HB 370: Ad valorem tax; school districts; state-wide base year homestead exemption; provisions

Although HB 370 was originally filed as a property tax bill, the Senate Finance Committee substitute rewrites it to create a new Georgia income tax credit. Starting with tax years beginning on or after January 1, 2026, employers with fewer than 50 employees that contribute at least $200 a month per employee to an individual coverage health reimbursement arrangement (a way employers help workers buy their own health insurance) can claim a state income tax credit. The credit starts at up to $600 per covered employee for the first three years, drops to $400 in year four and $200 in year five, and no employer can claim it for more than five years total. Statewide, the credit is capped at $5 million per year, and employers must apply for preapproval by October 1 each year to claim it. The tax credit provision is set to expire on December 31, 2028. The bill would take effect July 1, 2025.

• Creates a new Georgia income tax credit for employers with fewer than 50 employees that contribute to individual coverage health reimbursement arrangements (ICHRAs) for workers.
• Requires employers to contribute at least $200 per month per covered employee and to match or exceed prior-year health benefit contributions to qualify.
• Sets a declining credit schedule: up to $600 per employee in years one through three, $400 in year four, and $200 in year five, capped at five years per employer.
• Caps total statewide credits claimed under this program at $5 million per year and requires employers to apply for preapproval by October 1 each year.
• Allows pass-through entities like partnerships to pass the credit to their members, shareholders, or partners based on ownership share.
• Automatically repeals the tax credit provision on December 31, 2028.

Small Georgia employers with fewer than 50 employees who offer individual coverage health reimbursement arrangements, their covered employees, pass-through business owners such as partners and shareholders, and the Georgia Department of Revenue, which must review applications and issue preapproval certificates.

Small businesses that help workers buy individual health insurance through ICHRAs could get meaningful state tax relief, potentially encouraging more employers to offer this benefit. Because the credit is capped statewide at $5 million per year and requires preapproval, not every applying employer is guaranteed to receive it.

• Section 1 rewrites O.C.G.A. § 48-7-40.10, previously reserved (blank), to define 'covered employee,' 'individual coverage health reimbursement arrangement,' and 'qualified taxpayer.'
• Subsection (b) sets eligibility rules, including a $200 per month minimum employer contribution per covered employee, for tax years starting on or after January 1, 2026.
• Subsection (c) creates a declining credit cap: $600 per employee in years one through three, $400 in year four, and $200 in year five, with a five-year maximum per taxpayer.
• Subsection (d) caps total credits statewide at $5 million annually.
• Subsection (e) requires employers to submit preapproval applications by October 1 each year, with the Department of Revenue issuing certificates by November 1.
• Subsection (f) allows pass-through entities without their own income tax liability to pass the credit to members, shareholders, or partners.
• Subsection (i) repeals the entire credit provision on December 31, 2028.
• Section 2 sets the effective date as July 1, 2025, applicable to tax years beginning on or after January 1, 2026.

1. 2025-04-04House Agreed Senate Amend or Sub As Amended (Cámara de Representantes)
2. 2025-04-02Senate Passed/Adopted By Substitute (Senado)
3. 2025-04-02Senate Third Read (Senado)
4. 2025-04-02Senate Taken from Table (Senado)
5. 2025-04-02Senate Tabled (Senado)
6. 2025-04-02Senate Engrossed (Senado)
7. 2025-03-27Senate Read Second Time (Senado)
8. 2025-03-27Senate Committee Favorably Reported By Substitute (Senado)

• Houston Gaines (R, HD-120)Patrocinador principal
• Jan Jones (R, HD-047)
• Bruce Williamson (R, HD-112)
• Chuck Efstration (R, HD-104)
• Trey Kelley (R, HD-016)
• Marcus Wiedower (R, HD-121)
• Chuck Hufstetler (R, SD-052)

1. AprobadaVotación: Cámara de Representantes6 de marzo de 2025

   96 a favor, 77 en contra (4 sin votar, 3 ausentes)

   Passage: House Vote #210

2. AprobadaVotación: Senado2 de abril de 2025

   31 a favor, 24 en contra (0 sin votar, 1 ausentes)

   Motion To Engross: Sb 214, Hb 66, Hb 79, Hb 129, Hb 134, Hb 141, Hb 370, Hb 397, Hb 445, Hb 463, Hb 532, Hb 586, Hb 652: Senate Vote #383

3. AprobadaVotación: Senado2 de abril de 2025

   43 a favor, 11 en contra (0 sin votar, 2 ausentes)

   Passage By Substitute: Senate Vote #426

4. AprobadaVotación: Cámara de Representantes4 de abril de 2025

   141 a favor, 31 en contra (1 sin votar, 7 ausentes)

   Agree To Senate Sub As Amended By House: House Vote #423

• small business tax credit
• health insurance
• income taxes
• health reimbursement arrangements