What Are Georgia’s Taxes on Income, Sales, and Property?

Georgia’s tax framework is composed of several taxes levied by state and local governments, each with its own rules and rates. Understanding these obligations is part of financial management for individuals and businesses in the state. The state government is the primary authority for certain taxes, while local jurisdictions, such as counties and cities, have the power to levy their own, creating a layered tax structure.

Georgia Individual Income Tax

Georgia has transitioned to a single, flat-rate income tax. For the 2024 tax year, all taxable net income is taxed at a rate of 5.39%. This rate is scheduled for potential annual reductions, with a target of reaching 4.99% in subsequent years, contingent upon state revenue performance.

To determine taxable income, taxpayers can reduce their adjusted gross income by the state’s standard deduction. For the 2024 tax year, the standard deduction is $24,000 for those who are married and filing a joint return, and $12,000 for individuals with single, head of household, or married filing separately status.

The general personal exemption for the taxpayer and spouse has been eliminated, but a dependent exemption remains. Taxpayers can claim a $4,000 exemption for each qualifying dependent, which directly reduces their taxable income.

Georgia offers several tax credits that can reduce a taxpayer’s liability. The Child and Dependent Care Expense Credit allows taxpayers to claim a credit equal to 30% of the corresponding federal credit. Another notable credit is the Qualified Education Expense Credit, which provides a credit for donations made to student scholarship organizations.

Full-year and part-year residents who itemize deductions on their federal return are entitled to a Georgia Resident Itemizer Tax Credit of up to $300. This credit provides a benefit to those who may not receive the full advantage of their itemized deductions under the flat tax structure.

A full-year resident is an individual legally domiciled in Georgia for the entire year and is taxed on all income, regardless of where it was earned. You are required to file a Georgia return if your income exceeds the standard deduction for your filing status or if you are required to file a federal return.

A part-year resident is an individual who moved into or out of Georgia during the tax year. These individuals are taxed on all income earned while a resident of Georgia, plus any income from Georgia sources during their period of non-residency. Nonresidents are also required to file a Georgia tax return if they have income derived from Georgia sources, such as wages or rental property income, and are taxed only on their Georgia-sourced income.

Georgia Sales and Use Tax

Georgia imposes a statewide sales tax on the purchase of most tangible personal property and some services, with a state-level rate of 4%. This tax is collected by retailers at the point of sale and remitted to the Georgia Department of Revenue.

Beyond the state rate, local jurisdictions are authorized to levy their own additional sales taxes. Common local taxes include the Local Option Sales Tax (LOST), used to fund general government operations, and the Special Purpose Local Option Sales Tax (SPLOST), a voter-approved tax for capital projects like roads and parks.

The combination of state and local taxes means the total sales tax rate can vary, with some areas having a combined rate as high as 9%. Businesses are responsible for collecting the correct combined rate based on the customer’s delivery address under Georgia’s destination-based sales tax system.

Georgia law provides exemptions for certain items. Most sales of food and food ingredients for off-premises consumption are exempt from the 4% state sales tax but remain subject to any applicable local sales taxes. Prescription drugs and certain medical equipment are fully exempt from state and local sales tax.

Use tax is due when taxable goods are purchased from a seller who does not collect Georgia sales tax, and those items are then used in Georgia. This commonly applies to purchases from out-of-state online retailers. The use tax rate is the same as the sales tax rate in the purchaser’s jurisdiction, and the buyer must report and remit the tax to the Department of Revenue.

Georgia Property Tax

Property tax in Georgia is administered and collected at the local level by county and city governments; there is no state-level property tax. These taxes are a primary source of funding for local public services, including schools and law enforcement.

The calculation begins with the Fair Market Value (FMV) of the property, which is determined by county tax assessors. By law, property in Georgia is then assessed for tax purposes at 40% of its FMV. This 40% figure is known as the assessed value.

The assessed value is multiplied by the local millage rate to determine the tax due. A millage rate is expressed in mills, where one mill equals $1 of tax for every $1,000 of assessed value. For example, a millage rate of 25 mills translates to a tax of $25 for each $1,000 of assessed value.

To reduce the tax burden, Georgia offers several homestead exemptions for an owner-occupied primary residence. The standard homestead exemption reduces the assessed value by $2,000. A homeowner must own and occupy the home on January 1 of the tax year and file an application with their county tax office by the April 1 deadline.

Additional homestead exemptions are available for certain individuals. Homeowners who are 65 or older may qualify for an exemption of $4,000 from county taxes if their household income does not exceed $10,000. There are also exemptions for disabled veterans and the un-remarried surviving spouses of service members or peace officers killed in the line of duty.

Property owners receive an Annual Notice of Assessment stating the property’s FMV. If an owner disagrees with the valuation, there is a 45-day window to file an appeal. Final tax bills are mailed later in the year, with payment due dates varying by county.

Business-Specific Taxes in Georgia

Businesses operating in Georgia are subject to specific corporate-level taxes. The primary tax is the Georgia Corporate Income Tax, which is levied on the net income of corporations doing business in the state. For the 2024 tax year, the corporate income tax rate is 5.39%, aligned with the individual income tax rate.

Corporations may also be liable for Georgia’s Net Worth Tax. This tax is based on the net worth of the corporation, calculated from its issued capital stock, paid-in surplus, and retained earnings. The tax is graduated, capping at a maximum of $5,000 for corporations with a net worth exceeding $22 million.

Corporations with a net worth of $100,000 or less are not subject to the tax but are still required to file a return. All corporations doing business in Georgia for the first time must file an initial net worth return shortly after they incorporate or qualify to do business in the state.

Employers in Georgia must deduct and withhold Georgia income tax from the wages paid to their employees. The amount to be withheld is determined based on the employee’s wages and the allowances claimed on their Georgia Form G-4. These withheld funds must be remitted to the Department of Revenue on a scheduled basis.

Filing and Paying Your Georgia Taxes

Georgia offers several methods for filing and paying taxes. The primary method is electronic filing through the Georgia Tax Center (GTC), the Department of Revenue’s secure online portal. Taxpayers can use the GTC or approved tax software to file returns, make payments, and manage their state tax obligations.

Taxpayers who prefer to file by mail can download the necessary forms from the Department of Revenue website. The completed paper return, along with any required schedules and a payment voucher if taxes are owed, must be mailed to the address specified in the form instructions.

Several payment options are available for settling a tax bill. The most common methods are a direct bank draft authorized through the GTC or payment by credit or debit card through approved third-party vendors, which may charge a processing fee. For those paying by mail, a check or money order should be included.

The primary deadline for filing individual income tax returns, such as Form 500, is April 15. Georgia grants an automatic six-month extension to file, moving the final deadline to October 15. This is an extension of time to file the return, not an extension of time to pay. Any taxes owed are still due by the original April 15 deadline to avoid penalties and interest.