How Georgia handles its taxes will never be the same.
As new tax laws passed in Georgia’s 2024 legislative session take effect this year, the financial landscape for local governments and taxpayers is rapidly changing.
Georgia taxpayers have several newly enacted regulations to consider in 2025, such as HB 581 and SB366, when discussing income and property taxes.
Additionally, another new Georgia law establishes a new tax court that allows the Department of Audits and Accounts to examine the state's current tax benefit structure and comparatively review its performance against its initial intention.
As we look closer at some tax-based laws coming into effect in Georgia this year, let’s explore how these provisions are expected to shake up state legal operations in 2025.
House Bill 581 Transforms State Property and Sales Taxes
Passed in April 2024, HB 581 introduces significant reforms to Georgia’s property and local sales tax systems, with the power to impact jurisdictions across the state.
Key provisions of the legislation include the authorization of a statewide floating homestead exemption applicable to all local governments, with an opt-out option that must be completed by March.
The bill also revises regulations related to tax estimates, the three-year lock, sales ratio studies, and settlement conference processes.
Additionally, it simplifies the local sales tax cap and establishes a new category of local sales tax aimed at providing property tax relief.
In 2025 and beyond, local sales tax limits will be restricted to 2%, despite several options to circumvent the limit, including penny costs for sectors such as transportation, education and other municipalities.
The value of a homestead, or an individual's current residence, is not expected to increase more than each year's inflation rate, creating new avenues for local sales tax that will likely aid in collecting property taxes.
According to the Georgia Municipal Association, this new option seeks to provide sales tax flexibility throughout the state.
Municipalities and local government representatives say the bill will address and consolidate county commissions, officials and elected leaders such as council members or mayors who can alter tax rates.
Senate Bill 366 Aims for Accountability
The "Tax Expenditures Transparency Act of 2024,” or Senate Bill 366, creates measures to enhance transparency and accountability in Georgia’s tax expenditure practices.
Under the new law, at least 12 economic analyses of tax expenditures will be conducted annually, with priority given to those nearing expiration within two years or with costs exceeding $20 million.
The bill also mandates comprehensive summaries of tax expenditures in the governor’s budget and requires annual reviews by legislative committees.
Additionally, evaluations will involve input from key stakeholders, including economists and business leaders, to ensure a thorough analysis.
The law states that legislators must have sufficient time to read and review appropriations bills, now allocating at least 24 hours after an amendment has been introduced.
Budgeting reports provided by the governor’s office must be made available promptly, and include a list of all existing revenue sources, the net revenue estimates from each source, and a tax expense summary.
To further support the trend of transparency, all audits will be made publicly available on the Department’s website each fiscal year and vetted by independent auditors.
By implementing these provisions, the legislation aims to strengthen oversight and improve the accountability of Georgia’s tax system.
Creating a New Tax Court
Since receiving full voter approval in November 2024, the Georgia State Tax Court has been established to tackle all tax-specific legal matters.
Under this recently enacted legislation, the tax court will reside in the state government’s judicial branch and fully replace the Georgia Tax Tribunal, a longstanding fixture of the executive branch.
The newly formed tax court will predominantly rule on tax cases between businesses operating throughout the state and the Georgia Department of Revenue, serving as an appellant court.
Prior to the court’s formation, all appeals and tax-related grievances were sent through the Fulton County Superior Court, which is not an appellant court.
Like the Georgia Tax Tribunal, Gov. Brian P. Kemp will appoint all presiding judges. Their appointments will be subject to a majority vote in both the state Senate and House judiciary committees.
Simpler, Smoother, Faster
Georgia’s new laws hope to address past criticisms with tax agencies across the Peach State, from streamlining financial reporting and simplifying tax exemptions to strengthening transparency.
The formation of the Georgia State Tax Court is a primary example of the state’s renewed focus on more efficient tax dispute resolutions.
Although fresh and untested, this set of tax-based reforms aims to create a more equitable and accountable tax system for all.
Georgia state residents and business owners should remain aware of reforms to properly adapt to an evolving tax framework.
