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.
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The Georgia State House on Thursday voted unanimously to pass a bill that will accelerate the tax cuts previously passed by the Georgia General Assembly in 2022 alongside bills aimed at lowering property taxes and increasing child tax credits.
HB 1015 will reduce the Georgia state income tax rate to 5.39 percent, effective retroactively to January 1, amending previous legislation that established a flat income tax in Georgia that would be set at 5.49 percent in 2024. Active legislation mandates the income tax rate be decreased by 10 basis points annually until it reaches 4.99 percent, which could be achieved in 2028 if the bill becomes law.
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A Democratic state legislator quietly filed a bill in late November for the upcoming legislative session that would eliminate the state’s income tax by 2025.
Georgia State Representative Eric Bell (D-Jonesboro) filed HB 559 to “repeal the state income tax in its entirety,” along with any tax credits or conflicting laws. Just two pages long, Bell’s bill would declare, “For taxable years beginning on or after January 1, 2025, no income taxes whatsoever shall be levied or collected by the state or any political subdivision thereof and no income tax returns shall be required to be filed for such taxable years.”
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Georgia’s December 2022 tax revenues hit $3.21 billion, up $224.9 million and 7.5 percent higher than the same month in 2021 despite decreases in fuel tax and personal income tax revenues.
The report also marks the first six months of Fiscal Year 2023.
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The time has come to abolish the Georgia state income tax.
Sen. David Perdue was exactly right in proposing to eliminate the state income tax. He was also right in suggesting that he could work with the Georgia state legislature and find ways to return money to the people of Georgia rather than focusing it on the state bureaucracies.
The money is clearly there. The Atlanta Journal Constitution reported, “Despite pandemic, Georgia ends fiscal year with a record $3.2 billion jump in revenue.” The article went on to note, “The state saw revenue grow 13.5% over 2020. … Besides the boon in state tax collections, Georgia is also receiving about $4.7 billion or so from the latest federal COVID-19 relief plan.”
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New laws that will cut income taxes for Georgians and increase tax incentives for businesses go into effect Thursday with the start of a new fiscal year.
Dubbed the Tax Relief Act of 2021, House Bill 593, raises the standard deduction on state income tax returns for a single taxpayer by $800 to $5,400 and by $1,100 to $7,100 for a married couple filing a joint return, starting in the 2022 tax year.
HB 593 created the second tax cut of its kind in three years. It will cut income taxes by more than $600 million collectively over the next five years. The Georgia Legislature doubled the state’s standard deduction under the Tax Cuts and Jobs Act in Georgia in 2018.
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