diff --git a/CHANGELOG.md b/CHANGELOG.md
index 2ef64de6cd..8ffd444bdc 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -237,6 +237,26 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 
 ### Fixed
 
+- `DatabasePermission`
+  - Fixed `Equals()` method to compare both `State` and `Permission` properties.
+    Previously, the method incorrectly referenced a non-existent `Grant` property,
+    causing incorrect equality comparisons when instances had different `State`
+    values ([issue #2386](https://github.com/dsccommunity/SqlServerDsc/issues/2386)).
+  - Added `GetHashCode()` override to align with `Equals()` semantics, ensuring
+    consistent behavior when instances are used in hash-based collections
+    ([issue #2386](https://github.com/dsccommunity/SqlServerDsc/issues/2386)).
+- `ServerPermission`
+  - Fixed `Equals()` method to compare both `State` and `Permission` properties.
+    Previously, the method incorrectly referenced a non-existent `Grant` property,
+    causing incorrect equality comparisons when instances had different `State`
+    values ([issue #2386](https://github.com/dsccommunity/SqlServerDsc/issues/2386)).
+  - Added `GetHashCode()` override to align with `Equals()` semantics, ensuring
+    consistent behavior when instances are used in hash-based collections
+    ([issue #2386](https://github.com/dsccommunity/SqlServerDsc/issues/2386)).
+- Unit Tests
+  - Fixed misleading variable naming in ServerPermission.Tests.ps1 where
+    `$databasePermissionInstance` was used for `[ServerPermission]` objects.
+    All instances have been renamed to `$serverPermissionInstance`.
 - `Set-SqlDscServerPermission`
   - Fixed an issue where unspecified permission parameters would incorrectly
     revoke existing permissions. The command now only processes permission
diff --git a/source/Classes/002.DatabasePermission.ps1 b/source/Classes/002.DatabasePermission.ps1
index 175e5360e6..471f771192 100644
--- a/source/Classes/002.DatabasePermission.ps1
+++ b/source/Classes/002.DatabasePermission.ps1
@@ -183,7 +183,7 @@ class DatabasePermission : IComparable, System.IEquatable[Object]
 
         if ($object -is $this.GetType())
         {
-            if ($this.Grant -eq $object.Grant)
+            if ($this.State -eq $object.State)
             {
                 if (-not (Compare-Object -ReferenceObject $this.Permission -DifferenceObject $object.Permission))
                 {
@@ -195,6 +195,18 @@ class DatabasePermission : IComparable, System.IEquatable[Object]
         return $isEqual
     }
 
+    [System.Int32] GetHashCode()
+    {
+        [System.Int32] $hashCode = $this.State.GetHashCode()
+
+        foreach ($permission in ($this.Permission | Sort-Object))
+        {
+            $hashCode = $hashCode -bxor $permission.GetHashCode()
+        }
+
+        return $hashCode
+    }
+
     [System.Int32] CompareTo([Object] $object)
     {
         [System.Int32] $returnValue = 0
diff --git a/source/Classes/002.ServerPermission.ps1 b/source/Classes/002.ServerPermission.ps1
index 90febf7259..8cf88ac671 100644
--- a/source/Classes/002.ServerPermission.ps1
+++ b/source/Classes/002.ServerPermission.ps1
@@ -115,7 +115,7 @@ class ServerPermission : IComparable, System.IEquatable[Object]
 
         if ($object -is $this.GetType())
         {
-            if ($this.Grant -eq $object.Grant)
+            if ($this.State -eq $object.State)
             {
                 if (-not (Compare-Object -ReferenceObject $this.Permission -DifferenceObject $object.Permission))
                 {
@@ -127,6 +127,18 @@ class ServerPermission : IComparable, System.IEquatable[Object]
         return $isEqual
     }
 
+    [System.Int32] GetHashCode()
+    {
+        [System.Int32] $hashCode = $this.State.GetHashCode()
+
+        foreach ($permission in ($this.Permission | Sort-Object))
+        {
+            $hashCode = $hashCode -bxor $permission.GetHashCode()
+        }
+
+        return $hashCode
+    }
+
     <#
         TODO: It was not possible to move this to a parent class. But since these are
               generic functions for DatabasePermission and ServerPermission we
diff --git a/tests/Unit/Classes/DatabasePermission.Tests.ps1 b/tests/Unit/Classes/DatabasePermission.Tests.ps1
index 6a845c5646..3d15d94ab6 100644
--- a/tests/Unit/Classes/DatabasePermission.Tests.ps1
+++ b/tests/Unit/Classes/DatabasePermission.Tests.ps1
@@ -130,34 +130,64 @@ Describe 'DatabasePermission' -Tag 'DatabasePermission' {
         }
 
