(The Center Square) – Gradual elimination of Georgia’s state income tax and removal of a long list of corporate tax credits have been recommended by the Finance Committee in the Senate.
Senate Bill 476 increases the standard deduction for married couples from $24,000 to $100,000 and from $12,000 to $50,000 for single filers. The bill also includes Gov. Brian Kemp’s plan to reduce the state income tax rate to 4.99% beginning with the 2026 tax year.
Slashing some corporate tax breaks would make up the lost revenue from the income tax, Sen. Blake Tillery, R-Vidalia, told the committee. Some of the cuts are to little-known sales tax credits like a “yacht tax credit” on boat parts.
Pandemic-era tax breaks that give companies $1,250 per job for telework and $1,250 per job for personal protective equipment are also on the chopping block. Kemp ended a 15-month emergency declaration nearly five years ago on June 30, 2021.
Lawmakers have discussed eliminating concessions for data centers since 2024. The bill would cut two tax credits, one for new data centers and one for computer equipment.
“The University of Georgia Carl Vinson Institute said that at least 70% of them would have come anyway and that we were giving our money away,” said Chairman Chuck Hufstetler, R-Rome. “And like I said earlier, that’s one whole month of income taxes to gave a small group that credit.”
Hufstetler has introduced a separate bill to eliminate tax relief for data centers.
The bill also reduces an affordable housing credit. Georgia was giving a 100% break on a federal tax credit, which the bill reduces to 50%.
“We could not find a state that was more generous than the 50% number other than Georgia, so we are an outlier,” Tillery said.
The bill covers the first two years of a six-year plan to eliminate the state income tax to zero, according to Tillery.
Sen. Nan Orrock, D-Atlanta, was one of three Democrats who voted against the bill.
“I think the truth about this bill is that the rate reduction favors the wealthy,” Orrock said.
The House has introduced tax cuts focused on slashing property taxes. House Speaker Jon Burns, R-Newington, is proposing eliminating homestead property taxes. The state does not receive property tax revenue – it is used to fund cities, counties and school boards.
Tillery said the Senate wants to work with its House colleagues.
“A lot of the media have made a fuss about we have to pick either property tax relief or income tax relief,” Tillery said. “That’s simply not the case.”
Rep. Beth Camp, R-Concord, has amended a bill that would have provided a tax exemption for manufactured homes to mirror Senate Bill 476. The committee substituted the House bill in its final vote because the state constitution requires that revenue bills originate in the House.
A separate bill would reduce the income tax rate to 3.99% by 2028 if certain revenue triggers are hit.
The governor does not speak on pending legislation, TCS was told by his office, but he “looks forward to working alongside legislative leaders to deliver meaningful tax relief for all Georgians.”