ATLANTA — The final moments of Georgia’s 2026 legislative session saw Republicans from both the House and Senate succeed in passing tax reduction bills, despite their initial conflicting proposals. The session concluded after midnight Friday with agreements to trim both income and property taxes, pending Governor Brian Kemp’s approval.
While the Senate’s aim to abolish income taxes and the House’s plan to eliminate property taxes were not fully realized, the new bills propose reductions to both. The Senate had to adapt a hemp farming bill at the last minute to facilitate a property tax reduction.
The proposed legislation would allow property taxes to decrease, funded by revenue from a new penny sales tax. Additionally, it aims to curb the rise in valuations of owner-occupied homes, capping increases to align with inflation rates. These changes, however, would not apply to commercial properties or renters.
Initially, a similar proposal from the House faced constitutional challenges, needing a two-thirds majority that was blocked by Democrats (source). To navigate this, the Senate devised an alternative allowing local legislative delegations to push for changes and putting the new sales tax to a public vote.
Clint Mueller, deputy director of the Association of County Commissioners of Georgia (ACCG), stated, “We think there are about 110 counties and all the cities within those 110 counties that could pretty much eliminate their homestead property taxes for county and city with that one-time sales tax.” Local government revenue would be limited by the inflation cap, though property value resets would occur with ownership changes or new constructions.
Further adjustments might include increased property tax rates by cities, counties, and school districts, though school districts face a legal cap at 20 mills, according to Mueller.
Senate Bill 33, formerly concerning hemp, incorporated elements of House Bill 1116, passing the Senate with Democrat opposition. In the House, Rep. Shaw Blackmon, R-Bonaire, acknowledged the Senate’s role in advancing the property tax cut, referencing a Marvel movie quote, “it’s not about you,” to emphasize the taxpayer’s benefit.
The House sent the bill to Governor Kemp, overcoming Democrat opposition. House Speaker Jon Burns, R-Newington, expressed dissatisfaction, noting that while the bill was robust, it lacked several initiatives that would have been more impactful for property taxpayers.
House Bill 463, if signed, will reduce the state income tax rate from 5.19% to 4.99%, with a potential decline to 3.99% over eight years, contingent on revenue stability. Meanwhile, income tax deductions would increase from $12,000 to $18,000 for single filers, with married couples seeing a doubling of these amounts. Dependent deductions are set to increase by $1,000 over this period.
The bill aims to offset these cuts by removing tax breaks for certain items, such as electric vehicle chargers and exported cigarette manufacturing. Critics like Sen. Josh McLaurin, D-Sandy Springs, argue the bill is fiscally irresponsible, failing to compensate for lost revenue and offering minimal benefits.
Sen. Harold Jones, II, D-Augusta, criticized the bill as a strategic political move, while Sen. Blake Tillery, R-Vidalia, acknowledged its limitations but saw it as progress, despite previous efforts to remove state income taxes entirely (source).
