Senate Bill 520
By: Senators Jackson of the 41st, Jones II of the 22nd, Parent of the 44th, Halpern of the
39th, Orrock of the 36th and others
A BILL TO BE ENTITLED
AN ACT
To amend Article 2 of Chapter 7 of Title 48 of the Official Code of Georgia Annotated,
relating to imposition, rate, computation, exemptions, and credits relative to state income
taxes, so as to revise income tax rates; to repeal itemized nonbusiness deductions and revise
standard deductions; to revise the child tax credit; to provide for an earned income credit; to
repeal tax credits for contributions to student scholarship organizations; to amend Code
Section 48-11-2 of the Official Code of Georgia Annotated, relating to excise tax imposed,
rates for tobacco and vaping products, exemptions, collection and payment, and tax
separately identified, so as to revise tax rates for cigars, loose or smokeless tobacco,
consumable vapor products, vapor devices, and cigarettes; to amend Chapter 2A of Title 20
of the Official Code of Georgia Annotated, relating to student scholarship organizations, so
as to repeal and reserve Code Section 20-2A-4, relating to list of student scholarship
organizations to be provided to the General Assembly; to repeal a penalty regarding
noncompliance by student scholarship organizations; to provide for effective dates and
automatic repeals; to provide for conforming changes; to provide for definitions; to provide
for related matters; to provide for an effective date and applicability; to repeal conflicting
laws; and for other purposes.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION 1.
Article 2 of Chapter 7 of Title 48 of the Official Code of Georgia Annotated, relating to
imposition, rate, computation, exemptions, and credits relative to state income taxes, is
amended in Code Section 48-7-20, relating to individual tax rates, credit for withholding and
other payments, and applicability to estates and trusts, by revising subsection (a.1) as
follows:
"(a.1)(1) On and after January 1, <del>2025</del> <ins>2027,</ins> the tax imposed pursuant to subsection (a) of
this Code section shall be <del>5.19 percent for taxable years beginning on or after
January 1, 2025; provided, however, that such rate shall be reduced by 0.10 percent
annually beginning on January 1, 2026, until the rate reaches 4.99 percent, provided that
such annual reductions in the tax rate shall be subject to delays as provided in paragraph
(2) of this subsection.
(2) Each prospective annual reduction in the tax rate that would otherwise occur as
provided in paragraph (1) of this subsection shall be delayed by one year for each year
that any of the following are true as of December 1:
(A) The Governor's revenue estimate for the succeeding fiscal year is not at least 3
percent above the Governor's revenue estimate for the present fiscal year;
(B) The prior fiscal year's net revenue collection was not higher than each of the
preceding three fiscal years' net tax revenue collection; or
(C) The Revenue Shortfall Reserve provided for in Code Section 45-12-93 does not
contain a sum that exceeds the amount of the decrease in state revenue projected to
occur as a result of the prospective reduction in the tax rates set to occur the following
year.
(3) The Office of Planning and Budget shall make the determinations necessary to
implement the provisions of paragraph (2) of this subsection and shall report its
determinations by December 1 of each year to the department, the Speaker of the House
of Representatives, the President of the Senate, and the chairpersons of the House
</del>
<del>Appropriations Committee, the House Ways and Means Committee, the Senate
Appropriations Committee, and the Senate Finance Committee. This paragraph shall not
be applicable after the final reduction to the rate of 4.99 percent occurs:
</del> <ins>(1) In the case of a married couple filing a joint return:
(A) With a Georgia taxable net income of up to $30,000.00, 2 percent for taxable years
beginning on or after January 1, 2027;
(B) With a Georgia taxable net income of more than $30,000.00 and less than
$60,000.00, 4 percent for taxable years beginning on or after January 1, 2027; and
(C) With a Georgia taxable net income of $60,000.00 or more, 6 percent for taxable
years beginning on or after January 1, 2027; and
(2) In the case of a single taxpayer, head of household, or married taxpayer filing a
separate return:
(A) With a Georgia taxable net income of up to $15,000.00, 2 percent for taxable years
beginning on or after January 1, 2027;
(B) With a Georgia taxable net income of more than $15,000.00 and less than
$30,000.00, 4 percent for taxable years beginning on or after January 1, 2027; and
(C) With a Georgia taxable net income of $30,000.00 or more, 6 percent for taxable
years beginning on or after January 1, 2027."
</ins> SECTION 2.
