HB1132: HB1132 Sales and use tax; exempt materials used in construction, renovation, and rehabilitation of affordable housing by purely public charities

Currently, purely public charities pay Georgia's state sales and use tax on materials they buy to build or renovate housing. This bill amends Georgia's sales tax exemption law (O.C.G.A. § 48-8-3) to exempt materials used by a tax-exempt charity to construct, renovate, or rehabilitate affordable housing, but only if strict conditions are met. The exemption applies only to materials that stay permanently on the property, and only when the charity is a 501(c)(3) nonprofit building single-family homes financed through interest-free loans to first-time homebuyers. Buyers must earn no more than 80 percent of the local median income, and the homes must be their primary residence under a 30-year resale covenant that keeps future buyers under the same income limit. The change would take effect January 1, 2027, and the earlier version's automatic repeal date has been removed, so the exemption would not expire on its own.

• Exempts building materials bought by a qualifying charity for constructing, renovating, or rehabilitating affordable housing from Georgia's state sales and use tax.
• Limits the exemption to materials that permanently remain on the property, not items removed or resold.
• Requires the charity to be a federally tax-exempt 501(c)(3) organization and to finance the homes with interest-free loans to first-time buyers.
• Requires buyers to have income at or below 80 percent of the area median income set annually by the U.S. Department of Housing and Urban Development.
• Requires a 30-year resale covenant limiting future buyers to the same income cap and requiring the home be a primary residence.
• Removes the prior December 31, 2031 automatic repeal date for this exemption, leaving it in place indefinitely, and sets the law's effective date as January 1, 2027.

Purely public charities that build or renovate affordable housing, low-income first-time homebuyers who purchase homes financed by these charities, and the Georgia Department of Revenue, which administers the state sales tax exemption.

Charities building affordable housing would pay less for construction materials, potentially lowering costs for building interest-free, income-restricted homes. Because the exemption no longer has an automatic expiration date, this tax break for qualifying nonprofit affordable housing projects would continue without needing renewal.

• Section 1 revises paragraph (103) of O.C.G.A. § 48-8-3 to exempt materials purchased by a purely public charity for affordable housing construction, renovation, or rehabilitation from state sales tax.
• The exemption requires the charity to hold 501(c)(3) status under the federal Internal Revenue Code.
• The property must be used exclusively to build single-family homes financed through interest-free loans to first-time buyers.
• Buyers must have household income at or below 80 percent of the county median income as set by HUD at time of purchase.
• Homes must be occupied as a primary residence and carry a 30-year resale covenant capping future buyer income at the same 80 percent threshold.
• The bill deletes the prior automatic repeal date of December 31, 2031, replacing it with 'Reserved,' meaning the exemption no longer expires automatically.
• Section 2 sets the effective date of the Act as January 1, 2027.
• Section 3 repeals all conflicting laws.

1. 2026-03-31Senate Tabled (Senate)
2. 2026-03-31Senate Engrossed (Senate)
3. 2026-03-27Senate Read Second Time (Senate)
4. 2026-03-27Senate Committee Favorably Reported (Senate)
5. 2026-03-09Senate Read and Referred (Senate)
6. 2026-03-06House Passed/Adopted By Substitute (House)
7. 2026-03-06House Third Readers (House)
8. 2026-03-06House Committee Favorably Reported By Substitute (House)

• Lehman Franklin (R, HD-160)Primary sponsor
• Ron Stephens (R, HD-164)
• Stacey Evans (D, HD-057)
• Todd Jones (R, HD-025)
• Clint Crowe (R, HD-118)
• Spencer Frye (D, HD-122)
• Jason T. Dickerson (R, SD-021)

1. PassedHouse voteMarch 6, 2026

   163 yea, 3 nay (2 not voting, 9 absent)

   Passage: House Vote #682

2. PassedSenate voteMarch 31, 2026

   33 yea, 15 nay (2 not voting, 4 absent)

   Motion To Engross: Hb 52, Hb 248, Hb 963, Hb 964, Hb 1001, Hb 1077, Hb 1116, Hb 1129, Hb 1132, Hb 1209: Senate Vote #876

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

• sales tax exemption
• affordable housing
• nonprofit charities
• first-time homebuyers
• property taxes