The following signed by Gov Brian Kemp in 2025.

25 HB 266/AP House Bill 266 (AS PASSED HOUSE AND SENATE) By: Representatives Sainz of the 180th, Ballard of the 147th, Bonner of the 73rd, Clark of the 100th, Petrea of the 166th, and others A BILL TO BE ENTITLED AN ACT

1 To amend Chapter 7 of Title 48 of the Official Code of Georgia Annotated, relating to

2 income taxes, so as to exempt from taxation certain income received as retirement benefits

3 derived from service in the armed forces of the United States or the reserve components

4 thereof; to revise a tax credit for contributions to law enforcement foundations; to expand the

5 number of foundations that qualify; to expand the qualified expenditures; to increase the

6 annual amount of contributions allowed; to reduce a cap for certain entities; to extend the

7 sunset date; to remove the carry forward authorization; to provide for procedures; to provide

8 for related matters; to provide for effective dates and applicability; to repeal conflicting laws;

9 and for other purposes.

10 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA: 11 SECTION 1. 12 Chapter 7 of Title 48 of the Official Code of Georgia Annotated, relating to income taxes, 13 is amended in Code Section 48-7-27, relating to computation of taxable net income, by 14 revising paragraph (5.1) of subsection (a) as follows: 15 "(5.1)(A) Up to $17,500.00 of income Income received by an individual who is less than 16 62 65 years of age paid to such individual as retirement benefits from military service in H. B. 266 - 1 - 25 HB 266/AP 17 the armed forces of the United States or the reserve components thereof and an additional 18 amount of up to $17,500.00 of such income, provided that he or she has Georgia earned 19 income otherwise included in his or her Georgia taxable net income in an amount that 20 exceeds $17,500.00 in an amount that shall not exceed $65,000.00. 21 (B) In the case of a married couple filing jointly, each spouse who is otherwise 22 qualified for an exclusion allowed by this paragraph shall be individually entitled to 23 exclude retirement income received by that spouse up to the exclusion amount. 24 (C) The exclusions provided for in this paragraph shall not apply to or affect and shall 25 be in addition to those adjustments to net income provided for under any other 26 paragraph of this subsection; provided, however, that no individual shall be allowed an 27 exclusion provided for in this paragraph in addition to any exclusion provided for in 28 paragraph (5) of this subsection;" 29 SECTION 2. 30 Said chapter is further amended in Code Section 48-7-29.25, relating to income tax credits 31 for contributions to law enforcement foundations, as follows: 32 "48-7-29.25. 33 (a) As used in this Code section, the term: 34 (1) 'Law enforcement foundation' means any domestic nonprofit corporation with the 35 sole function of supporting one local law enforcement unit through a formal relationship 36 recognized by such local law enforcement unit with one or more local law enforcement 37 units or which provides support to law enforcement state wide and which maintains 38 nonprofit status under Section 501(c)(3) of the Internal Revenue Code and tax exempt 39 status under Code Section 48-7-25. 40 (2) 'Local law enforcement unit' means any agency, office, or department of a county, 41 municipality, or consolidated government of this state whose primary functions include 42 the enforcement of criminal or traffic laws, preservation of public order, protection of life H. B. 266 - 2 - 25 HB 266/AP 43 and property, or the prevention, detection, or investigation of crime. Such term shall 44 include any sheriff's office in this state. Such term shall not include any agency, office, 45 or department conducting similar functions for any court, state board, state authority, 46 state law enforcement division or department, railroad police, or any unit appointed under 47 the authority of Chapter 9 of Title 35 of the Official Code of Georgia Annotated. 48 (3) 'Qualified contributions' means the preapproved contribution of funds by a taxpayer 49 to a qualified law enforcement foundation under the terms and conditions of this Code 50 section. 51 (4) 'Qualified expenditures' means expenditures made by a qualified law enforcement 52 foundation: 53 (A)(i) For salary supplements paid no more than twice annually or training provided 54 directly to law enforcement officers and other employees employed by the any local 55 law enforcement unit affiliated with such qualified law enforcement foundation; or 56 (ii) For the purchase, lease, maintenance, or improvement of equipment to be used 57 by such officers or employees; 58 (iii) For the purchase or lease of supplies and materials for technology updates, 59 including computer hardware and software; or 60 (iv) For the lease of facilities or purchase of goods or services to be used for the 61 promotion of community engagement; or 62 (B) To cover any costs incurred by the any local law enforcement unit affiliated with 63 such law enforcement foundation for the operation of an emergency response team that 64 combines law enforcement officers and behavioral health specialists, provided that such 65 costs shall not include salaries or other regular compensation. 