25 LC 50 1176S
The House Committee on Ways and Means offers the following substitute to HB 560:
A BILL TO BE ENTITLED
AN ACT
To amend Chapter 8 of Title 48 of the Official Code of Georgia Annotated, relating to sales1
and use taxes, so as to exempt from local taxes the sale or use of construction materials used2
in certain capital outlay projects for educational purposes; to provide that such exemption3
only applies to projects for local school systems that have in effect certain homestead4
exemptions from property taxation; to provide for conditions, limitations, and definitions;5
to provide for payment, collection, and refunds; to provide for an automatic repeal; to6
provide for the maximum amount of local sales and use taxes that may be imposed; to revise7
provisions related to a special district sales and use tax; to provide for conditions under8
which such tax may be imposed; to provide for clarifications; to revise provisions related to9
the joint county and municipal sales and use tax (LOST); to provide for the distribution of10
tax proceeds under certain circumstances; to limit the application of certain requirements11
with respect to absent counties; to provide for related matters; to provide for applicability;12
to repeal conflicting laws; and for other purposes.13
BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:14
H. B. 560 (SUB)
- 1 - 25 LC 50 1176S
PART I15
SECTION 1-1.16
Chapter 8 of Title 48 of the Official Code of Georgia Annotated, relating to sales and use17
taxes, is amended in Code Section 48-8-3, relating to exemptions from sales and use taxes,18
by adding a new paragraph to read as follows:19
"(10.1)(A) Notwithstanding any provision of Code Section 48-8-63 to the contrary, the20
sale or use of qualifying construction materials used in capital outlay projects for21
educational purposes.22
(B) The exemption provided for in this paragraph shall only apply to local sales and23
use taxes.24
(C)(i) Notwithstanding the exemption provided for in subparagraph (A) of this25
paragraph, all sales and use taxes imposed on the sale or use of qualifying26
construction materials shall be paid and collected pursuant to the requirements of this27
chapter.28
(ii) The benefit of the exemption allowed by this paragraph may be claimed by the29
local school system for which the qualifying construction materials were used. To30
claim the exemption, the local school system shall file a request for refund in the31
manner prescribed by the department. The department shall refund to the local school32
system the amount of taxes paid on qualifying construction materials used in the33
capital outlay project for educational purposes. No refund made pursuant to this34
paragraph shall include interest.35
(iii) Any refund received by a local school system pursuant to this paragraph shall be36
allocated to a fund or account for capital outlay projects and used in accordance with37
the requirements for sales taxes for educational purposes authorized pursuant to38
Article VIII, Section VI, Paragraph IV of the Constitution of Georgia.39
(D) As used in this paragraph, the term:40
H. B. 560 (SUB)
- 2 - 25 LC 50 1176S
(i) 'Capital outlay project for educational purposes' means a project that:41
(I) Was approved and funded through a sales tax for educational purposes42
authorized pursuant to Article VIII, Section VI, Paragraph IV of the Constitution of43
Georgia; and44
(II) Is for a local school system which has in effect a base year value or adjusted45
base year value homestead exemption from ad valorem taxation for educational46
purposes for all residents of the local school system.47
(ii) 'Local sales and use taxes' mean sales taxes, use taxes, or local sales and use taxes48
levied or imposed at any time in any area consisting of less than the entire state,49
however authorized, including, but not limited to, such taxes authorized by or50
pursuant to a constitutional amendment; by or pursuant to Section 25 of an Act51
approved March 10, 1965 (Ga. L. 1965, p. 2243), as amended, the 'Metropolitan52
Atlanta Rapid Transit Authority Act of 1965'; and by or pursuant to Articles 2, 2A,53
2B, 3, 4, 5, 5A, and 5B of this chapter.54
(iii) 'Qualifying construction materials' means any materials used in the construction55
of a capital outlay project for educational purposes that will remain as part of such56
project after completion of construction or that become incorporated into such57
project's real property. Such term shall not include any materials that remain in the58
possession of a contractor after the completion of construction.59
(E) This paragraph shall stand repealed on December 31, 2033;"60
61
PART II62
SECTION 2-1.63
Chapter 8 of Title 48 of the Official Code of Georgia Annotated, relating to sales and use64
taxes, is amended in Code Section 48-8-6, relating to prohibition of political subdivisions65
H. B. 560 (SUB)
- 3 - 25 LC 50 1176S
from imposing various taxes, ceiling on local sales and use taxes, and taxation of mobile66
telecommunications, by revising subsection (a) as follows:67