         Context 'When object has different value for property State' {
-            It 'Should instantiate two objects' {
-                $script:mockDatabasePermissionInstance1 = InModuleScope -ScriptBlock {
-                    Set-StrictMode -Version 1.0
+            Context 'When comparing Deny with Grant' {
+                It 'Should instantiate two objects' {
+                    $script:mockDatabasePermissionInstance1 = InModuleScope -ScriptBlock {
+                        Set-StrictMode -Version 1.0
 
-                    $databasePermissionInstance = [DatabasePermission]::new()
+                        $databasePermissionInstance = [DatabasePermission]::new()
 
-                    $databasePermissionInstance.State = 'Deny'
-                    $databasePermissionInstance.Permission = 'select'
+                        $databasePermissionInstance.State = 'Deny'
+                        $databasePermissionInstance.Permission = 'select'
 
-                    return $databasePermissionInstance
-                }
+                        return $databasePermissionInstance
+                    }
 
-                $script:mockDatabasePermissionInstance2 = InModuleScope -ScriptBlock {
-                    Set-StrictMode -Version 1.0
+                    $script:mockDatabasePermissionInstance2 = InModuleScope -ScriptBlock {
+                        Set-StrictMode -Version 1.0
 
-                    $databasePermissionInstance = [DatabasePermission]::new()
+                        $databasePermissionInstance = [DatabasePermission]::new()
 
-                    $databasePermissionInstance.State = 'Grant'
-                    $databasePermissionInstance.Permission = 'select'
+                        $databasePermissionInstance.State = 'Grant'
+                        $databasePermissionInstance.Permission = 'select'
 
-                    return $databasePermissionInstance
+                        return $databasePermissionInstance
+                    }
+                }
+
+                It 'Should return $false' {
+                    $mockDatabasePermissionInstance1 -eq $mockDatabasePermissionInstance2 | Should -BeFalse
                 }
             }
 
-            It 'Should return $false' {
-                # BUG: Equals only compares the Permission property not State.
-                # $mockDatabasePermissionInstance1 -eq $mockDatabasePermissionInstance2 | Should -BeFalse
-                $mockDatabasePermissionInstance1 -eq $mockDatabasePermissionInstance2 | Should -BeTrue
+            Context 'When comparing Grant with GrantWithGrant' {
+                It 'Should instantiate two objects' {
+                    $script:mockDatabasePermissionInstance1 = InModuleScope -ScriptBlock {
+                        Set-StrictMode -Version 1.0
+
+                        $databasePermissionInstance = [DatabasePermission]::new()
+
+                        $databasePermissionInstance.State = 'Grant'
+                        $databasePermissionInstance.Permission = 'select'
+
+                        return $databasePermissionInstance
+                    }
+
+                    $script:mockDatabasePermissionInstance2 = InModuleScope -ScriptBlock {
+                        Set-StrictMode -Version 1.0
+
+                        $databasePermissionInstance = [DatabasePermission]::new()
+
+                        $databasePermissionInstance.State = 'GrantWithGrant'
+                        $databasePermissionInstance.Permission = 'select'
+
+                        return $databasePermissionInstance
+                    }
+                }
+
+                It 'Should return $false' {
+                    $mockDatabasePermissionInstance1 -eq $mockDatabasePermissionInstance2 | Should -BeFalse
+                }
             }
         }
 
@@ -192,6 +222,62 @@ Describe 'DatabasePermission' -Tag 'DatabasePermission' {
         }
     }
 
