The State of Georgia’s Income Tax

This upcoming legislative session will be the third year in a row Georgia has been presented with a massive surplus, which is a result of state taxes bringing in significantly more revenue than expected. Initially, it was believed to be a temporary situation due to economic conditions in the country. But after three years in a row with a surplus, some are starting to doubt that this level of revenue collection for the state is an anomaly.

Per House Bill 1437, passed in 2022, Georgia's income tax is set to automatically reduce by 0.1% per year beginning in 2024 until 2029. With a starting rate of 5.49% and a final rate of 4.99%, some have suggested, following reports of a massive $10.7 billion state surplus, that this is too slow of a decrease considering our high revenues.

Lt. Gov. Burt Jones is one of those who is calling for further reduction of the state income tax, having run for his position on the message of completely eliminating the state income tax.

"It's time to look at ways to cut the state income tax and return more money back to Georgia families while continuing to balance our budget and remain fiscally responsible," 
said Lt. Gov. Burt Jones.

The conservative Georgia Freedom Caucus also echoed Lt. Gov. Jones' call for further tax cuts by stating, "With another massive surplus, there is no excuse to not pass a large tax cut during next year's legislative session."

Given the surplus and many political leaders calling for such, it is a certainty that there will be an attempt to cut taxes for Georgians, led by Lt. Gov. Jones. For the past two years, there have been one-time tax refunds passed at the direction of Gov. Kemp — returning the people's money back to them. A reduction in the income tax would permanently accomplish the same thing.

It will be an enthralling environment under the Gold Dome, as political leaders try to decide how much money to give back to the people versus how much they will spend. The initial proposal for how to use the money will originate from the governor's office, but for his plan to be implemented, the House and Senate must agree. If Gov. Kemp's budget proposal does not account for an additional tax reduction as Lt. Gov. Jones has called for, they might find themselves at odds, leading to a most interesting 2024 legislative session.