Republican state Sen. Bo Hatchett speaks on the Senate floor on Thursday, March 21, 2025. (Matthew Pearson/WABE)
The Georgia Senate passed several tax measures this week, including a bill lowering state income tax that received significant pushback from Democrats.
House Bill 111 would lower this year’s flat state income tax rate from 5.29% to 5.19%.
This would accelerate an existing annual cut. In 2022, Georgia Gov. Brian Kemp signed HB 1437, which provided for a cut from 5.75% to 5.49% as of January 2024 and a 0.1% annual reduction thereafter until the income tax rate reaches 4.99%. Then, in 2024, Kemp signed HB 1015 to further reduce the rate of tax year 2024 to 5.39%.
Republican state Sen. Bo Hatchett, who is sponsoring the bill in the Senate, said the acceleration in tax cuts would save Georgians $869 million.
“While other states are raising taxes on their citizens at a time when they’re facing sky-high prices and can least afford it, we are doing the opposite here in Georgia,” he said on the Senate floor Thursday. “We’re putting money back in the hands of Georgians, which this bill, HB 111, does.”
State Sen. Elena Parent called the bill a “gimmick” and a “tax cut for the rich dressed up in some pretty language.”
According to Parent, the bottom 20% of earners will save $10 on average, the next 20% of earners will save $32, the middle 20% will save $70, the fourth 20% will save $156 dollars and the top 1% will save $3,000 or more.
“This legislation will cost $748 million. Only 33% of it will go to 80% of Georgians; 67% of it will go to the top 20%,” she said. “It’s a tax cut for the rich. It delivers outsized benefits to Georgians already at the top of the income ladder who earn the highest incomes.”
State Sen. Derek Mallow and other Democratic senators spoke in opposition to HB 111 on Thursday, March 21, 2025. (Matthew Pearson/WABE)
Republican state Sen. Blake Tillery said the figures quoted by Democrats are “skewed” because the highest-income earners pay the most taxes. Individuals making more than $1 million pay $2.1 billion of the $16 billion Georgia receives in tax revenue, according to Tillery.
“They’re carrying the weight of one-eighth of the income tax total,” he said.
The Senate voted 30-23, and the bill goes to Kemp’s desk for him to sign into law.
Senators also unanimously passed HB 112, giving a one-time tax credit to taxpayers who filed tax returns for 2023 and 2024.
“I have always been a proponent of eliminating our state income tax and putting money back in taxpayer pockets,” Republican Lt. Gov. Burt Jones said in a statement released after the vote. “The final passage of these two measures today brings us one step closer to eliminating the state income tax, while providing tax relief for Georgia families and businesses. I want to thank Governor Kemp for leading this effort and the Senate and the House for working on legislation to deliver this tax relief to the people of Georgia.”
On Friday, the Georgia Senate also passed HB 266 to exempt all income received from military retirement benefits from taxation. Currently, retired service members under 62 can be exempt from state income taxes on the first $17,500 they receive as part of military retirement benefits. The bill goes back to the House for final approval before going to Kemp.