66 (5) 'Qualified law enforcement foundation' means any law enforcement foundation that: 67 has been designated as the sole local law enforcement foundation for a single local law 68 enforcement unit and has been certified H. B. 266 - 3 - 25 HB 266/AP 69 (A) Has been certified and listed by the commissioner pursuant to subsection (d) of this 70 Code section; and 71 (B)(i) Has been designated as the law enforcement foundation for a local law 72 enforcement unit or combination of neighboring local law enforcement units; or 73 (ii) Is a law enforcement foundation which provides support to law enforcement state 74 wide. 75 (b)(1) The aggregate amount of tax credits allowed under this Code section shall not 76 exceed $75 million per calendar year. Each qualified law enforcement foundation shall 77 be limited to accepting $3 million per year of contributions made under this Code section. 78 (2) Subject to the aggregate limit provided in paragraph (1) of this subsection for taxable 79 years beginning on or after January 1, 2023, and ending on or before 80 December 31, 2027 2031, each taxpayer shall be allowed a credit against the tax imposed 81 by this chapter for qualified contributions made by the taxpayer as follows: 82 (A) In the case of a single individual or a head of household, the actual amount of 83 qualified contributions made or $5,000.00 per tax year, whichever is less; 84 (B) In the case of a married couple filing a joint return, the actual amount of qualified 85 contributions made or $10,000.00 per tax year, whichever is less; 86 (C) Anything to the contrary contained in subparagraph (A) or (B) of this paragraph 87 notwithstanding, in the case of an individual taxpayer who is a member of a limited 88 liability company duly formed under state law, a shareholder of a Subchapter 'S' 89 corporation, or a partner in a partnership, the actual amount of qualified contributions 90 it made or $10,000.00 per tax year, whichever is less; provided, however, that tax 91 credits pursuant to this paragraph shall only be allowed for the portion of the income 92 on which such tax was actually paid by such member of the limited liability company, 93 shareholder of a Subchapter 'S' corporation, or partner in a partnership; or 94 (D) A corporation or other entity not provided for in subparagraphs (A) through (C) 95 of this paragraph shall be allowed a credit against the tax imposed by this chapter, for H. B. 266 - 4 - 25 HB 266/AP 96 qualified contributions in an amount not to exceed the actual amount of qualified 97 contributions made or 75 75 percent of such corporation's or other entity's income tax 98 liability, whichever is less. 99 (3) Nothing in this Code section shall be construed to limit the ability of a local law 100 enforcement unit to receive gifts, grants, and other benefits from any source allowed by 101 law; provided, however, that no local law enforcement unit shall, under this Code section, 102 accept or receive more than $3 million in contributions in any calendar year. 103 (c) The commissioner shall establish a page on the department's public website for the 104 purpose of implementing this Code section. Such page shall contain, at a minimum: 105 (1) The application and requirements to be certified as a qualified law enforcement 106 foundation; 107 (2) The current list of all qualified law enforcement foundations and their affiliate law 108 enforcement units; 109 (3) The total amount of tax credits remaining and available for preapproval for each year; 110 (4) A web based method for taxpayers seeking the preapproval status for contributions; 111 and 112 (5) The information received by the department from each qualified law enforcement 113 foundation pursuant to paragraph (1) of subsection (g) except for division (g)(1)(B)(iv) 114 of this Code section. 115 (d) Any valid law enforcement foundation as a qualified law enforcement foundation shall 116 be certified by the commissioner following the commissioner's receipt of a properly 117 completed application and after the commissioner has confirmed that a single local law 118 enforcement unit has validly designated the applicant as its sole law enforcement 119 foundation; provided, however, that such designation shall not be required for an applicant 120 that provides support to law enforcement state wide. Such application shall be prescribed 121 by the commissioner and shall include an agreement by the applicant to fully comply with 122 the terms and conditions of this Code section. H. B. 266 - 5 - 25 HB 266/AP 123 (e)(1) Prior to making a contribution to any qualified law enforcement foundation, the 124 taxpayer shall request preapproval by electronically notify notifying the department, in 125 a manner specified by the commissioner, of the total amount of contribution that such 126 taxpayer intends to make to such qualified law enforcement foundation. 