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Subcommittee hears proposal to exempt construction materials for nonprofit affordable-housing projects
Summary
Supporters said exempting sales tax on materials would lower per-unit costs for nonprofit and workforce housing projects; county associations cautioned against shifting tax burdens.
Representative Franklin presented House Bill 165 (LC500947), a proposal to exempt sales tax on materials used to construct or renovate affordable and workforce housing when a qualifying nonprofit developer is the owner. Franklin said the bill would be offset by removing three other existing credits or exemptions from the tax code.
Elizabeth Apley, an attorney representing a coalition including House ATL and Enterprise Community Partners Southeast, told the committee that Georgia faces a persistent housing shortage and that the exemption would be a narrowly tailored way to increase production of affordable housing. She said similar exemptions exist in many other states and estimated that the exemption could yield $8,400–$10,000 in sales-tax savings per affordable house built, a figure cited by Habitat for Humanity in supporting correspondence provided to the committee.
Natalie Kizer of House ATL and Ron Kirkpatrick of Historic District Development Corporation described local development examples and said construction costs and market-rate pricing squeeze nonprofit affordability efforts. Austin Hackney of the Home Builders Association of Georgia also testified in support, saying reducing taxes on materials affects the “lumber” component in housing costs and can help build more units.
The Association County Commissioners of Georgia (ACCG) opposed broad exemptions, warning that “taxes do not disappear — they only shift.” ACCG said the exemption would erode the sales-tax base and picked winners and losers among taxpayers.
Committee members asked authors for clarification: several requested a precise definition of “affordable housing” and more detailed fiscal estimates; the author said a fiscal note is expected before any motion. The bill did not receive a vote at this session and will return for further drafting and fiscal analysis.
