How an affordable housing bill became a tax break for the Georgia forestry industry

Before it became a forestry industry tax break, House Bill 134 was an income tax cut for ordinary Georgians. Before that, it was sales tax break for mobile home buyers.

Such transformations are common in the state Legislature. HB 134’s winding path to Gov. Brian Kemp’s desk shows how legislative sausage is made.

An analysis by The Atlanta Journal-Constitution found state lawmakers this year approved $3 in new tax breaks for every $1 they eliminated. Here’s a look at how one tax break came to pass.

Original intent: Affordable housing

HB 134 was born in January 2025 as a sales tax break for manufactured home buyers. Rep. Beth Camp, R-Concord, the bill’s sponsor, told lawmakers she wanted to address the need for affordable housing.

As passed by the House of Representatives, the bill exempted 50% of the sale price of manufactured homes from local sales taxes if the owner certifies the home will be kept at a permanent location within 30 days of sale. Though it passed a Senate committee, the full Senate did not take it up before the Legislature adjourned last year.

Income tax politics

HB 134 was still alive. Bills introduced in the first year of the two-year legislative session are eligible for consideration in the second.

But the bill was caught up in election-year politics. Lt. Gov. Burt Jones pledged to eliminate Georgia’s individual income tax, and in February he unveiled his plan for a down payment on that pledge.

Jones’ plan, laid out in Senate Bill 476, would lower the income tax rate, raise the standard deduction and eliminate a slew of tax breaks to partially make up for the lost revenue.

But there was a problem. The Georgia Constitution requires all bills raising revenue to originate in the House. SB 476 was a Senate bill. So, senators decided to preempt any House objections by stripping a bill that had originated in the House of its contents and replacing it with the contents of SB 476. They just needed to pick a House bill to “gut and replace.”

HB 134 proved a tempting target. A Senate committee stripped out the tax break for manufactured homes and replaced it with Jones’ income tax proposal. Then the Senate sent both SB 476 and HB 134 to the House.

Forestry finale

Kemp and House Speaker Jon Burns were skeptical of the Senate income tax proposal. Neither bill went anywhere in the House, though income tax negotiations continued.

Meanwhile, the House did some gutting and replacing of its own.

On March 31 — the second-to-last day of the legislative session — the full House took up HB 134. Rep. Jesse Petrea, R-Savannah, proposed an amendment that stripped out the income tax proposal.

In its place was Petrea’s proposal to allow forestry manufacturing firms to claim some state tax credits. The bill also allows such firms to sell or transfer the credits and puts a $250 million cap on the aggregate amount of their credits over five years.

The bill passed the House by an overwhelming margin. The Senate passed the House version unanimously that night.

Gut. Replace. Repeat.

Camp’s proposed tax break for manufactured homes eventually passed as House Bill 165, which awaits Kemp’s signature.

HB 165 started as a proposal to eliminate unrelated tax breaks, then became an income tax deduction for disaster losses before its final form as the manufactured home tax break.