The Georgia Senate overwhelmingly passed income tax cut legislation Friday with significant differences from a bill the state House adopted last month.
The Senate bill, which passed 51-4, calls for gradually reducing Georgia’s income tax rate from the current 5.75% to 4.99%. However, that lower rate would only apply to taxable income up to $20,000 in 2024, the first year the law would take effect.
The lower rate would apply to the first $35,000 of taxable income in 2025 and to the first $55,000 of taxable income in 2026.
The House bill would set the tax rate at a flat 5.25% for the vast majority of taxpayers effective in 2024.
The Senate bill also includes a trigger requiring state tax revenues to grow by at least 3% each year for the tax reductions to continue.
Democratic lawmakers blasted the House bill last month, citing figures showing 28% of Georgia taxpayers would not see a change in their tax bills, while 10% actually would pay more in taxes.
On the other hand, the Senate bill contains a state-level Earned Income Tax Credit, a benefit for low-income families legislative Democrats and some Republicans have supported.
“We don’t want to have a flat tax increase on those who are low income,” Senate Finance Committee Chairman Chuck Hufstetler, R-Rome, said Friday.
The progressive Georgia Budget and Policy Institute released a statement earlier this week calling the Senate tax cut less regressive and more supportive of Georgia families than the House version.
Hufstetler’s committee also proposed capping the state’s hugely successful film tax credit at $900 million a year. However, the Senate Rules Committee reversed course and removed the provision from the bill.
The legislation now heads back to the House. With such substantial differences, House and Senate leaders will face a tough challenge reaching agreement on the bill. The General Assembly is scheduled to adjourn for the year on Monday.
This story is available through a news partnership with Capitol Beat News Service, a project of the Georgia Press Educational Foundation.