127 (2) Within 30 days after receiving a request for preapproval of contributions, the 128 commissioner shall preapprove, deny, or prorate requested amounts on a first come, first 129 served basis and shall provide notice to such taxpayer and the qualified law enforcement 130 foundation of such preapproval, denial, or proration. Such notices shall not require any 131 signed release or notarized approval by the taxpayer. The preapproval of contributions 132 by the commissioner shall be based solely on the availability of tax credits subject to the 133 limits established under paragraph (1) of subsection (b) of this Code section. 134 (3) Within 60 days after receiving the preapproval notice issued by the commissioner 135 pursuant to paragraph (2) of this subsection, the taxpayer shall contribute the preapproved 136 amount to the qualified law enforcement foundation or such preapproved contribution 137 amount shall expire. The commissioner shall not include such expired amounts in 138 determining the remaining amount amounts available under the aggregate limit limits 139 provided in paragraph (1) of subsection (b) of this Code section for the respective 140 calendar year. 141 (f)(1) Each qualified law enforcement foundation shall issue to each contributor making 142 a contribution pursuant to this Code section a letter of confirmation of contribution, 143 which shall include the taxpayer's name, address, tax identification number, the amount 144 of the qualified contribution, the date of the qualified contribution, and the total amount 145 of the credit allowed to the taxpayer. 146 (2) In order for a taxpayer to claim the tax credit allowed under this Code section, all 147 such applicable letters as provided for in paragraph (1) of this subsection shall be attached 148 to the taxpayer's tax return. When the taxpayer files an electronic return such 149 confirmation shall only be required to be electronically attached to the return if the H. B. 266 - 6 - 25 HB 266/AP 150 Internal Revenue Service allows such attachments to be affixed and transmitted to the 151 department. In any such event, the taxpayer shall maintain such confirmation and such 152 confirmation shall only be made available to the commissioner upon request. 153 (3) The commissioner shall allow tax credits for any preapproved contributions made to 154 a local qualified law enforcement foundation at the time the contributions were made if 155 such foundation was a qualified law enforcement foundation at the time of the 156 commissioner's preapproval of the contributions and the taxpayer has otherwise complied 157 with this Code section. 158 (4)(A) For the period beginning on July 1 and ending on December 31 of each year, 159 to the extent that the aggregate amount of tax credits authorized by subsection (b) of 160 this Code section has not been reached, the commissioner shall preapprove, deny, or 161 prorate additional requested amounts on a first come, first served basis and shall 162 provide notice to such taxpayer and the qualified law enforcement foundation of such 163 preapproval, denial, or proration. 164 (B) A taxpayer that is preapproved for the tax credit allowed pursuant to this Code 165 section during the period provided for in subparagraph (A) of this paragraph shall only 166 be allowed such credit in an amount that shall not exceed 95 percent of the amount 167 otherwise allowed pursuant to this Code section. 168 (g)(1) Each qualified law enforcement foundation shall annually submit to the 169 department: 170 (A) A complete copy of its IRS Form 990 and other applicable attachments, or for any 171 qualified law enforcement foundation that is not required by federal law to file an IRS 172 Form 990, such foundation shall submit to the commissioner equivalent information on 173 a form prescribed by the commissioner; and 174 (B) A report detailing the contributions received during the calendar year pursuant to 175 this Code section on a date determined by, and on a form provided by, the 176 commissioner which shall include: H. B. 266 - 7 - 25 HB 266/AP 177 (i) The total number and dollar value of individual contributions and tax credits 178 approved. Individual contributions shall include contributions made by those filing 179 income tax returns as a single individual or head of household and those filing joint 180 returns; 181 (ii) The total number and dollar value of corporate contributions and tax credits 182 approved; 183 (iii) The total number and dollar value of all qualified expenditures made; and 184 (iv) A list of contributors, including the dollar value of each contribution and the 185 dollar value of each approved tax credit. 