+    Context 'When calling method GetHashCode()' {
+        Context 'When two objects are equal' {
+            It 'Should return the same hash code' {
+                InModuleScope -ScriptBlock {
+                    Set-StrictMode -Version 1.0
+
+                    $databasePermissionInstance1 = [DatabasePermission]::new()
+                    $databasePermissionInstance1.State = 'Grant'
+                    $databasePermissionInstance1.Permission = @('Select', 'Update')
+
+                    $databasePermissionInstance2 = [DatabasePermission]::new()
+                    $databasePermissionInstance2.State = 'Grant'
+                    $databasePermissionInstance2.Permission = @('Update', 'Select')
+
+                    $databasePermissionInstance1.GetHashCode() | Should -Be $databasePermissionInstance2.GetHashCode()
+                }
+            }
+        }
+
+        Context 'When two objects have different State' {
+            It 'Should return different hash codes' {
+                InModuleScope -ScriptBlock {
+                    Set-StrictMode -Version 1.0
+
+                    $databasePermissionInstance1 = [DatabasePermission]::new()
+                    $databasePermissionInstance1.State = 'Grant'
+                    $databasePermissionInstance1.Permission = 'Select'
+
+                    $databasePermissionInstance2 = [DatabasePermission]::new()
+                    $databasePermissionInstance2.State = 'Deny'
+                    $databasePermissionInstance2.Permission = 'Select'
+
+                    $databasePermissionInstance1.GetHashCode() | Should -Not -Be $databasePermissionInstance2.GetHashCode()
+                }
+            }
+        }
+
+        Context 'When two objects have different Permission' {
+            It 'Should return different hash codes' {
+                InModuleScope -ScriptBlock {
+                    Set-StrictMode -Version 1.0
+
+                    $databasePermissionInstance1 = [DatabasePermission]::new()
+                    $databasePermissionInstance1.State = 'Grant'
+                    $databasePermissionInstance1.Permission = 'Select'
+
+                    $databasePermissionInstance2 = [DatabasePermission]::new()
+                    $databasePermissionInstance2.State = 'Grant'
+                    $databasePermissionInstance2.Permission = 'Update'
+
+                    $databasePermissionInstance1.GetHashCode() | Should -Not -Be $databasePermissionInstance2.GetHashCode()
+                }
+            }
+        }
+    }
+
     Context 'When comparing two objects using method CompareTo()' {
         Context 'When the instance is compared against an invalid object' {
             It 'Should return a value less than zero' {
diff --git a/tests/Unit/Classes/ServerPermission.Tests.ps1 b/tests/Unit/Classes/ServerPermission.Tests.ps1
index b4185d517e..e4dc4a5426 100644
--- a/tests/Unit/Classes/ServerPermission.Tests.ps1
+++ b/tests/Unit/Classes/ServerPermission.Tests.ps1
@@ -71,12 +71,12 @@ Describe 'ServerPermission' -Tag 'ServerPermission' {
             $script:mockServerPermissionInstance = InModuleScope -ScriptBlock {
                 Set-StrictMode -Version 1.0
 
-                $databasePermissionInstance = [ServerPermission]::new()
+                $serverPermissionInstance = [ServerPermission]::new()
 
-                $databasePermissionInstance.State = 'Grant'
-                $databasePermissionInstance.Permission = 'ViewServerState'
+                $serverPermissionInstance.State = 'Grant'
+                $serverPermissionInstance.Permission = 'ViewServerState'
 
-                return $databasePermissionInstance
+                return $serverPermissionInstance
             }
         }
 
@@ -93,17 +93,17 @@ Describe 'ServerPermission' -Tag 'ServerPermission' {
                     InModuleScope -ScriptBlock {
                         Set-StrictMode -Version 1.0
 
-                        $databasePermissionInstance1 = [ServerPermission]::new()
+                        $serverPermissionInstance1 = [ServerPermission]::new()
 
-                        $databasePermissionInstance1.State = 'Grant'
-                        $databasePermissionInstance1.Permission = 'ViewServerState'
+                        $serverPermissionInstance1.State = 'Grant'
+                        $serverPermissionInstance1.Permission = 'ViewServerState'
 
-                        $databasePermissionInstance2 = [ServerPermission]::new()
+                        $serverPermissionInstance2 = [ServerPermission]::new()
 
-                        $databasePermissionInstance2.State = 'Grant'
-                        $databasePermissionInstance2.Permission = 'ViewServerState'
+                        $serverPermissionInstance2.State = 'Grant'
+                        $serverPermissionInstance2.Permission = 'ViewServerState'
 
-                        $databasePermissionInstance1 -eq $databasePermissionInstance2 | Should -BeTrue
+                        $serverPermissionInstance1 -eq $serverPermissionInstance2 | Should -BeTrue
                     }
                 }
             }
@@ -113,81 +113,167 @@ Describe 'ServerPermission' -Tag 'ServerPermission' {
                     InModuleScope -ScriptBlock {
                         Set-StrictMode -Version 1.0
 
