“Crossover Day” in the Georgia legislature was Tuesday, March 15th—the 28th legislative day of 40 total legislative days – the day by which all bills must have passed one legislative chamber in order to cross over and be considered by the other chamber. Bills that have not passed one chamber prior to crossover are generally dead for the year, although there are still opportunities for tax provisions to be added to other tax bills that have crossed over. Georgia’s Constitution requires that all revenue related bills originate in the House, so the vast majority of bills still alive for the year now go over to the Senate. Sine Die, or the 40th and final legislative day, this year will be April 4, 2022.

Passed one Chamber and Crossing Over:

            Income Tax

HB 1058 – Consolidated Reporting Election. This bill authorizes affiliated groups to make a 5-year election to file consolidated corporate income tax returns in Georgia. Under current law, the Department of Revenue must give the affiliated group advanced permission to file on a consolidated basis and may prescribe conditions for the consolidated filing.

HB 1320 – Annual IRC Conformity. This is Georgia’s annual income tax conformity bill, which will conform Georgia’s revenue code to the federal Internal Revenue Code as of January 1, 2022. The bill also clarifies that the Department’s authority relating to emergency relief is based on federally (rather than “presidentially”) declared disasters, as defined in the Internal Revenue Code. The House passed this bill on February 24, 2022 and it has also passed out of the Senate Finance Committee. It now awaits passage by the full Senate. This bill should be read in conjunction with HB 7EX, which was passed during a special session by both chambers and signed by the Governor on December 8, 2021.

HB 1039 – Extension of railroad track maintenance credit. This bill extends the existing income tax credit, in O.C.G.A. § 48-7-40.34, for expenditures on the maintenance of railroad track from 2027 to 2029.

HB 1041 – Increase of Rural Hospital Credit. This bill increases the aggregate limit for state tax credits for contributions to rural hospital organizations effective in 2023.

HB 1053 – Extension of Postproduction Credit. The bill extends the film postproduction tax credit which currently expires January 1, 2023 to January 1, 2028. The bill also requires that entities that claim the post-production tax credit consent to taxation in Georgia on the income from those projects. Furthermore, the bill would tax nonresidents on future residual payments from work performed in Georgia with respect to a state certified production regardless of where such residuals are earned.

HB 1330 – Georgia Music and Theatre Jobs Recovery Act. This bill, makes several changes to the credits available, including lowering the qualifying spending threshold and increasing the value of the credit. The bill would tax foreign and domestic corporations on all income derived directly or indirectly from the sale, use, or lease of any state certified production for which a tax credit was claimed under this provision. Furthermore, the bill would tax nonresidents on future residual payments from work performed in Georgia with respect to a state certified production regardless of where such residuals are earned.

HB 1302 – Tax Credit for Individual Taxpayers. This bill provides a one-time tax refund for taxpayers who filed income tax returns for both the 2020 and 2021 tax years of $250 to $500, depending on filing status. This refund was included in Governor Kemp’s mid-year budget. This bill passed the House and has also passed out of the Senate Finance Committee.

HB 1437 – Tax Reduction and Reform Act of 2022. This bill would eliminate Georgia’s current graduated personal income tax brackets (with a top marginal rate of 5.75%) and provide a flat rate of 5.25%. This bill would combine the current standard deduction and personal exemption into one increased standard exemption. The bill would also disallow itemized deductions, other than the charitable contribution deduction.

            Sales Tax

Last year, Georgia made several changes to the High-Technology Exemption (O.C.G.A. § 48-8-3(68)). There are several pieces of legislation which would make further changes to the this exemption and change the Data Center Exemption (O.C.G.A. § 48-6-3(68.1), each of which have passed the House. These bills may be further amended or combined in the Senate:

HB 1187 – Extension of Sunset for Data Center Exemption. This bill extends the sunset of the Data Center Exemption in O.C.G.A. § 48-8-3(68.1) from 2028 to 2033 and adds a job creation component for data centers located in counties with a population of less than 50,001. The bill would also allow data centers located in counties with a population of less than 50,001 to qualify for certain income tax credits.

HB 1223 – Extension of Sunset for High-Technology Exemption. This bill extends the sunset of the exemption for the High-Technology Exemption (O.C.G.A. § 48-8-3(68)) from June 30, 2023 to December 31, 2023. This change is necessary since qualification for the exemption is measured by qualifying purchases made on a calendar year basis.

HB 1291 – Changes to High-Technology Exemption. Like HB 1223, this bill would extend the sunset of the current exemption to December 31, 2023. Beginning in 2024, a revised exemption would impose tax on 10% of the first $15 million of qualifying purchases, with no tax on purchases beyond that threshold. The bill would modify qualifying purchases (required to meet the $15 million threshold) to include only taxable purchases and leases, specifically excluding prewritten computer software (electronically delivered or otherwise) as a qualifying purchase. The proposal would eliminate the exemption certificate and require all qualifying taxpayers to claim the exemption via refund claim filed within 90 days after the end of the calendar year. The existing High-Tech Equipment Exemption allows a taxpayer to pre-qualify or file a refund claim on exempt purchases.

HB 1034 – Extension of Exemption for nonrecurring major sporting events. This bill extends the existing sales tax exemption for nonrecurring major sporting events expected to generate over $50 million in the host locality (such as a Super Bowl, professional sports all-star game, or semifinal game or championship game of a national collegiate tournament) through 2031. The bill also adds “any match of a FIFA World Cup” to the definition of “major sporting event.”

            Property Tax

HB 997 – Property tax exemption for timber producers. This bill provides for a constitutional referendum to provide for a state-wide exemption from all ad valorem taxes for certain equipment used by timber producers to produce or harvest timber.

HB 1224 –Personal Property Tax may be appealed to Hearing Officer instead of Board of Equalization. This bill allows a taxpayer that with taxable tangible property of an aggregate fair market value greater than $200,000 to elect to appeal to a hearing officer. Under current law, a taxpayer may appeal real property tax assessments to a hearing officer or the board of equalization, but personal property tax appeals (other than wireless property) must be appealed to the county board of equalization.

SB 511 –Property Tax Appeals Deadlines and Procedures. This bill revises deadlines, procedures, and notice requirements related to the handling of appeals of property tax appeals, where a taxpayer elects to appeal to a hearing officer. The bill also revises certain deadlines for appeals to the board of equalization. Because this bill deals with appeal procedures, and not raising revenue, it is one of the few bills that was passed by the Senate rather than House.

            Other

HB 304 – Exemption for Motor Fuel. This bill would eliminate the motor fuel tax until May 31, 2022. The bill passed the House and also the Senate Finance Committee, and now awaits passage. The gas tax suspension would become effective upon the Governor’s signature of the bill.

HB 1044 – Regional Development Authorities. This bill allows counties to joint form regional development authorities, where it may not feasible for a county to have its own development authority. Such development authorities are often the vehicles for private investment projects and property tax abatements.

Relevant bills that failed to pass but could remerge in another bill.

HB 594 – Taxation of Digital Goods and Services. This bill would impose sales and use tax on certain digital goods and services, including taxing electronically delivered goods and software, with an exemption for “prewritten computer software or digital products sold to a commercial enterprise and used primarily for its commercial purposes.” The bill would also provide an exemption for certain broadband equipment used for unserved areas of the state. The bill is an amended version of the proposal that carried over from the 2021 legislative session. HB 594 was heard by the Ways & Means Committee but did not pass out of committee.

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