SB 5: City of Toccoa; ad valorem taxes; homestead property determined annually for the special district based upon the proceeds of a new Local Homestead Option Sales Tax (LHOST); provide homestead exemption

This bill applies only to the City of Toccoa and the special tax district that covers all of Stephens County. It would exempt homeowners in that district from City of Toccoa property taxes (called ad valorem taxes) in an amount equal to their home's assessed value, calculated each year based on how much money a new Local Homestead Option Sales Tax (LHOST) brings in within the district. In effect, sales tax revenue would replace property tax collections on homesteads, up to the exempted amount. Homeowners would need to apply once with the local tax official, and the exemption would then renew automatically each year as long as they still qualify. The exemption would stack on top of any other homestead exemptions they already receive, but would not apply to county or school taxes, only city taxes. Because this changes Georgia's constitution, it needs a two-thirds vote in the General Assembly, then approval by Toccoa voters in a November 2026 referendum. If approved, it would run from January 1, 2027 through the end of 2039; if rejected, the whole Act repeals automatically.

• Creates a new homestead exemption from City of Toccoa property taxes equal to the assessed value of a homestead, funded by proceeds from a new 1 percent local sales tax (LHOST) collected in the Stephens County special district.
• Requires homeowners to file an application with the local tax official, but automatically carries over the exemption for people who already had a similar homestead exemption the prior year.
• Makes the exemption automatically renew each year without a new application, as long as the homeowner still lives there and remains eligible.
• Limits the exemption to only City of Toccoa taxes, only to property inside the special district, and stacks it on top of (not instead of) other existing homestead exemptions.
• Sets the exemption to run from January 1, 2027 through December 31, 2039, contingent on voter approval in a November 2026 referendum.
• Requires a two-thirds majority vote in both the Senate and House because it involves a constitutional tax provision, and automatically repeals the whole Act if voters reject it.

Homeowners who live in the City of Toccoa within the Stephens County special tax district, the Toccoa city government (which loses some property tax revenue but gains sales tax revenue), the local tax official who processes exemption applications, and the county election superintendent who must run the referendum.

If voters approve it, eligible Toccoa homeowners would see their city property tax bill reduced or eliminated on their primary residence, with the lost revenue offset instead by a new penny-per-dollar sales tax collected across Stephens County, shifting how city services get funded.

• Section 1 defines key terms and grants the exemption, tying its dollar amount each year to the net proceeds collected from the new LHOST sales tax in the special district.
• Section 1(c) requires an application to the local tax official but exempts people who already had a similar homestead exemption approved the prior year.
• Section 1(e) limits the exemption to City of Toccoa taxes only, restricts it to property within the special district, and makes it additional to other homestead exemptions, running from January 1 after voter approval through December 31, 2039.
• Section 3 requires a two-thirds majority vote in both the Georgia Senate and House of Representatives, as mandated by the state constitution.
• Section 4 schedules a referendum for the Tuesday after the first Monday in November 2026, sets the ballot language, and provides that the Act automatically repeals 365 days after the election if voters reject it or if no election is held.
• Section 4(c) lets any Stephens County elector within the district seek a court order (writ of mandamus) forcing the election superintendent to hold the vote if it is not called properly.
• Section 5 makes the rest of the Act effective upon the Governor's signature or its becoming law without signature, except for the referendum-dependent Section 1.

1. 2026-06-23Senate Reconsidered Lost (Senate)
2. 2026-06-23Senate Taken from Table (Senate)
3. 2026-06-22Senate Tabled (Senate)
4. 2026-06-22Senate Reconsidered (Senate)
5. 2026-06-22Senate Notice to Reconsider (Senate)
6. 2026-06-22Senate Local Lost (Senate)
7. 2026-06-22Senate Committee Favorably Reported (Senate)
8. 2026-06-20Senate Read and Referred (Senate)

• Bo Hatchett (R, SD-050)Primary sponsor

1. PassedSenate voteJune 22, 2026

   31 yea, 20 nay (1 not voting, 3 absent)

   Local Consent Calendar: Senate Vote #20

2. PassedSenate voteJune 22, 2026

   28 yea, 21 nay (3 not voting, 3 absent)

   Motion To Reconsider Local Consent Calendar: Senate Vote #21

3. PassedSenate voteJune 23, 2026

   32 yea, 19 nay (1 not voting, 3 absent)

   Passage: Senate Vote #25

• property taxes
• homestead exemption
• local sales tax
• Toccoa
• Stephens County referendum