Committee passes substitute to HB 1116 to expand homestead relief and create local sales tax option

Members of the Public Policy & Finance Committee discussed and passed a substitute associated with HR 11/14 and enabling legislation HB 1116 (LC 339873S), which the presenter said would phase in increased homestead exemptions and create a local homestead option sales tax (LHOST) to reduce homestead property taxes at the local level.

The presenter summarized key elements: a phased homestead exemption beginning in 2027 with $10,000, rising to $30,000 in 2029 and $60,000 in 2031, with a provision described as effective in 2032 that would exempt homestead property after the first year of taxes paid (presenter described timing). The substitute also removes a cap on local homestead relief grants, provides a framework for local financing of essential services and capital projects, and contains technical edits including bond-language exemptions from a 3% cap and rules for using SPLOST increments in 0.05 increments.

The presenter noted changes made following city feedback, including adjusting the municipal participation threshold to require at least 50% of residents of eligible municipalities rather than the entire district, and clarifying how distribution agreements among counties and cities would be negotiated.

The committee moved the substitute, took a voice vote and recorded affirmations of "Aye" with no recorded opposition on the audio. Committee members also asked whether the updated substitute text would be posted; the presenter confirmed it would be made available online to give members time to review the new draft.

What happens next: The substitute passed the committee by voice vote and will be posted online for review; further action will depend on subsequent committee scheduling and floor calendars.