HB111: HB111 Income tax; reduce rate of tax

Georgia currently taxes individual income at a flat 5.39 percent rate, with a law already on the books calling for that rate to drop gradually each year until it reaches 4.99 percent. This bill speeds that process along for 2025 by setting the rate at 5.19 percent for taxable years beginning on or after January 1, 2025, rather than the previously scheduled 5.39 percent. The bill keeps the existing structure that can delay future annual 0.10 percent reductions if state revenue growth, prior year tax collections, or the state's Revenue Shortfall Reserve fund do not meet certain benchmarks, as checked each December 1 by the Office of Planning and Budget. The law would take effect July 1, 2025, and apply to tax years starting on or after January 1, 2025.

• Lowers Georgia's flat individual income tax rate from 5.39 percent to 5.19 percent for taxable years beginning on or after January 1, 2025.
• Keeps in place the existing plan for the rate to fall by 0.10 percent each year afterward until it reaches 4.99 percent.
• Preserves the rule letting the Governor and Office of Planning and Budget delay a scheduled annual rate cut by a year if revenue growth, prior collections, or the state's reserve fund fall short of set benchmarks.
• Requires the Office of Planning and Budget to report its yearly determinations on rate delays to the Department of Revenue, legislative leaders, and key House and Senate committees by December 1.
• Sets the law to take effect July 1, 2025, applying retroactively to tax years starting January 1, 2025.

All Georgia individual income taxpayers, since the bill changes the statewide flat tax rate. It also affects the Department of Revenue, the Office of Planning and Budget, and legislative committees involved in tracking and reporting on the rate reduction schedule.

Because Georgia uses a flat income tax rate, this change affects nearly every wage earner and taxpayer in the state, slightly reducing the amount of state income tax owed starting with the 2025 tax year, while leaving open the possibility that future scheduled cuts could be delayed if state revenues underperform.

• Section 1 amends O.C.G.A. § 48-7-20(a.1) to set the individual income tax rate at 5.19 percent for taxable years beginning on or after January 1, 2025, down from the previously enacted 5.39 percent.
• Section 1 keeps the annual 0.10 percent rate reduction schedule beginning January 1, 2026, continuing until the rate reaches 4.99 percent.
• Paragraph (2) allows each scheduled annual reduction to be delayed a year if the Governor's revenue estimate growth, prior fiscal year collections, or the Revenue Shortfall Reserve fail to meet specified thresholds.
• Paragraph (3) requires the Office of Planning and Budget to report its determinations by December 1 each year to the Department of Revenue and specified legislative leaders and committees.
• Section 2 sets the effective date as July 1, 2025, applying to taxable years beginning on or after January 1, 2025.
• Section 3 repeals conflicting laws.

1. 2025-04-15Effective Date 2025-07-01
2. 2025-04-15Act 7
3. 2025-04-15House Date Signed by Governor (House)
4. 2025-04-07House Sent to Governor (House)
5. 2025-03-20Senate Passed/Adopted (Senate)
6. 2025-03-20Senate Third Read (Senate)
7. 2025-03-20Senate Engrossed (Senate)
8. 2025-03-18Senate Read Second Time (Senate)

• Soo Hong (R, HD-103)Primary sponsor
• Matthew Gambill (R, HD-015)
• Lauren McDonald (R, HD-026)
• Will Wade (R, HD-009)
• Bruce Williamson (R, HD-112)
• Shaw Blackmon (R, HD-146)
• Bo Hatchett (R, SD-050)

1. PassedHouse voteMarch 6, 2025

   110 yea, 60 nay (2 not voting, 8 absent)

   Passage: House Vote #196

2. PassedSenate voteMarch 20, 2025

   30 yea, 24 nay (2 not voting, 0 absent)

   Motion To Engross: Senate Vote #252

3. FailedSenate voteMarch 20, 2025

   21 yea, 30 nay (2 not voting, 3 absent)

   Motion To Table: Senate Vote #255

4. PassedSenate voteMarch 20, 2025

   30 yea, 23 nay (1 not voting, 2 absent)

   Passage: Senate Vote #256

• income tax
• tax rate cuts
• Georgia state budget
• personal finance