"(a)(1) Except as provided in this subsection, on and after July 1, 2024, there shall not68
be imposed in any jurisdiction in this state or on any transaction in this state local sales69
taxes, local use taxes, or local sales and use taxes in excess of 2 percent. For purposes70
of this such 2 percent limitation, the taxes affected are any sales tax, use tax, or sales and71
use tax which is levied in an area consisting of less than the entire state, however72
authorized, including such taxes authorized by or pursuant to constitutional amendment,73
and regardless of whether another provision of law purports to the contrary, except for74
the following:75
(A) A 1 percent sales and use tax for educational purposes exempted from such76
limitation under Article VIII, Section VI, Paragraph IV of the Constitution;77
(B) Up to 1 percent in aggregate of any of the transportation related sales and use taxes78
authorized under Articles 5, 5A, and 5B of this chapter and Article 2 of Chapter 9 of79
Title 32, and in a county in which a tax is levied and collected pursuant to Part 2 of80
Article 2A of this chapter, any tax levied for purposes of a metropolitan area system of81
public transportation, as authorized by the amendment to the Constitution set out at82
Georgia Laws, 1964, page 1008, the continuation of such amendment under Article XI,83
Section I, Paragraph IV(d) of the Constitution, and the laws enacted pursuant to such84
constitutional amendment; and85
(C) Up to 1 percent in aggregate of any sales and use taxes authorized under Code86
Section 48-8-96, Code Section 48-8-97, Article 2B of this chapter, Part 3 of Article 387
of this chapter, and Article 4 of this chapter.88
(2) Notwithstanding any provision of law to the contrary, any tax that does not comply89
with the limitations provided in paragraph (1) of this subsection as of July 1, 2025, but90
was initiated in compliance with the law in effect prior to January 1, 2025, shall be91
allowed to continue as authorized under laws that existed prior to July 1, 2025; provided,92
H. B. 560 (SUB)
- 4 - 25 LC 50 1176S
however, that, upon the expiration or termination of any such tax, such tax shall not be93
renewed and the jurisdiction that levied such tax shall be fully subject to the limitations94
imposed by this subsection.95
(3) This subsection shall not limit the imposition of any local excise tax, which is96
separately authorized under Chapter 13 of this title.97
(4) Except as provided in paragraph (2) of this subsection, if If the imposition of any98
otherwise authorized local sales tax, local use tax, or local sales and use tax would result99
in a tax rate in excess of that authorized by this subsection, then such otherwise100
authorized tax shall not be imposed."101
SECTION 2-2.102
Said chapter is further amended by revising Code Section 48-8-109.31, relating to imposition103
of special sales and use tax within special district and limited time and purpose, as follows:104
"48-8-109.31.105
(a) Subject to the requirement of approval by local referendum and the other requirements106
of this article, to impose there may be imposed within any given special district a special107
sales and use tax for a limited period of time for the limited purpose of property tax relief.108
(b) Except as to rate, a tax imposed under this part shall correspond to the tax imposed by109
Article 1 of this chapter. No item or transaction which is not subject to taxation under110
Article 1 of this chapter shall be subject to a tax imposed under this article, except that a111
tax imposed under this article shall apply to sales of motor fuels as prepaid local tax as112
defined in Code Section 48-8-2 and shall be applicable to the sale of food and food113
ingredients and alcoholic beverages as provided for in Code Section 48-8-3.114
(c) The special sales and use tax provided for in subsection (a) of this Code section may115
be imposed by a special district in 0.05 percent increments, but in no event shall such tax116
exceed 1 percent in total. The levy of such tax upon sales of motor fuels as defined in117
H. B. 560 (SUB)
- 5 - 25 LC 50 1176S
Code Section 48-9-2 shall only be imposed on the retail sales price of the motor fuel which118
is not more than $3.00 per gallon.119
(d)(1) As a condition precedent to the issuance of the call for the referendum:120
(A)(1) The governing authority of the county whose geographical boundary is121
conterminous with that of the special district and the governing authority or authorities122
of all municipalities that levy an ad valorem tax on property, other than those123
municipalities that are excluded from the special district pursuant to paragraph (3)124
subsection (f) of this subsection Code section, shall have in effect a base year value125
homestead exemption or adjusted base year value homestead exemption; and126
(B)(2) The governing authority of the county whose geographical boundary is127
conterminous with that of the special district and the governing authority or authorities,128
if any, that represent at least 50 percent of the special district's residents of municipalities129
