and use taxes that may be imposed; provide

Georgia law already caps most local sales and use taxes at 2 percent combined, with a handful of exceptions such as the 1 percent education sales tax and certain transportation taxes. House Bill 537 revises that cap in O.C.G.A. § 48-8-6, adding a new exception of up to 1 percent for taxes that fund a metropolitan public transportation system (the kind authorized for MARTA), but only in counties that already levy a specific transit-related tax under a different part of the code. It also removes language that had barred a grandfathered, over-the-cap tax from ever being renewed once it expires, meaning some existing local taxes that exceed the new cap could potentially continue past their current terms. The bill also rewrites large portions of the law governing special district sales taxes used for property tax relief (O.C.G.A. §§ 48-8-109.31 through 48-8-109.33). It clarifies which local governments must sign an intergovernmental agreement before such a tax can go on the ballot, requires a homestead exemption to be in place first, sets rules for splitting proceeds when some cities do not join the agreement, and adds a process for counties to adopt a resolution instead of an agreement when none is required. It also updates how a special district can later hold another referendum to reimpose the tax once the original one expires.

• Adds a new carve-out to the statewide 2 percent local sales tax cap for up to 1 percent in taxes funding a metropolitan public transportation system, but only in counties that already levy a related transit tax.
• Removes the current rule that a grandfathered tax exceeding the new cap can never be renewed once it expires, instead simply requiring that jurisdiction follow the cap going forward.
• Requires counties and cities that create a special district property-tax-relief sales tax to have a homestead exemption (a break on property taxes for a primary home) in place before calling a referendum.
• Sets out how sales tax proceeds must be split among cities that did not sign the required intergovernmental agreement, based on their share of the district's population.
• Adds a process letting a county or consolidated government adopt a resolution instead of an intergovernmental agreement when no such agreement is legally required.
• Clarifies how a special district can ask the General Assembly to pass a local law allowing voters to reimpose the tax before or after the current tax expires.

County and municipal governments that levy or want to levy local sales taxes, especially those in special districts using sales tax revenue for property tax relief, counties with transit systems similar to MARTA, and Georgia residents who pay local sales taxes or benefit from homestead property tax exemptions.

The bill changes how much local sales tax can stack up in a given area and which taxes count toward the 2 percent limit, which affects prices at checkout. It also changes the process local governments must follow to ask voters for a sales tax used to lower property taxes, including new homestead exemption and agreement requirements.

• Section 1 amends O.C.G.A. § 48-8-6 to add a new exception of up to 1 percent for metropolitan transit taxes tied to the 1964 MARTA constitutional amendment, limited to counties already levying a related Article 2A tax.
• Section 1 also removes the prior ban on renewing a grandfathered tax that exceeds the new 2 percent cap once that tax expires or terminates.
• Section 2 revises O.C.G.A. § 48-8-109.31 to require a homestead exemption be in place before a special district property-tax-relief sales tax referendum can be called, and caps that tax at 1 percent in 0.05 percent increments.
• Section 2 defines 'absent municipality' and sets a population-based formula for distributing tax proceeds to cities that did not join the required intergovernmental agreement.
• Section 3 adds a new subsection to O.C.G.A. § 48-8-109.32 allowing a county or consolidated government to adopt a resolution instead of an intergovernmental agreement when none is legally required.
• Section 4 revises O.C.G.A. § 48-8-109.33 to change how the tax's start date applies to monthly billed services and to clarify the process for a local Act authorizing reimposition of the tax after it expires.

1. 2025-02-21House Second Readers (House)
2. 2025-02-20House First Readers (House)
3. 2025-02-19House Hopper (House)

• Shaw Blackmon (R, HD-146)Primary sponsor

• local sales tax
• property tax relief
• MARTA transit tax
• homestead exemption
• special district taxes