Gov. Nathan Deal is backing a plan to reduce billions of dollars in state tax revenue Georgia could get because of the recent federal tax overhaul.
The legislation would allow Georgians to itemize their state tax deductions, even if they take the standard federal deduction.
Wesley Tharpe, with the Georgia Budget and Policy Institute, says that’s a big change to the state’s current tax rules.
“If you take the federal standard deduction, you have to take Georgia’s standard deduction and vice versa. If you itemize federally, you have to itemize on your Georgia return,” he said.
The bill would also increase personal tax exemptions by 25 percent.
Estimates say Georgians could be on the hook for an additional $3.6 billion in state taxes over the next five years because of the tax overhaul.
The governor’s office said previously Deal wanted to leave the issue for lawmakers to address next year. But Deal signaled last week he wanted to find a way to reduce the state tax burden for Georgians.
Tharpe says the state should consider hanging onto the additional money it’s expecting to collect.
“Georgia may be facing a need — it’s not guaranteed — but sometime over the next couple of years may need some of those extra dollars to provide the kinds of services that Georgians have come to expect and rely on,” he said.
If it passes, the proposed legislation would affect tax filing starting in 2019. A different bill is handling changes to tax laws for this tax season.