HB1214: HB1214 Sales and use tax; new special purpose local option sales tax dedicated to certain healthcare purposes; provide

Georgia already allows several kinds of local special purpose local option sales taxes (SPLOST). This bill adds a new one aimed specifically at healthcare. A county or municipality could hold a referendum asking voters to approve a 1 percent sales and use tax, lasting up to five years, with proceeds dedicated to what the bill calls 'healthcare enhancement purposes': hospital capital projects, covering bad debt, indigent care, and other financial shortfalls tied to providing healthcare services. The tax would be collected by the state revenue commissioner the same way other local sales taxes are collected, with 1 percent of proceeds kept by the state to cover administration costs. Local governments would have to keep the money in a separate account, report spending in their annual audits, and could not use the funds to replace existing healthcare funding. If the state finds the money misused, it can withhold the tax proceeds until the problem is fixed. The change would take effect immediately once signed by the Governor.

• Creates a new local option sales tax of 1 percent that counties and cities can put to voters through a referendum, dedicated to hospital and healthcare funding.
• Limits use of the tax proceeds to 'healthcare enhancement purposes,' defined as hospital capital projects, bad debt, indigent care, and related shortfalls.
• Caps how long the tax can run at five years per approval, though it can be reimposed through another referendum before the current tax expires.
• Requires local governments to keep the tax money in a separate account, report all spending in their annual audit, and bars using it to replace existing healthcare funding.
• Gives the state revenue commissioner power to withhold the tax proceeds from a county or city that misuses the funds until a corrective plan is approved, or hold the money in trust after 180 days if none is approved.
• Adds this new tax to the list counted toward the existing 1 percent aggregate cap on certain local sales taxes under O.C.G.A. § 48-8-6.

Georgia county and municipal governments that choose to seek voter approval for the tax, local voters who would decide the referendum, nonprofit and hospital-authority-run hospitals that would receive the funding, the state revenue commissioner's office, which administers and can withhold the tax, and local auditors who must report on its use.

Communities struggling to keep hospitals financially afloat, especially those absorbing unpaid medical bills and indigent care costs, would gain a dedicated local funding tool subject to voter approval. Shoppers in participating areas would pay a bit more sales tax, and local governments would face new accounting and reporting duties tied to the money.

• Section 1 amends O.C.G.A. § 48-8-6 to include this new tax within the existing 1 percent aggregate cap on certain local sales and use taxes.
• Section 2 adds new Part 4 to Article 3 of Chapter 8, Title 48, creating 159 special tax districts, one per county, as the geographic basis for the tax.
• New Code Section 48-8-172 sets the tax rate at 1 percent, applying it to the same items taxed under the general sales tax law, including motor fuel, food, and alcoholic beverages.
• New Code Section 48-8-173 requires a referendum with a specific ballot question and limits the tax to a maximum of five years.
• New Code Section 48-8-177 directs that 1 percent of collections go to the state for administration costs, with the remainder going to the local government.
• New Code Section 48-8-183 restricts spending strictly to healthcare enhancement purposes, requires a separate account, and bars supplanting existing healthcare funding.
• New Code Section 48-8-184 lets the commissioner withhold tax proceeds if a local government misuses the funds, and place the money in state trust after 180 days without a corrective plan.
• Section 3 makes the Act effective immediately upon the Governor's signature or upon becoming law without signature.

1. 2026-02-09House Second Readers (House)
2. 2026-02-06House First Readers (House)
3. 2026-02-05House Hopper (House)

• Angie O'Steen (R, HD-169)Primary sponsor
• James Burchett (R, HD-176)
• Noel Williams (R, HD-148)
• Trey Kelley (R, HD-016)
• John Corbett (R, HD-174)
• William Werkheiser (R, HD-157)

• sales tax
• hospital funding
• healthcare
• local referendums
• county and city government