SB530: SB530 Georgia Property Tax Fairness Fund; create

26 LC 59 0341 Senate Bill 530 By: Senators Parkes of the 7th, Jones II of the 22nd, Anderson of the 43rd, Davenport of the 17th, Kemp of the 38th and others A BILL TO BE ENTITLED AN ACT To amend Chapters 7 and 8 of Title 48 and Chapter 8 of Title 33 of the Official Code of1 Georgia Annotated, relating to income taxes, sales and use taxes, and fees and taxes relative2 to insurance, respectively, so as to create the Georgia Property Tax Fairness Fund; to require3 that high-technology data center and insurance premium tax coll ections be deposited into4 such fund; to provide for the issuance of credits from such fun d against the income tax5 liability of taxpayers residing in qualifying homes; to provide for the repeal of sales and use6 tax exemptions for high-technology data centers and insurance c ompanies; to provide7 definitions; to provide constitutional authorization; to provide for the calculation, application,8 and limitations on tax credits; to provide for rules and regula tions; to provide for9 recoverability; to provide for the repeal of insurance premium tax credits and abatements;10 to provide for conforming changes; to provide for a contingent effective date and automatic11 repeal; to provide for related matters; to repeal conflicting laws; and for other purposes.12 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:13 S. B. 530 - 1 - 26 LC 59 0341 PART I14 SECTION 1-1.15 Chapter 7 of Title 48 of the Official Code of Georgia Annotated, relating to income taxes,16 is amended by adding a new Code section to read as follows:17 "48-7-43.18 (a) As used in this Code section, the term:19 (1) 'Fair market value of property' shall have the same meanin g as set forth in Code20 Section 48-5-2.21 (2) 'Fiscal authority' means the individual authorized to coll ect ad valorem taxes for a22 county or municipality which levies ad valorem taxes.23 (3) 'Georgia Property Tax Fairness Fund' or 'fund' means the s tate treasury fund24 established in this Code section.25 (4) 'High-technology data center' means a facility, campus of facilities, or array of26 interconnected facilities which house working servers and that are developed to cool,27 secure, and connect data associated with applications and services.28 (5) 'Home' means a single-family residence or a multifamily re sidence, including all29 improvements thereon.30 (6) 'Insurance premium tax collections' means any collections from the tax levied under31 the provisions of Code Section 33-8-4.32 (7) 'Qualifying home' means a home in which there resides:33 (A) A taxpayer who, in the prior fiscal year, received either the standard deduction34 provided under division (a)(1)(B)(i) of Code Section 48-7-27 wi th a federal adjusted35 gross income below $120,000.00 or the standard deduction provid ed under36 division (a)(1)(B)(ii) of Code Section 48-7-27 with a federal a djusted gross income37 below $60,000.00 and made aggregate ad valorem property tax pay ments and38 S. B. 530 - 2 - 26 LC 59 0341 homeowners' insurance premium payments for the prior fiscal year exceeding 5 percent39 of such taxpayer's federal adjusted gross income for the prior fiscal year; or40 (B) A tenant whose rent for the prior fiscal year exceeds 33 p ercent of such tenant's41 federal adjusted gross income for the prior fiscal year.42 (8) 'Rent' means the aggregate annual amount paid by a tenant to an owner of real estate43 for the right to possess such real estate.44 (9) 'Tenant' means a person who accepts the right to possess real estate belonging to an45 owner of real estate for a fixed time or at the will of the gra ntor where there exists a46 contract, express or implied, providing for payment from such person to such owner for47 the right to possession of such real estate.48 (b) This Code section is enacted pursuant to Article III, Section IX, Paragraph VI(s) of the49 Constitution to provide a mechanism for the state to use increased insurance premium tax50 collections to reduce the burden upon taxpayers.51 (c) The state treasurer shall establish a separate fund in the state treasury that shall be52 known as the Georgia Property Tax Fairness Fund and shall consist of insurance premium53 tax collections and high-technology data center sales and use tax collections, appropriations54 by the General Assembly, and moneys from any other source dedic ated to the fund for55 resident tax relief. Moneys held in the fund shall be expended by the department solely as56 provided in this Code section.57 (d) On or before December 31 of each taxable year, the departm ent shall issue a credit58 against the income tax liability of each taxpayer residing in a qualifying home in an amount59 equal to the amount such liability exceeded:60 (1) For a taxpayer residing in a qualifying home under subpara graph (a)(7)(A) of this61 Code section, 5 percent of such taxpayer's federal adjusted gro ss income for the prior62 year; or63 S. B. 530 - 3 - 26 LC 59 0341 (2) For a taxpayer residing in a qualifying home under subpara graph (a)(7)(B) of this64 Code section, 33 percent of such tenant's federal adjusted gross income for the prior fiscal65 year.66 (e) Credit amounts computed under subsection (d) of this Code section shall be applied to67 reduce the otherwise applicable income tax liability of all taxpayers residing in qualifying68 homes on a dollar-for-dollar basis. All taxpayers residing in qualifying homes in this state69 shall receive an identical reduction in such taxpayers' otherwi se applicable income