During its 2024 legislative session, the Georgia General Assembly passed several key tax bills, including a double tax cut boost for individuals and corporations, creating a tax court in the judicial branch, limits on income tax credit carryforwards and the suspension of the data center sales tax exemption, among others. March 28, 2024, marked the end of Georgia’s two-year legislative session, meaning legislation that was not adopted this year must wait to be revisited in the next session.
Our State and Local Tax Practice has included a roundup of key bills from this legislative session with significant impact in the state of Georgia. Without action from Governor Brian Kemp within 40 days since the close of the legislative session, the below bills will become law.
Key HBs Impacting Georgia Taxpayers
- HB 1015, Reduce Individual Income Tax Rate. HB 1015 lowers the state’s income tax rate from 5.49 percent to 5.39 percent for tax years beginning after Jan. 1, 2024.
- HB 1023, Match Corporate Income Tax Rate to Individual Income Tax Rate. HB 1023 matches the corporate income tax rate to the individual income tax rate set in HB 1015 at 5.39 percent, applicable to every domestic and foreign corporation that pays on taxable income in Georgia. The rate also applies to pass-through entity owners who elect to be taxed at the entity level.
- HB 1181, Income Tax Credit Carryforward Period Reduction and Exemption/Credit Sunset. The bill reduces the carryforward period for income tax credits. For most credits, the carryforward period is reduced from 10 years to five years (research and development credit, jobs tax credit, investment tax credit). Certain credits, such as those for student scholarships and film production, are reduced from five years to three years (Student Scholarship Organization credit, film, gaming video or digital production credit, postproduction credit). These changes only apply to credits earned after Jan. 1, 2025. The bill also adds sunset dates to some tax incentives and exemptions.
- HB 1162, Annual Internal Revenue Code (IRC) Conformity. Georgia’s annual income tax conformity bill conforms Georgia’s revenue code to the federal IRC with no additional decoupling from federal tax law.
- HB 598, Creation of Georgia Tax Court. The bill transitions the Georgia Tax Tribunal from an administrative court in the executive branch to a judicial branch court. HR 598 will allow voters to decide on a ballot question in November 2024 whether to give the Georgia Tax Court the same judicial authority as the state’s superior courts. If the referendum passes, another bill (HB 1267) will enable the Georgia Tax Court to begin operations Jan. 1, 2026, and begin receiving cases Aug. 1, 2026.
- HB 1019, Homestead Exemption. HB 1019 allows voters to decide on a ballot question in November 2024 whether to increase the homestead exemption from $2,000 to $10,000.
- HB 1022, Homestead Exemption. The bill proposes a change to the state constitution that would allow local governments to offer property tax relief for homeowners, giving them the option to limit how much the taxable value of a primary residence can increase. However, local governments would retain the ability to choose not to offer the exemption by following specific procedures.
- HB 581, Homestead Exemption and FLOST. The bill proposes capping how much the taxable value of a home can increase each year, likely based on inflation. It also addresses how property tax notices are formatted and includes a provision from a previous bill (HB 1115) that allows counties to enact a new local sales tax. The new tax option would be flexible and separate from existing sales taxes used for tourism (HOST) an education (LOST). There is generally a three percent cap on the rate for this new local sales tax.
- HB 808, Tangible Personal Property Ad Valorem Exemption. The ad valorem tax exemption for tangible property in a county will increase from $7,500 to $20,000. Taxpayers are exempt from ad valorem tax if their total tangible personal property in a county has fair market value of less than $20,000.
- HB 1180, Film Tax Credit Limitations (did not pass). Lawmakers considered a bill that would have significantly revamped Georgia’s film tax credit program. The proposal would have created separate rules and credits for film production companies and those specializing in interactive entertainment. Qualifying for an additional 10 percent tax credit would have required meeting stricter criteria, with at least four specific benchmarks needed. The bill also aimed to limit the amount of film tax credits that could be sold or transferred each year. This proposal came after a state review of tax incentives, but it ultimately died in the Senate without a vote, despite committee approval.
Windham Brannon Knows State and Local Tax
Windham Brannon’s State and Local Tax Practice is ready to help you understand the impact of recent tax legislation passed in the state of Georgia. We do more than filing returns – as trusted advisors, we offer guidance on business formation, tax planning and multi-state considerations. For questions or more information, reach out to your Windham Brannon advisor, or contact Tim Clancy.
