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In a decisive move, the Georgia State Senate has green-lighted a pair of sweeping tax reform bills aimed at significantly reducing state income taxes. This legislative action promises to return substantial sums to taxpayers, thanks to a budget surplus that Georgia is currently enjoying.
Residents who submit their state tax returns for the years 2023 and 2024 could see a windfall, with the state’s surplus tax refund program potentially returning up to $500 to eligible filers. This initiative is part of a broader effort to use the surplus for direct taxpayer relief.
At the heart of these reforms is Senate Bill 476, which plans to exempt the first $50,000 of taxable income for individual filers and $100,000 for married couples filing jointly. Advocates of this bill highlight its potential to reduce income taxes for approximately two-thirds of Georgia’s taxpayers, offering significant relief to many households.
Complementing this measure is Senate Bill 477, which proposes a gradual reduction of Georgia’s flat personal income tax rate. The plan is to decrease the rate by 0.5% annually, aiming for it to dip just below 4% by 2028. Supporters of the bill argue that this reduction, alongside the exemptions, will effectively boost residents’ take-home pay while simultaneously scaling back certain corporate tax incentives.
Proponents of these tax reforms assert that the combined effect will not only alleviate the financial burden on individuals but also stimulate economic activity within the state, providing a much-needed boost to the local economy.
“We thought that the people of Georgia should have more of their money,” said Marty Harbin (R–West Central Georgia). “And I believe that ultimately, it will help the economy, because I think the people know better how to spend their money than the government does.”
Harbin added that future tax reductions would depend on whether the state continues to post budget surpluses.
“When there’s a surplus, we’ll make a move. If there’s not a surplus, we won’t move,” he said. “But a continual reduction in that, I think, makes a lot of sense.”
Not all lawmakers support the proposal.
Some Democrats warned that rolling back corporate tax credits could make Georgia less attractive to businesses and potentially impact jobs.
“Over the last 20 years, we’ve used tax credits to attract businesses,” said Harold Jones II (D–Augusta). “Once you get rid of those particular tax credits, you risk losing the jobs tied to them.”
Critics also cautioned that deep income tax cuts could affect funding for roads, schools and prisons if revenue declines.
Georgia collects about $16 billion annually from the state income tax, roughly half of its total state revenue.
Supporters argued the move would help Georgia remain competitive with other states. Eight states, including Florida and Tennessee, do not levy a state income tax.
The bills now move to the Georgia House of Representatives, where lawmakers could amend the legislation before Crossover Day on March 6.
If approved by the House and signed into law, the changes would mark one of the most significant shifts in Georgia’s tax structure in decades.