Said article is further amended in Code Section 48-7-21, relating to taxation of corporations,
by revising subsection (a) and division (b)(7)(C)(iii) as follows:
"(a) Every domestic corporation and every foreign corporation shall pay annually an
income tax on its Georgia taxable net income at the <del>same rate of the tax imposed on
individuals under subsection (a.1) of Code Section 48-7-20</del> <ins>rate of 6 percent</ins> for the
corresponding taxable year. Georgia taxable net income of a corporation shall be the
corporation's taxable income from property owned or from business done in this state. A
corporation's taxable income from property owned or from business done in this state shall
consist of the corporation's taxable income as defined in the Internal Revenue Code of
1986, with the adjustments provided for in subsection (b) of this Code section and allocated
and apportioned as provided in Code Section 48-7-31."
"(iii) No electing Subchapter 'S' corporation nor any of its shareholders shall be
entitled to any credit under Code Section 48-7-28 with respect to such tax so paid or
any deduction for such income under subsection (d) of Code Section 48-7-27;
provided, however, that such electing Subchapter 'S' corporation shall otherwise be
eligible for credits provided by this chapter and shall be considered an 'other entity'
for purposes of Code Sections <del>48-7-29.16,</del> 48-7-29.20, and 48-7-29.21."
SECTION 3.
Said article is further amended in Code Section 48-7-23, relating to taxation of partnerships,
by revising paragraph (4) of subsection (b) as follows:
"(4) No electing partnership nor any of its partners shall be entitled to any credit under
Code Section 48-7-28 with respect to such tax so paid or any deduction for such income
under subsection (d) of Code Section 48-7-27; provided, however, that such electing
partnership shall otherwise be eligible for credits provided by this chapter and shall be
considered an 'other entity' for purposes of Code Sections <del>48-7-29.16,</del> 48-7-29.20, and
48-7-29.21."
SECTION 4.
Said article is further amended in Code Section 48-7-27, relating to computation of taxable
net income, by revising the introductory language and paragraph (1) of subsection (a) as
follows:
"(a) Georgia taxable net income of an individual shall be the taxpayer's federal adjusted
gross income, as defined in the <del>United States</del> Internal Revenue Code of 1986, less:
<del>(1) At the taxpayer's election, either:
(A) The sum of all itemized nonbusiness deductions used in computing such taxpayer's
federal taxable income; or
(B)(1)</del> A standard deduction in an amount as follows:
<ins>(i)(A)</ins> In the case of a married couple filing a joint return, <del>$24,000.00</del> <ins>$34,000.00;</ins> or
<ins>(ii)(B)</ins> In the case of a single taxpayer, head of household, or married taxpayer filing
a separate return, <del>$12,000.00</del> <ins>$17,000.00; and
(C) Provided, however, that, in the case of:
(i) A married couple filing a joint return with a federal adjusted gross income of
$280,000.00 or more, such standard deduction shall be reduced annually by an
amount equal to 25 percent of the amount by which the taxpayer's federal adjusted
gross income for the current taxable year exceeds $280,000.00; and
(ii) A single taxpayer, head of household, or married taxpayer filing a separate return
with a federal adjusted gross income of $140,000.00 or more, such standard deduction
shall be reduced annually by an amount equal to 25 percent of the amount by which
the taxpayer's federal adjusted gross income for the current taxable year exceeds
$140,000.00;"
</ins> SECTION 5.
Said article is further amended by repealing and reserving Code Section 48-7-29.16, relating
to tax credits for contributions to student scholarship organizations.
SECTION 6.
Said article is further amended in Code Section 48-7-29.27, relating to tax credits for
qualifying child, by revising subsection (b) as follows:
"(b)(1) For taxable years beginning on or after January 1, 2026, a taxpayer shall be
allowed a credit against the tax imposed by Code Section 48-7-20 in an amount equal to
<del>$250.00</del> <ins>$1,250.00</ins> for each qualifying child of the taxpayer.
<ins>(2) If the total amount of the tax credit provided for in this subsection exceeds the
taxpayer's income tax liability for a taxable year, such excess funds shall be refunded to
the taxpayer."
</ins> SECTION 7.
Said article is further amended by adding a new Code section to read as follows:
<ins>"48-7-29.29.
(a) A taxpayer shall be allowed a credit against the tax imposed by Code Section 48-7-20
in an amount equal to 20 percent of the federal credit that such taxpayer is allowed under
Section 32 of the Internal Revenue Code. Such credit shall be allowed only if the
individual would have received the federal credit allowed under Section 32 of the Internal
Revenue Code after adding any carryforward of a net operating loss that was deducted
pursuant to such section in determining eligibility for the federal credit.