that levy an ad valorem tax on property, other than those municipalities that are excluded130
from the special district pursuant to paragraph (3) of this subsection (f) of this Code131
section, shall enter into an intergovernmental agreement calling for the tax authorized132
under this article and specifying the proposed rate of the tax, the proposed maximum133
period of time that the tax is to be levied, and the proposed distribution of the tax.134
(e)(1) As used in this subsection, the term 'absent municipality' means any municipality135
that levies an ad valorem tax on property, other than those municipalities that are136
excluded from the special district pursuant to subsection (f) of this Code section, and that137
did not enter into the intergovernmental agreement provided for in paragraph (2) of138
subsection (d) of this Code section.139
(2) If the combined total of the populations of all such absent municipalities is less than140
one-half of the aggregate population of all municipalities located within the special141
district that levy an ad valorem tax on property, the political subdivisions governing142
authorities entering into the such intergovernmental agreement shall, on in behalf of such143
absent municipalities, specify a percentage of that portion of the remaining proceeds144
H. B. 560 (SUB)
- 6 - 25 LC 50 1176S
which each municipality that levies an ad valorem tax on property shall receive, which145
percentage shall not be less than that proportion which each such absent municipality's146
population bears to the total population of all municipalities that levy ad valorem taxes147
on property within the special district multiplied by that portion of the remaining148
proceeds which are received by all such municipalities within the special district. No149
portion of the tax shall be apportioned to counties and or municipalities that do not levy150
an ad valorem tax on property or do not have a base year value homestead exemption or151
adjusted base year value homestead exemption in effect.152
(3)(f) Subject to the limitation provided for in Code Section 48-8-6, any special district153
which wholly or partially contains a jurisdiction levying the tax provided for under154
Article 4 of this chapter is authorized to levy the tax authorized under this article. Such tax155
authorized under this article may only be levied in the areas of the special district outside156
of the jurisdiction levying the tax provided for under Article 4 of this chapter. Any157
jurisdiction levying the tax provided for under Article 4 of this chapter shall not be158
considered within the procedure necessary to levy the tax under this article and shall not159
be entitled to any portion of said tax."160
SECTION 2-3.161
Said chapter is further amended in Code Section 48-8-109.32, relating to maximum period162
of time of the tax, submission to voters to determine imposition of tax, ballot language, and163
expenses of election, by adding a new subsection to read as follows:164
"(e) If no intergovernmental agreement is required pursuant to this article, the governing165
authority of the county or consolidated government whose geographical boundary is166
conterminous with that of the special district shall adopt a resolution which meets the167
requirements provided for in this Code section for intergovernmental agreements."168
H. B. 560 (SUB)
- 7 - 25 LC 50 1176S
SECTION 2-4.169
Said chapter is further amended in Code Section 48-8-109.33, relating to timing for170
imposition of tax following approval and termination of tax, by revising paragraph (2) of171
subsection (a) and subsection (c) as follows:172
"(2) With respect to services that are regularly billed on a monthly basis, however, the173
resolution or ordinance imposing the tax shall become effective and the tax shall apply174
to the first regular billing period coinciding with or following the effective date specified175
in paragraph (1) of this subsection. A certified copy of the ordinance intergovernmental176
agreement or resolution imposing required to impose the tax authorized by this article177
shall be forwarded to the commissioner to ensure it is received within five business days178
after certification of the election results."179
"(c) For any special district in which a tax authorized by this article is in effect may, while180
such tax is in effect, the General Assembly may pass a local Act calling for a reimposition181
of a tax as authorized by this article upon the termination of the tax then in effect, and a182
referendum may be held for this purpose while the tax is in effect. Proceedings for such183
reimposition shall be in the same manner as proceedings for the initial imposition of the184
tax as provided for in Code Section Sections 48-8-109.31 and 48-8-109.32. Such newly185
authorized tax shall not be imposed until the expiration of the tax then in effect."186
PART III187
SECTION 3-1.188
Said chapter is further amended in Article 2, relating to joint county and municipal sales and189