186 (2) Except for the information published in accordance with paragraph (c) or (h) of this 187 Code section, all information or reports relative to this Code section that were provided 188 by qualified law enforcement foundations to the department shall be confidential taxpayer 189 information, governed by Code Sections 48-2-15, 48-7-60, and 48-7-61, whether such 190 information relates to the contributor or the qualified law enforcement foundation. 191 (h) Each qualified law enforcement foundation shall publish on its public website a copy 192 of its affiliated local law enforcement unit's prior year's annual budget containing the total 193 amount of funds received from its local governing body. If a qualified law enforcement 194 foundation does not maintain a public website, such information shall be otherwise made 195 available by the qualified law enforcement foundation to the public upon request. 196 (i)(1) A taxpayer shall not be allowed to designate or direct the taxpayer's qualified 197 contributions to a qualified law enforcement foundation pursuant to this Code section to 198 any particular purpose or for the direct benefit of any particular individual. 199 (2) A taxpayer that operates, owns, is affiliated with, or is a subsidiary of an association, 200 organization, or other entity that contracts directly with a qualified law enforcement 201 foundation or the any local law enforcement unit that is affiliated with a qualified law 202 enforcement foundation shall not be eligible for tax credits allowed under this Code 203 section for contributions made to such qualified law enforcement foundation. H. B. 266 - 8 - 25 HB 266/AP 204 (3) In soliciting contributions, no person shall represent or direct that, in exchange for 205 making qualified contributions to any qualified law enforcement foundation, a taxpayer 206 shall receive any direct or particular benefit. The status as a qualified law enforcement 207 foundation shall be revoked for any law enforcement foundation determined to be in 208 violation of this paragraph and shall not be renewed for at least two years. 209 (j)(1) Qualified contributions shall only be used for qualified expenditures. Each 210 qualified law enforcement foundation shall maintain accurate and current records of all 211 expenditures of qualified contributions and provide such records to the commissioner 212 upon his or her request. 213 (2) A qualified law enforcement foundation that fails to comply with any of the 214 requirements under this Code section shall be given written notice by the department of 215 such failure to comply by certified mail and shall have 90 days from the receipt of such 216 notice to correct all deficiencies. 217 (3) Upon failure of a qualified law enforcement foundation to correct all deficiencies 218 within 90 days pursuant to the requirements of paragraph (2) of this subsection, the 219 department shall revoke the law enforcement foundation's status as a qualified law 220 enforcement foundation and such entity shall be immediately removed from the 221 department's list of qualified law enforcement foundations. All applications for 222 preapproval of tax credits for contributions to such law enforcement foundation under this 223 Code section made on or after the date of such removal shall be rejected. 224 (4) Each law enforcement foundation that has had its status revoked and has been 225 delisted pursuant to this Code section, shall immediately cease all expenditures of funds 226 received relative to this Code section, and shall transfer all of such funds that are not yet 227 expended, to a properly operating qualified law enforcement foundation within 30 228 calendar days of its removal from the department's list of qualified law enforcement 229 foundations. H. B. 266 - 9 - 25 HB 266/AP 230 (k)(1) No credit shall be allowed under this Code section to a taxpayer for any amount 231 of qualified contributions that were utilized as deductions or exemptions from taxable 232 income. 233 (2) In no event shall the total amount of the tax credit under this Code section for a 234 taxable year exceed the taxpayer's income tax liability. Any No unused tax credit shall 235 be allowed the taxpayer against the succeeding three years' tax liability. No such credit 236 shall be allowed the taxpayer against prior years' tax liability. 237 (l) The commissioner shall promulgate rules and regulations necessary to implement and 238 administer the provisions of this Code section." 239 SECTION 3. 240 (a) Except as provided in subsection (b) of this section, this Act shall become effective on 241 July 1, 2025, and shall be applicable to all taxable years beginning on or after January 1, 242 2026. 243 (b) Section 1 of this Act shall become effective on January 1, 2027, and shall be applicable 244 to all taxable years beginning on or after January 1, 2027. 245 SECTION 4. 246 All laws and parts of laws in conflict with this Act are repealed.