HB 731: Alternative Homestead Option Sales and Use Tax Act of 2025; enact

Georgia already allows some counties to levy a homestead option sales tax that offsets homestead exemptions. HB731 adds a new, alternative version of this tax to state law (O.C.G.A. § 48-8-109.25 and following). Each county would be treated as its own special tax district, and its governing authority could ask voters to approve a 1 percent sales and use tax paired with a homestead exemption created by a separate local law. The tax could only take effect if voters approve both the sales tax and the related homestead exemption on the same ballot. Proceeds would be split between funding county capital outlay projects (mainly road improvements), covering revenue lost to the new homestead exemption, and, if money is left over, rolling back the county's operating tax rate. The tax and exemption would automatically expire ten years after collection begins, though counties could re-adopt them. Counties already using the existing homestead option sales tax could not also use this new one, and counties must post an annual public report on how much was collected and how much homestead value was reduced.

• Creates a new 'Alternative Homestead Option Sales and Use Tax' that counties may adopt only after voters approve both the tax and a paired homestead exemption in the same referendum.
• Sets the tax rate at 1 percent of retail sales, with a separate 1 percent rate capped at $3.00 per gallon for motor fuel sales.
• Requires proceeds to fund capital outlay projects (limited to road improvement projects for the county), replace revenue lost to the new homestead exemption, and roll back county operating tax rates if money remains.
• Automatically ends the tax and its linked homestead exemption ten years after collection begins, though counties can vote to readopt them under the same process.
• Bars counties from using this new tax if they already levy the existing homestead option sales tax under Article 2 of the same chapter.
• Requires counties to publish an annual online report showing how much tax was collected and how much homestead value was reduced, and to send it to local General Assembly members.

County governments and their voters, who would decide whether to adopt the tax; homeowners claiming the homestead exemption on their primary residence; existing and newly incorporated municipalities within a county, which would share in the capital outlay proceeds; and retailers and the Georgia Department of Revenue commissioner, who administer and collect the tax.

If adopted by a county's voters, this would shift some county funding from property taxes on homes toward a broader sales tax, lowering homeowners' assessed tax burden while raising the cost of taxable purchases in that county, including motor fuel up to a set price cap.

• Section 48-8-109.25 names the act and defines terms including 'homestead' (limited to a primary residence and up to five acres) and 'qualified municipality' (one incorporated after January 1, 2026).
• Section 48-8-109.26 creates 159 special tax districts matching county boundaries and sets the sales tax rate at 1 percent, with a matching 1 percent motor fuel tax capped at $3.00 per gallon.
• The referendum ballot must include a notice stating that neither the exemption nor the sales tax takes effect unless both are approved together.
• If approved, the tax cannot be resubmitted to voters for 24 months after a failed vote, and the tax terminates automatically ten years after it starts.
• Section 48-8-109.27 sets the distribution formula: a capital factor (up to .250) determines the share for capital projects (mainly roads), the rest offsets the homestead exemption, and leftover funds roll back the county's operating millage rate.
• Section 48-8-109.27 also directs capital outlay proceeds to existing and newly incorporated municipalities based on population share.
• Section 48-8-109.28 sets rules for tax credits when a similar tax was already paid elsewhere, exemptions for goods delivered outside the district, and exemptions for construction contracts bid before the tax was approved.
• Counties already levying tax under Article 2 (the current homestead option sales tax) cannot also levy this new alternative tax.

1. 2025-03-10House Second Readers (Cámara de Representantes)
2. 2025-03-06House First Readers (Cámara de Representantes)
3. 2025-03-04House Hopper (Cámara de Representantes)

• Mandi Ballinger (R, HD-023)Patrocinador principal
• Jordan Ridley (R, HD-022)
• Charlice Byrd (R, HD-020)
• Brad Thomas (R, HD-021)
• Mitchell Scoggins (R, HD-014)
• Jan Jones (R, HD-047)

• property taxes
• sales tax
• homestead exemption
• local government funding
• county referendums