use tax (LOST), by revising Code Section 48-8-89, relating to distribution and use of190
proceeds, negotiated certificate of distribution for political subdivisions, absent191
municipalities, filing of certificates, and renegotiations, as follows:192
H. B. 560 (SUB)
- 8 - 25 LC 50 1176S
"48-8-89.193
(a) The proceeds of the tax collected by the commissioner in each special district under194
this article shall be disbursed as soon as practicable after collection as follows:195
(1) One percent of the amount collected shall be paid into the general fund of the state196
treasury in order to defray the costs of administration; and197
(2) Except for the percentage provided in paragraph (1) of this subsection, the remaining198
proceeds of the tax shall be distributed to the governing authority of each qualified199
municipality within the special district and to the governing authority of the county200
whose geographical boundary is conterminous with that of the special district for the201
purpose of assisting such political subdivisions in funding all or any portion of those202
services which are to be provided by such governing authorities pursuant to and in203
accordance with Article IX, Section II, Paragraph III of the Constitution of this state.204
(b) It is the intent of the General Assembly that no agreement as to the distribution of the205
proceeds of the tax shall enrich any political subdivision beyond a sum which in the206
absence of the distribution would be raised through other sources of revenue. The207
distribution shall be in accordance with a certificate which shall be executed in behalf of208
each respective governing authority, except as otherwise provided in this subsection, and209
which shall encompass all respective political subdivisions, shall be filed with the210
commissioner, and shall specify by percentage that portion of the remaining proceeds of211
the tax available for distribution which each such political subdivision shall receive. On212
or after July 1, 1995, the distribution of proceeds of the tax as specified in the certificate213
shall be based upon, but not be limited to, the following criteria:214
(1) The service delivery responsibilities of each political subdivision to the population215
served by the political jurisdiction and served during normal business hours, conventions,216
trade shows, athletic events and the inherent value to a community of a central business217
district and the unincorporated areas of the county and the obligation of all residents of218
H. B. 560 (SUB)
- 9 - 25 LC 50 1176S
the county for the maintenance and prosperity of the central business district and the219
unincorporated areas of the county;220
(2) The service delivery responsibilities of each political subdivision to the resident221
population of the subdivision;222
(3) The existing service delivery responsibility of each political subdivision;223
(4) The effect of a change in sales tax distribution on the ability of each political224
subdivision to meet its short-term and long-term debt;225
(5) The point of sale and use which generates the tax to be apportioned;226
(6) The existence of intergovernmental agreements among and between the political227
subdivisions;228
(7) The use by any political subdivision of property taxes and other revenues from some229
taxpayers to subsidize the cost of services provided to other taxpayers of the levying230
subdivision; and231
(8) Any coordinated plan of county and municipal service delivery and financing.232
Notwithstanding the fact that a certificate shall not contain an execution in behalf of one233
or more qualified municipalities within the special district or an execution of the county234
whose boundaries are conterminous with that of the special district, if the combined total235
of the populations of all such absent municipalities political subdivisions is less than236
one-half of the aggregate population of all qualified municipalities located within the237
special district, the submitting political subdivisions shall, in behalf of the absent238
municipalities political subdivisions, specify a percentage of that portion of the remaining239
proceeds which each such municipality or county shall receive, which percentage shall not240
be less than that proportion which each absent municipality's population or absent county's241
unincorporated population bears to the total population of all qualified municipalities242
within the special district multiplied by that portion of the remaining proceeds which are243
received by all qualified municipalities political subdivisions within the special district. 244
For the purpose of determining the population of the absent municipalities, only that245
H. B. 560 (SUB)
- 10 - 25 LC 50 1176S
portion of the population of each such municipality which is located within the special246
district shall be computed. No certificate may contain a total of specified percentages in247
excess of 100 percent. The certificate shall be filed with the commissioner by March 1,248
1980, for those special districts in which the tax authorized by this article is being levied249
