HB 66: Ad valorem tax; expand definition of rental motor vehicle

Although HB 66 was originally titled around rental motor vehicle taxes, the version shown here is a Senate Finance Committee substitute that replaces that idea entirely. It adds a new part to Georgia's homestead option sales tax law (O.C.G.A. Article 2A of Chapter 8, Title 48) creating an 'Alternative Homestead Option Sales and Use Tax Act of 2026.' The bill lets a county's governing authority ask voters, through a referendum held alongside a required local homestead exemption vote, whether to impose a 1 percent local sales and use tax. If approved, the money would fund road and capital projects and offset an equivalent homestead exemption on property taxes for county operations. Existing municipalities and newly incorporated ones would split a share of the money based on population. The tax and its paired exemption would automatically end after ten years unless renewed. Counties would have to publicly report annual collections and their effect on home values.

• Creates a new optional 1 percent local sales and use tax that counties can put to voters, tied to a matching homestead exemption on county property taxes.
• Requires the sales tax and the homestead exemption referendum to be approved together or neither takes effect.
• Directs a portion of the tax proceeds (capped by a 'capital factor' county officials set, not exceeding 0.250) toward capital outlay projects like road improvements.
• Directs the remaining proceeds toward funding a homestead exemption that offsets lost property tax revenue, using a formula in the bill (a 'homestead factor').
• Splits money between the county and existing or newly incorporated municipalities within it based on population from the most recent U.S. Census.
• Sets the tax and paired exemption to automatically expire ten years after collection begins, though a new vote could restart the process.

County governments and their finance offices, homeowners who claim a homestead exemption on their primary residence, cities and towns located within counties that adopt the tax, retailers and dealers who collect sales tax, and the Georgia Department of Revenue, which would administer and collect the new tax statewide.

If a county adopts this tax after a successful referendum, residents there would pay an extra 1 percent sales tax on most purchases while getting a larger break on their property tax bill for their primary home. The exact tradeoff would depend on local sales activity and each county's capital versus homestead funding choices.

• Section 48-8-109.25 creates the short title 'Alternative Homestead Option Sales and Use Tax Act of 2026' and defines terms like 'homestead,' 'existing municipality,' and 'qualified municipality.'
• Section 48-8-109.26 authorizes a 1 percent county sales and use tax (capped at $3.00 per gallon for motor fuel) contingent on a paired local Act creating a homestead exemption, requires a joint referendum, and sets a mandatory ballot notice warning that neither measure takes effect unless both pass.
• The tax and its exemption terminate automatically ten years after first collection unless voters approve a new one under the same process.
• Section 48-8-109.27 sets how proceeds are split: 1 percent goes to the state for administration costs, and the rest is divided between capital outlay projects (limited to roads for county-run projects) and funding the homestead exemption, using formulas based on a 'capital factor' and 'homestead factor.'
• Existing and newly incorporated municipalities receive shares of capital outlay proceeds based on population under detailed formulas in subsection (c).
• Any leftover funds after capital and homestead allocations must be used to roll back the county's operating millage rate or fund constitutionally authorized county services.
• Section 48-8-109.28 sets rules for crediting taxes paid in other jurisdictions, exempting goods delivered outside the district, and exempting materials under construction contracts bid before the tax was approved.
• Counties must publish an annual report on tax collections and homestead value reductions and send it to their General Assembly delegation.

1. 2026-03-31Senate Tabled (Senate)
2. 2026-03-10Senate Committee Favorably Reported By Substitute (Senate)
3. 2026-01-12Senate Recommitted (Senate)
4. 2026-01-12Senate Taken from Table (Senate)
5. 2025-04-02Senate Tabled (Senate)
6. 2025-04-02Senate Engrossed (Senate)
7. 2025-03-28Senate Read Second Time (Senate)
8. 2025-03-28Senate Committee Favorably Reported By Substitute (Senate)

• Ron Stephens (R, HD-164)Primary sponsor
• Tim Fleming (R, HD-114)
• John Albers (R, SD-056)

1. PassedHouse voteFebruary 28, 2025

   164 yea, 2 nay (5 not voting, 9 absent)

   Passage: House Vote #117

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 voteMarch 31, 2026

   39 yea, 10 nay (2 not voting, 3 absent)

   Motion To Table Remaining Legislation On The Rules Calendar: Senate Vote #912

• property taxes
• sales tax
• homestead exemption
• local referendums
• county government funding