--- title: SB 26. State Income Taxes; with regard to military retirement income, to determine and apply a cost-of-living adjustment to the amount of allowable retirement pay; require the state revenue commissioner collection: bills id: 2025-2026/sb26 cite_as: SB 26, 2025-2026 Regular Session (Ga.) canonical_url: https://georgiacommons.org/bills/2025-2026/sb26 md_url: https://georgiacommons.org/bills/2025-2026/sb26.md text_url: https://georgiacommons.org/bills/2025-2026/sb26/text source_url: https://www.legis.ga.gov/legislation/69487 date: 2026-01-12 status: introduced corpus_version: bills-2026-08-28 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/sb25.md next: https://georgiacommons.org/bills/2025-2026/sb27.md index: https://georgiacommons.org/bills/index.md omitted: votes and history omitted_chars: 240 omitted_url: https://georgiacommons.org/bills/2025-2026/sb26.md?full=1 bill_number: SB 26 session: 2025-2026 Regular Session session_slug: 2025-2026 chamber: Senate bill_type: bill status_date: 2025-01-17 last_action: Senate Recommitted sponsors: - Michael Rhett - Ed Harbison - Chuck Payne - Timothy Bearden - Billy Hickman - Kenya Wicks - Harold Jones - Nabilah Islam Parkes - Shawn Still - Matt Brass - Jason Anavitarte - Emanuel Jones text_version: Introduced has_text: true legiscan_url: https://legiscan.com/GA/bill/SB26/2025 upstream_id: 1929553 summaries_model: claude-sonnet-5 topic_tags: - military retirement - state income taxes - veterans benefits - tax exemptions - cost-of-living adjustment --- # SB 26. State Income Taxes; with regard to military retirement income, to determine and apply a cost-of-living adjustment to the amount of allowable retirement pay; require the state revenue commissioner ## Text 25 LC 46 0957 Senate Bill 26 By: Senators Rhett of the 33rd, Harbison of the 15th, Payne of the 54th, Bearden of the 30th, Hickman of the 4th and others A BILL TO BE ENTITLED AN ACT To amend Article 2 of Chapter 7 of Title 48 of the Official Cod e of Georgia Annotated,1 relating to imposition, rate, computation, exemptions, and cred its relative to state income2 taxes, so as to require the state revenue commissioner, with re gard to military retirement3 income, to determine and apply a cost-of-living adjustment to t he amount of allowable4 retirement pay excluded from Georgia taxable net income; to pro vide for rules and5 regulations; to provide for related matters; to provide for an effective date and applicability;6 to repeal conflicting laws; and for other purposes.7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:8 SECTION 1.9 Article 2 of Chapter 7 of Title 48 of the Official Code of Geor gia Annotated, relating to10 imposition, rate, computation, exemptions, and credits relative to state income taxes, is11 amended by adding a new paragraph to subsection (a) of Code Sec tion 48-7-27 to read as12 follows:13 "(5.2) The commissioner shall by regulation establish and maintain rules concerning the14 determination and application of cost-of-living adjustments to the amount of allowable15 retirement pay excluded from Georgia taxable net income with regard to income received16 S. B. 26 - 1 - 25 LC 46 0957 as retirement benefits for military service. Such rules shall include the determination and17 use of an appropriate cost-of-living index which reflects the e ffects of inflation and18 deflation on persons receiving retirement income in this state for military service in the19 armed forces of the United States or the reserve components thereof. In the regulation20 of such rules, the commissioner may use the Consumer Price Inde x as reported by the21 Bureau of Labor Statistics of the United States Department of Labor as such index is used22 to determine adjustments to social security payments or any oth er similar index23 established by the federal government if the commissioner determines that such federal24 index reflects the effects of inflation and deflation on person s receiving retirement25 income in this state for military service in the armed forces o f the United States or the26 reserve components thereof. Any such cost-of-living adjustment determined appropriate27 by the commissioner shall result in a proportional adjustment to the amount of military28 retirement income excluded from Georgia taxable net income."29 SECTION 2.30 This Act shall become effective on July 1, 2025, and shall be applicable to all taxable years31 beginning on or after January 1, 2026.32 SECTION 3.33 All laws and parts of laws in conflict with this Act are repealed.34 S. B. 26 - 2 - ## 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 Senate bill would require the state revenue commissioner to adjust the tax exclusion for military retirement pay each year to keep pace with inflation, starting with the 2026 tax year. ### Plain-language summary Georgia currently allows military retirees to exclude a set amount of their retirement pay from state taxable income, but that amount does not automatically move with inflation. This bill changes that by directing the state revenue commissioner to write rules that apply a cost-of-living adjustment to the excluded amount each year. The commissioner would choose an appropriate inflation index, such as the Consumer Price Index used for Social Security adjustments, or another federal index if it better reflects conditions for military retirees in Georgia. Whatever adjustment is determined would proportionally raise or lower the amount of military retirement income shielded from state income tax. The change would take effect July 1, 2025, and apply to tax years beginning on or after January 1, 2026. ### What it does - Requires the state revenue commissioner to create regulations applying a cost-of-living adjustment to the military retirement income tax exclusion. - Directs the commissioner to select a cost-of-living index, such as the federal Consumer Price Index used for Social Security, to measure inflation and deflation effects. - Ties the size of the tax exclusion adjustment directly to changes in the chosen index on a proportional basis. - Sets the law to take effect July 1, 2025, applying to tax years starting on or after January 1, 2026. ### Who it affects Military retirees living in Georgia who currently exclude part of their retirement pay from state income tax, and the Georgia Department of Revenue, which must write and maintain the new cost-of-living adjustment rules. ### Why it matters Without this change, the dollar amount of retirement pay excluded from state taxes could lose value over time as prices rise. This bill would let that exclusion grow (or shrink) with inflation, changing how much tax military retirees owe Georgia each year. ### Key provisions - Section 1 amends O.C.G.A. ยง 48-7-27(a) by adding paragraph (5.2), requiring the commissioner to establish rules for cost-of-living adjustments to the military retirement pay tax exclusion. - Section 1 specifies the commissioner may use the Consumer Price Index as reported by the U.S. Bureau of Labor Statistics, the same index used for Social Security adjustments, or another federal index if more appropriate. - Section 1 states that any adjustment must result in a proportional change to the amount of military retirement income excluded from Georgia taxable net income. - Section 2 sets the effective date as July 1, 2025, applicable to taxable years beginning on or after January 1, 2026. - Section 3 repeals any conflicting laws. ## Status - Status: Introduced (2025-01-17) - Last action: Senate Recommitted (2026-01-12) - Sponsors: Michael Rhett, Ed Harbison, Chuck Payne, Timothy Bearden, Billy Hickman, Kenya Wicks, Harold Jones, Nabilah Islam Parkes, Shawn Still, Matt Brass, Jason Anavitarte, Emanuel Jones - Official page: https://www.legis.ga.gov/legislation/69487 > The history, votes, and amendments (240 characters) are at https://georgiacommons.org/bills/2025-2026/sb26.md?full=1