on January 1, 1980. For all other special districts in which the tax shall be imposed250
subsequent to January 1, 1980, the certificate shall be filed with the commissioner within251
60 days after the tax is imposed within the district. The commissioner shall continue to252
distribute the proceeds of the tax as otherwise provided in this Code section until the first253
day of the next calendar year following the month in which the commissioner receives a254
certificate as provided in this Code section, which certificate shall provide other255
percentages upon which the commissioner shall make the distribution to the political256
subdivisions entitled to the proceeds of the tax. At such time, the commissioner shall257
thereafter distribute the proceeds of the tax in accordance with the directions of the258
certificate.259
(c) If the certificate provided for in subsection (b) of this Code section is not received by260
the commissioner by the required date, the authority to impose the tax authorized by Code261
Section 48-8-82 shall cease on the first day of the second calendar month following the262
month in which the tax was initially imposed and the tax shall not be levied in the special263
district after such date unless the reimposition of the tax is subsequently authorized264
pursuant to Code Section 48-8-85. When the imposition of the tax is so terminated, the265
commissioner shall retain the proceeds of the tax which were to be distributed to the266
governing authorities of the county and qualified municipalities within the special district267
until he or she receives a certificate in behalf of each such governing authority specifying268
the percentage of the proceeds which each such governing authority shall receive. If no269
such certificate is received by the commissioner within 120 days of the date on which the270
authority to levy the tax was terminated, the proceeds shall escheat to the state and the271
commissioner shall transfer the proceeds to the state's general fund.272
H. B. 560 (SUB)
- 11 - 25 LC 50 1176S
(d)(1) A certificate providing for the distribution of the proceeds of the tax authorized273
by this article shall expire on December 31 of the second year following the year in which274
the decennial census is conducted. No later than December 30 of the second year275
following the year in which the census is conducted, a new distribution certificate276
meeting the requirements for certificates specified by subsection (b) of this Code section277
shall be filed with and received by the commissioner. The General Assembly recognizes278
that the requirement for government services is not always in direct correlation with279
population. Although a new distribution certificate is required within a time certain of280
the decennial census, this requirement is not meant to convey an intent by the General281
Assembly that population as a criterion should be more heavily weighted than other282
criteria. It is the express intent of the General Assembly in requiring such renegotiation283
that eligible political subdivisions shall analyze local service delivery responsibilities and284
the existing allocation of proceeds made available to such governments under the285
provisions of this article and make rational the allocation of such resources to meet such286
service delivery responsibilities. Political subdivisions in their renegotiation of such287
distributions shall at a minimum consider the criteria specified in subsection (b) of this288
Code section.289
(2) The commissioner shall be notified in writing of the commencement of renegotiation290
proceedings by the county governing authority on behalf of all eligible political291
subdivisions within the special district. The eligible political subdivisions shall292
commence renegotiations at the call of the county governing authority before July 1 of293
the second year following the year in which the census is conducted. If the county294
governing authority does not issue the call by that date, any eligible municipality may295
issue the call and so notify the commissioner and all eligible political subdivisions within296
the special district.297
(3) Following the commencement of such renegotiation, if the parties necessary to an298
agreement fail to reach an agreement within 60 days, such parties shall submit the dispute299
H. B. 560 (SUB)
- 12 - 25 LC 50 1176S
to nonbinding arbitration, mediation, or such other means of resolving conflicts in a300
manner which attempts to reach a resolution of the dispute. Any renegotiation agreement301
reached pursuant to this paragraph shall be in accordance with the requirements specified302
in paragraph (1) of this subsection.303
(4) Reserved.304
(5) If a new distribution certificate as provided for in this Code section is not received305
by the commissioner, the authority to impose the tax authorized by Code Section 48-8-82306
shall cease, and the tax shall not be levied in the special district after such date unless the307
