HB1085: HB1085 Income tax; various tax credits for forestry manufacturing facilities; provide

Georgia already gives income tax credits to manufacturers that create jobs or buy equipment in less-developed counties, under a tiered system (O.C.G.A. § 48-7-40 and related sections). This bill adds a new category, 'forestry manufacturing,' covering wood product makers, paper mills, and businesses that use wood fiber or forest byproducts as a main raw material. These companies would qualify for job-creation credits and investment credits at higher rates than other manufacturers, with the size of the credit depending on the county's tier (poorer, more rural tier 3 and 4 counties get the biggest breaks). The credits apply to taxable years from January 1, 2026 through December 31, 2030, and forestry manufacturers could transfer or sell unused credits to other Georgia taxpayers under specific reporting rules. Total credits are capped at $250 million per year statewide, with a separate $100 million cap for tier 3 and 4 counties. Any future renewal of these credits requires a two-thirds vote of both chambers. The law would take effect July 1, 2026, applying to tax years starting on or after January 1, 2026.

• Creates a new legal definition of 'forestry manufacturing' covering wood, paper, and forest-byproduct based manufacturers for purposes of Georgia's job tax credit program.
• Gives forestry manufacturers higher investment tax credit rates (up to 15 percent in tier 1 counties, down to 3 percent in tier 3/4 counties) than standard manufacturers receive.
• Allows forestry manufacturers to transfer or sell unused tax credits earned between 2026 and 2030 to other Georgia taxpayers, subject to a 30-day notification requirement.
• Caps total forestry manufacturing tax credits at $250 million per year statewide, with a $100 million per year sub-cap for tier 3 and tier 4 counties.
• Requires the Department of Revenue to file an annual report on transferred credits with House Ways and Means and Senate Finance committees.
• Requires any future renewal or extension of these credits to pass by a two-thirds vote in both the House and Senate.

Wood product, paper, and other forestry-related manufacturers operating or expanding in Georgia; the Georgia Department of Revenue, which administers and reports on the credits; and other Georgia taxpayers who might purchase transferred credits from these manufacturers.

Forestry manufacturers that add jobs or invest in equipment in Georgia, especially in poorer rural counties, could see significantly larger state tax breaks than other industries, potentially encouraging mill or plant expansions while reducing state tax revenue up to $250 million a year through 2030.

• Section 2 amends O.C.G.A. § 48-7-40 to add 'forestry manufacturing' as an eligible business type and creates a $500 per new job credit for eligible employers, including forestry manufacturers, tied to county tier thresholds.
• Sections 3-6 add the same forestry manufacturing definition and enhanced investment credit rates to O.C.G.A. §§ 48-7-40.1 through 48-7-40.4, covering tier 1 through tier 4 counties, with rates ranging from 3 percent to 15 percent of qualified investment property.
• Each amended section allows forestry manufacturers to transfer or sell unused credits earned from 2026-2030 to other Georgia taxpayers, with a 30-day written notice to the Department of Revenue.
• Section 7 creates new Code Section 48-7-40.4A, capping total forestry manufacturing credits at $250 million per year and $100 million per year specifically for tier 3 and 4 counties.
• Section 7 also requires a two-thirds vote of both chambers of the General Assembly to renew or extend these credits in the future.
• Section 8 sets the effective date as July 1, 2026, applying to tax years beginning on or after January 1, 2026.
• The transfer and reporting provisions in each amended section are set to automatically repeal on December 31, 2030, though credits earned before then can still be transferred afterward.

1. 2026-03-27House Agreed Senate Amend or Sub As Amended (House)
2. 2026-03-23Senate Passed/Adopted By Substitute (Senate)
3. 2026-03-23Senate Third Read (Senate)
4. 2026-03-23Senate Engrossed (Senate)
5. 2026-03-20Senate Read Second Time (Senate)
6. 2026-03-19Senate Committee Favorably Reported By Substitute (Senate)
7. 2026-02-26Senate Read and Referred (Senate)
8. 2026-02-25House Passed/Adopted By Substitute (House)

• Jesse Petrea (R, HD-166)Primary sponsor
• Jon Burns (R, HD-159)
• Charles Cannon (R, HD-172)
• James Burchett (R, HD-176)
• Debbie Buckner (D, HD-137)
• Noel Williams (R, HD-148)
• Larry Walker (R, SD-020)

1. PassedHouse voteFebruary 25, 2026

   161 yea, 5 nay (3 not voting, 8 absent)

   Passage: House Vote #565

2. PassedSenate voteMarch 23, 2026

   50 yea, 0 nay (3 not voting, 1 absent)

   Passage By Substitute: Senate Vote #787

3. PassedHouse voteMarch 27, 2026

   155 yea, 4 nay (4 not voting, 13 absent)

   Agree To Senate Sub As Am: House Vote #779

• tax credits
• forestry industry
• manufacturing incentives
• economic development
• state tax policy