(b) If the total amount of the tax credit provided for in this Code section exceeds the
taxpayer's income tax liability for a taxable year, such excess funds shall be refunded to the
taxpayer.
(c) The commissioner shall be authorized to promulgate rules and regulations necessary
to implement and administer the provisions of this Code section."
</ins> SECTION 8.
Code Section 48-11-2 of the Official Code of Georgia Annotated, relating to excise tax
imposed, rates for tobacco and vaping products, exemptions, collection and payment, and tax
separately identified, is amended by revising subsection (a) as follows:
"(a) An excise tax, in addition to all other taxes of every kind imposed by law, is imposed
upon the sale, receipt, purchase, possession, consumption, handling, distribution, or use of
cigars, cigarettes, loose or smokeless tobacco, alternative nicotine products, and vapor
products in this state at the following rates:
(1) <del>Little cigars: two and one-half mills each;</del> <ins>Cigars, loose or smokeless tobacco,
consumable vapor products, and vapor devices that contain any consumable vapor
product at the time of sale and which are not designed or intended to be reused or refilled:
28 percent of the wholesale cost price, exclusive of any trade, cash, or other discounts or
any promotion, advertising, display, or similar allowances; and
(2)(A)</ins> <del>All cigars other than little cigars: 23 percent of the wholesale cost price,
exclusive of any trade, cash, or other discounts or any promotion, advertising, display,
or similar allowances;
(3)</del> Cigarettes: <del>37¢</del> <ins>$1.96</ins> per pack of 20 cigarettes and a like rate, pro rata, for other
size packages; <ins>provided, however, that such tax rate shall be revised annually by being
multiplied by the inflation rate for the prior year.
(B) For the purposes of this paragraph, the term 'inflation rate' means the annual
inflationary index rate as determined for a given year by the commissioner by
promulgating a standardized method for determining annual inflationary index rates
which reflect the effects of inflation and deflation on the cost of living for residents of
this state for a given calendar year. Such method may utilize the Consumer Price Index
as reported by the Bureau of Labor Statistics of the United States Department of Labor
or any other similar index established by the federal government if the commissioner
determines that such federal index fairly reflects the effects of inflation and deflation
on residents of this state.
</ins> <del>(4) Loose or smokeless tobacco: 10 percent of the wholesale cost price, exclusive of any
trade, cash, or other discounts or any promotion, advertising, display, or similar
allowances;
</del>
<del>(5) Consumable vapor products in a closed system: 5¢ per fluid milliliter;
(6) Consumable vapor products in an open system: 7 percent of the wholesale cost price,
exclusive of any trade, cash, or other discounts or any promotion, advertising, display,
or similar allowances; and
(7) Vapor devices that contain any consumable vapor product at the time of sale and
which are not designed or intended to be reused or refilled: 7 percent of the wholesale
cost price, exclusive of any trade, cash, or other discounts or any promotion, advertising,
display, or similar allowances."
</del> SECTION 9.
Chapter 2A of Title 20 of the Official Code of Georgia Annotated, relating to student
scholarship organizations, is amended by repealing and reserving Code Section 20-2A-4,
relating to list of student scholarship organizations to be provided to the General Assembly.
SECTION 10.
Said chapter is further amended in Code Section 20-2A-7, relating to penalties for failure to
comply with requirements of chapter and violations, by revising paragraph (2) of subsection
(a) as follows:
"(2) Upon failure to correct all deficiencies within 90 days, such student scholarship
organization shall:
(A) Be immediately removed from the Department of Education list provided for in
Code Section 20-2A-6; <ins>and
</ins> (B) Be required to cease all operations as a student scholarship organization and
transfer all scholarship account funds to a properly operating student scholarship
organization within 30 calendar days of receipt of notice from the Department of
Revenue of removal from the approved list; <del>and
</del>
<del>(C) Have all applications for preapproval of tax credits under Code Section 48-7-29.16
rejected by the Department of Revenue on or after the date the Department of
Education removes the student scholarship organization from its list provided for in
Code Section 20-2A-6."
</del> SECTION 11.
This Act shall become effective on July 1, 2026, and shall be applicable to taxable years
beginning on or after January 1, 2026.
SECTION 12.
All laws and parts of laws in conflict with this Act are repealed.