-                        $databasePermissionInstance1 = [ServerPermission]::new()
+                        $serverPermissionInstance1 = [ServerPermission]::new()
 
-                        $databasePermissionInstance1.State = 'Grant'
-                        $databasePermissionInstance1.Permission = @('ViewServerState', 'AlterAnyAvailabilityGroup')
+                        $serverPermissionInstance1.State = 'Grant'
+                        $serverPermissionInstance1.Permission = @('ViewServerState', 'AlterAnyAvailabilityGroup')
 
-                        $databasePermissionInstance2 = [ServerPermission]::new()
+                        $serverPermissionInstance2 = [ServerPermission]::new()
 
-                        $databasePermissionInstance2.State = 'Grant'
-                        $databasePermissionInstance2.Permission = @('ViewServerState', 'AlterAnyAvailabilityGroup')
+                        $serverPermissionInstance2.State = 'Grant'
+                        $serverPermissionInstance2.Permission = @('ViewServerState', 'AlterAnyAvailabilityGroup')
 
-                        $databasePermissionInstance1 -eq $databasePermissionInstance2 | Should -BeTrue
+                        $serverPermissionInstance1 -eq $serverPermissionInstance2 | Should -BeTrue
                     }
                 }
             }
         }
 
         Context 'When object has different value for property State' {
+            Context 'When comparing Deny with Grant' {
+                It 'Should instantiate two objects' {
+                    $script:mockServerPermissionInstance1 = InModuleScope -ScriptBlock {
+                        Set-StrictMode -Version 1.0
+
+                        $serverPermissionInstance = [ServerPermission]::new()
+
+                        $serverPermissionInstance.State = 'Deny'
+                        $serverPermissionInstance.Permission = 'ViewServerState'
+
+                        return $serverPermissionInstance
+                    }
+
+                    $script:mockServerPermissionInstance2 = InModuleScope -ScriptBlock {
+                        Set-StrictMode -Version 1.0
+
+                        $serverPermissionInstance = [ServerPermission]::new()
+
+                        $serverPermissionInstance.State = 'Grant'
+                        $serverPermissionInstance.Permission = 'ViewServerState'
+
+                        return $serverPermissionInstance
+                    }
+                }
+
+                It 'Should return $false' {
+                    $script:mockServerPermissionInstance1 -eq $script:mockServerPermissionInstance2 | Should -BeFalse
+                }
+            }
+
+            Context 'When comparing Grant with GrantWithGrant' {
+                It 'Should instantiate two objects' {
+                    $script:mockServerPermissionInstance1 = InModuleScope -ScriptBlock {
+                        Set-StrictMode -Version 1.0
+
+                        $serverPermissionInstance = [ServerPermission]::new()
+
+                        $serverPermissionInstance.State = 'Grant'
+                        $serverPermissionInstance.Permission = 'ViewServerState'
+
+                        return $serverPermissionInstance
+                    }
+
+                    $script:mockServerPermissionInstance2 = InModuleScope -ScriptBlock {
+                        Set-StrictMode -Version 1.0
+
+                        $serverPermissionInstance = [ServerPermission]::new()
+
+                        $serverPermissionInstance.State = 'GrantWithGrant'
+                        $serverPermissionInstance.Permission = 'ViewServerState'
+
+                        return $serverPermissionInstance
+                    }
+                }
+
+                It 'Should return $false' {
+                    $script:mockServerPermissionInstance1 -eq $script:mockServerPermissionInstance2 | Should -BeFalse
+                }
+            }
+        }
+
+        Context 'When object has different value for property Permission' {
             It 'Should instantiate two objects' {
                 $script:mockServerPermissionInstance1 = InModuleScope -ScriptBlock {
                     Set-StrictMode -Version 1.0
 
-                    $databasePermissionInstance = [ServerPermission]::new()
+                    $serverPermissionInstance = [ServerPermission]::new()
 
-                    $databasePermissionInstance.State = 'Deny'
-                    $databasePermissionInstance.Permission = 'ViewServerState'
+                    $serverPermissionInstance.State = 'Grant'
+                    $serverPermissionInstance.Permission = 'ViewServerState'
 
-                    return $databasePermissionInstance
+                    return $serverPermissionInstance
                 }
 
                 $script:mockServerPermissionInstance2 = InModuleScope -ScriptBlock {
                     Set-StrictMode -Version 1.0
 
