Tax collections in Georgia decreased by about 4 percent in February. The change was driven by sharp decreases in the state’s income tax revenues following Republican-led tax cuts, though Georgia simultaneously saw increased revenue from sales taxes and taxes on corporations.
A press release from the office of Governor Brian Kemp notes the state’s tax revenues fell 4.3 percent in February while the year’s tax collections are down 3.1 percent to date.
According to the governor’s office, the February decrease was driven by a $205 million decline in the state’s income tax collections. Georgia collected in collected $1.08 billion in February 2023, while last month the state saw just $878.8 million in income tax revenues.
The $200 million decrease, per Kemp’s office, was largely driven by $159.8 million in tax refunds, but the governor acknowledged withholding payments and all other income tax categories were also down in Georgia.
While income tax receipts were down, the governor’s office reported that collections for other taxes saw significant increases.
Sales tax revenues increased 3.2 percent, corporate income taxes saw an 84.4 percent increase, gas tax revenues grew by 48.4 percent, and revenues from vehicle tag and title fees increased by about 1 percent.
Explaining the significant increase to the state’s income tax collections, Kemp’s office noted increases to income tax payments to corporation were up more than 140 percent and all other corporate tax types were up more than $30 million.
Kemp announced last December that Republicans would introduce legislation to accelerate the governor’s planned income tax cuts, and the Georgia House approved the bill unanimously last month.
While the average middle class family is unlikely to see much savings from the legislation, the governor’s plan would speed up decreases to the state’s income tax rate that are scheduled to continue until it reaches 4.99 percent in 2028.
Lawmakers in the House also unanimously approved legislation that would double Georgia’s homestead property tax exemption and increase the state’s child income tax reduction from $3,000 to $4,000.
The governor endorsed the plan to accelerate tax cuts after Georgia revealed last year that it had $11 billion in cash reserves, the constitutional limit of $5.4 billion in the state’s rainy day fund, and $2 billion in its lottery reserve fund, which the governor’s office said left the state poised to return tax money or lower taxes.
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Tom Pappert is the lead reporter for The Tennessee Star, and also reports for The Georgia Star News, The Virginia Star, and The Arizona Sun Times. Follow Tom on X/Twitter. Email tips to [email protected].
Photos “Gov Brian Kemp” by Gov. Brian Kemp.
