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What is the scope of the exemption?
The sale or use of qualifying construction materials used in capital outlay projects for educational purposes is exempt from local sales and use taxes only. The exemption does not apply to state sales and use tax.
“Qualifying construction materials” are any materials used in the construction of a capital outlay project for educational purposes that will remain as part of such project after completion of construction or that become incorporated into such project's real property. Such term does not include any materials that remain in the possession of a contractor after the completion of construction. (1)
A “capital outlay project for educational purposes” is a project that:
(I) was approved and funded through a sales tax for educational purposes authorized pursuant to Article VIII, Section VI, Paragraph IV of the Constitution of Georgia; and
(II) is for a local school system which has in effect a base year value homestead exemption or adjusted base year value homestead exemption from ad valorem taxation for educational purposes for all residents of the local school system. (2)
Footnotes
(1) O.C.G.A. § 48-8-3(10.1)(D)(iii).
(2) O.C.G.A. § 48-8-3(10.1)(D)(i). -
What are the effective dates of the exemption?
The exemption begins on April 1, 2025 and will be automatically repealed on December 31, 2033.
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How will the exemption be administered?
The Department will administer this exemption by refund only. The benefit of the exemption may be claimed only by the local school system for which the qualifying construction materials were used. To claim the exemption, the local school system must file a request for refund with the Department within three years following the date the tax was paid to the Department.
Contractors are not permitted to claim the benefit of this exemption. Contractors must pay state and local sales and use taxes when purchasing or using qualifying construction materials.
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Will interest be paid on refunds of tax?
No. Refunds will not include interest.
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How will qualifying local school systems file a claim for refund?
Local school systems required to file electronically under Department Rule 560-3-2-.26 must file a claim for refund through their Georgia Tax Center (GTC) account. If not required to file electronically, a local school system may mail a claim for refund to: Georgia Department of Revenue, 2595 Century Parkway NE, Suite 317, Atlanta, GA 30345-3173.
SUT-2025-01- Sales and Use Tax Exemptions for School Construction
Publication Date: October 28, 2025
Authority
O.C.G.A. §§ 48-2-7, 48-2-35, 48-2-35.1, and 48-8-3(10.1).
Purpose
This Policy Bulletin provides guidance related to the sales and use tax exemption codified at O.C.G.A. § 48-8-3(10.1) for the sale or use of qualifying construction materials used in capital outlay projects for educational purposes.
Scope
A Policy Bulletin is intended to provide guidance to the public and to Department personnel. It is a written statement issued to apply principles of law to a specific set of facts or a general category of taxpayers, superseding all conflicting documents and oral directives previously issued by the Department. A Policy Bulletin does not have the force or effect of law and is not binding on the public. It is, however, the Department's position and is binding on agency personnel until superseded or modified by a change in statute, regulation, court decision, or subsequent Policy Bulletin.