reimposition of the tax is subsequently authorized pursuant to Code Section 48-8-85. 308
When the imposition of the tax is so terminated, the commissioner shall retain the309
proceeds of the tax which were to be distributed to the governing authorities of the county310
and qualified municipalities within the special district until the commissioner receives a311
certificate on behalf of each such governing authority specifying the percentage of the312
proceeds which each such governing authority shall receive. If no such certificate is313
received by the commissioner within 120 days of the date on which the authority to levy314
the tax was terminated, the proceeds shall escheat to the state, and the commissioner shall315
transfer the proceeds to the state's general fund.316
(6) If the commissioner receives a new distribution certificate by the required date, the317
commissioner shall distribute the proceeds of the tax in accordance with the directions318
of the new distribution certificate commencing on January 1 of the year immediately319
following the year in which such certificate was executed by the parties or the judge or320
the first day of the second calendar month following the month such certificate was321
executed by the parties or the judge, whichever is sooner.322
(7) Costs of any conflict resolution under paragraph (3) or (4) of this subsection shall be323
borne proportionately by the affected political subdivisions in accordance with the final324
percentage distributions of the proceeds of the tax as reflected by the new distribution325
certificate.326
H. B. 560 (SUB)
- 13 - 25 LC 50 1176S
(8) Political subdivisions shall be authorized, at their option, to renegotiate distribution327
certificates on a more frequent basis than is otherwise required under this subsection.328
(9) No provision of this subsection shall apply to any county which is authorized to levy329
or which levies a local sales tax, local use tax, or local sales and use tax for educational330
purposes pursuant to a local constitutional amendment or to any county which is331
authorized to expend all or any portion of the proceeds of any sales tax, use tax, or sales332
and use tax for educational purposes pursuant to a local constitutional amendment."333
SECTION 3-2.334
Said chapter is further amended in said article by revising subsection (c) of Code Section335
48-8-89.1, relating to procedure for certifying additional qualified municipalities, issuance336
of new distribution certificate, and cessation of authority to collect tax, as follows:337
"(c) Except as otherwise provided in this subsection, a distribution certificate required by338
this Code section must be executed by the governing authorities of the county within which339
the special district is located and each qualified municipality located wholly or partially340
within the special district, including the new qualified municipality. Notwithstanding the341
fact that a certificate shall not contain an execution in behalf of the county within which342
the special district is located or one or more qualified municipalities within the special343
district, if the combined total of the populations of all such absent municipalities and the344
absent county's unincorporated population is less than one-half of the aggregate population345
of all qualified municipalities located within the special district, the submitting political346
subdivisions shall, in behalf of the absent municipalities political subdivisions, specify a347
percentage of that portion of the remaining proceeds which each such municipality political348
subdivision shall receive, which percentage shall not be less than that proportion which349
each absent municipality's and any absent county's unincorporated population bears to the350
total population of all qualified municipalities within the special district multiplied by that351
portion of the remaining proceeds which are received by all qualified municipalities352
H. B. 560 (SUB)
- 14 - 25 LC 50 1176S
political subdivisions within the special district. For the purpose of determining the353
population of the absent municipalities, only that portion of the population of each such354
municipality which is located within the special district shall be computed."355
SECTION 3-3.356
Said chapter is further amended in said article by adding a new subsection to Code Section357
48-8-91, relating to condition precedent to authority to impose tax after first year, annual358
adjustment of millage rate formula, and information required on tax bills, to read as follows:359
"(c) This Code section shall not be applicable to the county whose geographical boundary360
is conterminous with that of the special district for any period of time that such county is361
treated as an absent county under Code Section 48-8-89 or 48-8-89.1."362
PART IV363
SECTION 4-1.364
Part III of this Act shall only apply with respect to distribution certificates entered into on or365
after January 1, 2028.366
SECTION 4-2.367
All laws and parts of laws in conflict with this Act are repealed.368
H. B. 560 (SUB)
- 15 -