-                    $databasePermissionInstance = [ServerPermission]::new()
+                    $serverPermissionInstance = [ServerPermission]::new()
 
-                    $databasePermissionInstance.State = 'Grant'
-                    $databasePermissionInstance.Permission = 'ViewServerState'
+                    $serverPermissionInstance.State = 'Grant'
+                    $serverPermissionInstance.Permission = 'AlterAnyAvailabilityGroup'
 
-                    return $databasePermissionInstance
+                    return $serverPermissionInstance
                 }
             }
 
             It 'Should return $false' {
-                #BUG: Another instance where the compare function is not comparing the State parameter
-                $script:mockServerPermissionInstance1 -eq $script:mockServerPermissionInstance2 | Should -BeTrue
-                # $script:mockServerPermissionInstance1 -eq $script:mockServerPermissionInstance2 | Should -BeFalse
+                $script:mockServerPermissionInstance1 -eq $script:mockServerPermissionInstance2 | Should -BeFalse
             }
         }
+    }
 
-        Context 'When object has different value for property Permission' {
-            It 'Should instantiate two objects' {
-                $script:mockServerPermissionInstance1 = InModuleScope -ScriptBlock {
+    Context 'When calling method GetHashCode()' {
+        Context 'When two objects are equal' {
+            It 'Should return the same hash code' {
+                InModuleScope -ScriptBlock {
                     Set-StrictMode -Version 1.0
 
-                    $databasePermissionInstance = [ServerPermission]::new()
+                    $serverPermissionInstance1 = [ServerPermission]::new()
+                    $serverPermissionInstance1.State = 'Grant'
+                    $serverPermissionInstance1.Permission = @('ViewServerState', 'AlterAnyAvailabilityGroup')
 
-                    $databasePermissionInstance.State = 'Grant'
-                    $databasePermissionInstance.Permission = 'ViewServerState'
+                    $serverPermissionInstance2 = [ServerPermission]::new()
+                    $serverPermissionInstance2.State = 'Grant'
+                    $serverPermissionInstance2.Permission = @('AlterAnyAvailabilityGroup', 'ViewServerState')
 
-                    return $databasePermissionInstance
+                    $serverPermissionInstance1.GetHashCode() | Should -Be $serverPermissionInstance2.GetHashCode()
                 }
+            }
+        }
 
-                $script:mockServerPermissionInstance2 = InModuleScope -ScriptBlock {
+        Context 'When two objects have different State' {
+            It 'Should return different hash codes' {
+                InModuleScope -ScriptBlock {
                     Set-StrictMode -Version 1.0
 
-                    $databasePermissionInstance = [ServerPermission]::new()
+                    $serverPermissionInstance1 = [ServerPermission]::new()
+                    $serverPermissionInstance1.State = 'Grant'
+                    $serverPermissionInstance1.Permission = 'ViewServerState'
 
-                    $databasePermissionInstance.State = 'Grant'
-                    $databasePermissionInstance.Permission = 'AlterAnyAvailabilityGroup'
+                    $serverPermissionInstance2 = [ServerPermission]::new()
+                    $serverPermissionInstance2.State = 'Deny'
+                    $serverPermissionInstance2.Permission = 'ViewServerState'
 
-                    return $databasePermissionInstance
+                    $serverPermissionInstance1.GetHashCode() | Should -Not -Be $serverPermissionInstance2.GetHashCode()
                 }
             }
+        }
 
-            It 'Should return $false' {
-                $script:mockServerPermissionInstance1 -eq $script:mockServerPermissionInstance2 | Should -BeFalse
+        Context 'When two objects have different Permission' {
+            It 'Should return different hash codes' {
+                InModuleScope -ScriptBlock {
+                    Set-StrictMode -Version 1.0
+
+                    $serverPermissionInstance1 = [ServerPermission]::new()
+                    $serverPermissionInstance1.State = 'Grant'
+                    $serverPermissionInstance1.Permission = 'ViewServerState'
+
+                    $serverPermissionInstance2 = [ServerPermission]::new()
+                    $serverPermissionInstance2.State = 'Grant'
+                    $serverPermissionInstance2.Permission = 'AlterAnyAvailabilityGroup'
+
+                    $serverPermissionInstance1.GetHashCode() | Should -Not -Be $serverPermissionInstance2.GetHashCode()
+                }
             }
         }
     }