The Georgia General Assembly passed several significant tax bills during the 2024 legislative session. Among them was the creation of a tax court in the judicial branch, a reduction of the individual and corporate income tax rates, limitations on income tax credit carryforwards, and the suspension of the data center sales tax exemption. Bills that were considered but did not ultimately pass include limitations on the film tax credit. Because this is the final year of the two-year legislative session, any legislation not adopted this year will have to be re-introduced in the next legislative session.

The Georgia 2024 legislative session ended on March 28, 2024. Both chambers of the General Assembly passed the below bills before the end of the session, and these bills get transmitted to the Governor. Within 40 days (May 7), the Governor can sign or veto the legislation. Without any action by the Governor, the below bills that passed both chambers become law at the end of the 40-day period. Constitutional referendums go on the prescribed ballot without action by the Governor.

Passed Both Chambers

HR 598, HB 1267 – Georgia Tax Court. This legislation creates the Georgia Tax Court, transitioning the Georgia Tax Tribunal from an administrative court within the executive branch to a judicial branch court. HR 598 places a referendum question on the November 2024 ballot whether to amend the Constitution of Georgia to vest the Georgia Tax Court with the judicial power of the state and have jurisdiction concurrent with superior courts. If the constitutional referendum passes, HB 1267 provides the enabling legislation for the new Georgia Tax Court, which would begin operations on January 1, 2026, and receive cases on August 1, 2026.

Income Tax

HB 1015 – Reduce Individual Income Tax Rate. This bill expedites the state’s planned reduction of the individual income tax rate by lowering the rate from 5.49% to 5.39% for tax years beginning after January 1, 2024.

HB 1023 – Match Corporate Income Tax Rate to Individual Income Tax Rate. This bill matches the tax rate that every domestic and foreign corporation will pay on Georgia taxable income to the rates prescribed for individual income tax (as proposed to be reduced in HB 1015) and would also apply the same rates to pass-through entity owners that elect to be taxed at the entity level. The time a corporation may file its return is also extended by one month after the IRS filing deadline, although the date for payment of taxes does not change.

HB 1162 – Annual IRC Conformity. This bill, Georgia's annual income tax conformity bill, conforms Georgia's revenue code to the federal Internal Revenue Code as of January 1, 2024. No additional decoupling from federal tax law is within this legislation.

HB 1181 – Income Tax Credit Carryforward Period Reduction and Exemption/Credit Sunset.This bill reduces the carryforward period for most income tax credits. For example, the carryforward period for the research and development credit, jobs tax credit, and investment tax is reduced from 10 years to 5 years, although the ability to apply certain of those excess credits against payroll withholding is not impacted. Furthermore, the carryforward period for the Student Scholarship Organization and similar credits in exchange for donations, the film, gaming, video or digital production credit, and the postproduction credit is reduced from 5 years to 3 years. The carryforward period changes apply only to credits earned after the effective date of the legislation—January 1, 2025, and not for those credits that taxpayers have already earned. Taxpayers with unused credits earned prior to January 1, 2025 can continue to carryforward the credits for the prior, longer carryforward period. Additionally, the bill adds sunset dates for several existing incentives and sales tax exemptions to 2029. This legislation is a result of the Joint Tax Credit Review Panel that held numerous hearings around the state during 2023.

SB 344 - Non-Taxability of Federal Telecom Grants. This bill, formerly related to a sales tax exemption for firearms, was stripped and replaced with the text of former HB 814. The bill excludes from Georgia taxable net income, federal grants and sub-grants received under the Broadband Equity, Access, and Deployment Program or the American Rescue Plan Act of 2021 for making investments in broadband infrastructure. While the House passed a bill that would have made this change effective for tax years on or after January 1, 2022, the as-passed version of the bill changed the first effected tax year to 2024.

Sales Tax

HB 1192 – Sunset for Data Center Exemption. This bill pauses the Data Center Exemption in O.C.G.A. § 48-8-3(68.1) for the period beginning July 1, 2024 and ending June 30, 2026. HB 1192 prohibits the issuance of new certificates of exemption during that period for eligible high-technology data center equipment, except for high-tech data center tenants of an ongoing project that had contracts with the data center before July 1, 2024. Legislation was proposed, but failed to pass, which would have allowed new tenants of an approved data center to still obtain new certificates (see HB 101 discussed below).

The bill make changes to the new job requirement for Data Centers and also creates the Special Commission on Data Center Energy Planning to, among other things, review and make recommendations regarding the data center and its use of electricity and energy, for the scheduled revival of the exemption beginning July 1, 2026.

Property Tax

HB 808 - Tangible Personal Property Ad Valorem Exemption. This bill increases the ad valorem tax exemption for all tangible personal property in a county from $7,500 to $20,000. Taxpayers with total tangible personal in a county with a fair market value of less than $20,000 are exempt from ad valorem tax.

HB 1019 – Homestead Exemption. This bill puts a constitutional referendum on the November 2024 ballot on whether to increase the homestead exemption from $2,000 to $10,000.

HR 1022 – Homestead Exemption.This bill puts a constitutional referendum relating to allowing local option homestead exemptions to limit increases in the assessed value of homesteads, but allows local governments to opt out of such exemptions upon the completion of certain procedures.

HB 581– Homestead Exemption and FLOST. This bill also relates to the homestead valuations capping valuations based on inflation, addresses property tax notices, and additionally incorporates former HB 1115 (new sales tax FLOST authorization). The bill introduces a new flexible penny local option sales tax, in addition to the existing HOST and LOST sales tax in exchange for additional property tax relief. The local sales tax rates is generally capped at 3%.

Other

SB 366 – Tax Expenditures Transparency Act of 2024. This bill expands the existing tax incentive audit process (under prior legislation in 2021, SB 6), requiring a listing of state revenue sources and tax credit spending in the budget, increasing the number of annual audits, setting criteria to determine which incentives to audit, and requiring certain content to be included within each audit report.

Did Not Pass

HB 101 – This omnibus tax legislation would have made several changes involving rural hospital income tax credits, qualified education donation income tax credits, and historic properties ad valorem taxes. It also proposed a change to the Data Center Exemption bill (HB 1192) to clarify that new tenants of data centers approved before July 1, 2024 could still apply for a data center certificate.

HB 1180 – Film Tax Credit Limitations. This bill would have made several significant changes to the film tax credit. Under the bill, there would have be separate statutes and tax credits for “production companies” and “qualified interactive entertainment production companies.” The bill added additional criteria to be eligible for the 10% additional credit, when at least four of those criteria are met. Additionally, the bill would have capped the amount of credits that can be sold or transferred at percentage of the corresponding fiscal year’s budget. This legislation was a result of the review of state tax incentives by the Joint Tax Credit Review Panel. Although the Senate committee considered the bill and the Senate Finance Committee favorably reported, the Senate ultimately did not take up a vote on the bill.

SB 349 – Interactive Entertainment Tax Credit Limitations. The House stripped a property tax bill to add a separate attempt to enact changes to the film tax credit limitation. The bill created a separate tax credit for interactive entertainment companies, but also contained limitations similar to HB 1180.

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