tax70 liability.71 (f)(1) Notwithstanding the provisions of subsection (d) of this Code section, any sales72 and use tax collected from a high-technology data center by a f iscal authority shall be73 applied to reduce the ad valorem tax bill on homesteads in the taxing jurisdiction within74 which the high-technology data center is located before such proceeds may be used for75 any other purpose.76 (2) Each fiscal authority collecting a tax under the provision s of this subsection shall77 provide an adjustment credit on the ad valorem tax bill of each qualifying home within78 the taxing jurisdiction of the high-technology data center from w h i c h t h e t a x w a s79 collected up to the taxpayer's ad valorem property tax liabilit y on the homestead;80 provided, however, that the credit granted shall not in any case exceed $2,500.00 and that81 the fair market value of property qualifying for the adjustment credit provided under this82 subsection may not exceed $500,000.00.83 (3) Credit amounts computed under paragraph (1) of this subsection shall be applied to84 reduce the otherwise applicable ad valorem tax liability for all qualifying homes in the85 taxing jurisdiction of the high-technology data center on a dol lar-for-dollar basis. All86 qualifying homes within a taxing jurisdiction shall receive an identical reduction in such87 homes' otherwise applicable ad valorem tax liability.88 S. B. 530 - 4 - 26 LC 59 0341 (g) The total amount of the tax credits allowed pursuant to this Code section for a taxable89 year may exceed the taxpayer's income tax liability. Such tax credits allowed in excess of90 a taxpayer's income tax liability shall be refundable to such taxpayer.91 (h) The commissioner shall promulgate forms and adopt rules and regulations necessary92 for the administration of this Code section.93 (i) Any credit under this Code section which is erroneously or illegally granted shall be94 recoverable by the fiscal authority granting such credit in the same manner as any other95 delinquent tax."96 PART II97 SECTION 2-1.98 Chapter 8 of Title 48 of the Official Code of Georgia Annotated , relating to sales and use99 taxes, is amended by repealing and reenacting paragraph (68.1) of Code Section 48-8-3,100 relating to exemptions relative to state sales and use taxes, to read as follows:101 "(68.1) After the effective date of this Act, no new certificates of exemption from sales102 and use tax to a high-technology data center or a high-technology data center customer103 shall be issued pursuant to the former provisions of this paragraph as they existed prior104 to the effective date of this Act; provided, however, that any certificate of exemption105 issued prior to the effective date of this Act shall continue t o be governed by the106 provisions of this paragraph as it existed immediately prior to the effective date of this107 Act;"108 SECTION 2-2.109 Chapter 8 of Title 33 of the Official Code of Georgia Annotated, relating to fees and taxes110 relative to insurance, is amended by repealing Code Section 33- 8-4.1, relating to state111 insurance premiums tax credits for insurance companies located in certain counties112 S. B. 530 - 5 - 26 LC 59 0341 designated as less developed areas and authority of commissioner of community affairs and113 Commissioner.114 SECTION 2-3.115 Said chapter is further amended by repealing Code Section 33-8-4.2, relating to assignment,116 carryover, and liability regarding tax credits.117 SECTION 2-4.118 Said chapter is further amended by repealing and reserving Code Section 33-8-5, relating to119 abatement or reduction of tax on insurance premiums.120 SECTION 2-5.121 Said chapter is further amended by repealing subsections (e) and (f) of Code Section 33-8-8,122 relating to preemption of taxation of insurance companies by state, exceptions, and collection123 of license fees by municipal corporations.124 SECTION 2-6.125 Said chapter is further amended by revising paragraph (1) of su bsection (b) of Code126 Section 33-8-8.1, relating to county and municipal corporation taxes on life insurance127 companies, as follows:128 "(1) There is imposed a county tax for county purposes on each life insurance company129 doing business within the state, which tax shall be based solel y upon gross direct130 premiums, as defined in Code Section 33-8-4, which are received during the preceding131 calendar year from policies insuring persons residing within the unincorporated area of132 the counties pursuant to the provisions of this Code section. The rate of such tax shall133 be 1 percent of such premiums, except that such tax shall not a pply to the gross direct134 premiums of an insurance company which qualifies, pursuant to Code Section 33-8-5, for135 S. B. 530 - 6 - 26 LC 59 0341 the reduction to one-half of 1 percent of the state tax imposed by Code Section 33-8-4.136 The tax imposed by this Code section shall not apply to annuity considerations; and"137 PART III138 SECTION 3-1.139 This Act shall become effective on January 1, 2027, only if an amendment to the140 Constitution of Georgia authorizing the General Assembly to provide by general law for the141 establishment and maintenance of the Georgia Property Tax Fairness Fund is ratified by the142 voters at the November, 2026, state-wide general election. If such an amendment is not so143 ratified, then this Act shall not become effective and shall stand repealed on January 1, 2027.144 SECTION 3-2.145 All laws and parts of laws in conflict with this Act are repealed.146 S. B. 530 - 7 -