A Guide to Georgia’s 2024 Tax Legislation

The 2024 legislative session in Georgia concluded on March 28th, marking a significant period of legislative activity that promises to reshape the state’s financial landscape. During this session, the General Assembly passed several tax bills, including a substantial $500 million in tax cuts for both individual and corporate taxpayers in Georgia. Additionally, several constitutional referendums will be placed on ballots, giving voters a direct say in the state’s tax policies. To help clients, prospects, and others, Wilson Lewis has summarized the key details below.

Background on the Georgia General Assembly

The Georgia General Assembly, comprised of the House of Representatives and the Senate, serves as the state’s primary legislative body. With annual sessions starting in January, the Assembly debates and passes laws that shape how the state is governed. Its decisions on fiscal matters, including taxation and government spending, directly affect every resident and business in Georgia.

Tax reduction is often a focal point for legislators, particularly during election years when the entire General Assembly faces scrutiny from voters. As the 2024 session began, Georgia was in a strong financial position with $16 billion in reserves, consisting of both “rainy day” funds and undesignated reserves. This comes after three consecutive years of record surpluses post-COVID-19, providing a backdrop of financial stability as lawmakers navigated policy decisions.

Key Tax Changes

Below is a summary of the significant tax-related bills passed by the Georgia General Assembly, many of which have already been signed into law.

Income Tax:

• HB 1015 – Reduction in the Individual Income Tax Rate: House Bill 1015 implements the largest income tax cut in Georgia’s history, lowering the individual income tax rate from 5.49% to 5.39%, effective January 1, 2024. This bill accelerates planned reductions outlined in HB 1437, with the Office of Planning and Budget estimating that taxpayers will save approximately $1.1 billion in 2024 alone and potentially $3 billion over the next decade. It also permits further annual reductions of 0.10% starting in 2025, potentially reaching a low of 4.99%, conditional on meeting state revenue targets.
• HB 1023 – Match Corporate Income Tax Rate to Individual Income Tax Rate: House Bill 1023 synchronizes the corporate income tax rate with the individual rate, reducing it to 5.39% for 2024. This adjustment affects both domestic and foreign corporations, and owners of pass-through entities who choose to be taxed at the entity level. This change is a decrease from the previous rate of 5.75%. The bill also extends the filing deadline for corporate tax returns by 30 days beyond the federal extension, although the tax payment deadline remains unchanged.

Both income tax rate bills apply to the entire 2024 tax year but take effect on July 1, 2024. Taxpayers making estimated quarterly payments for Q1 2024 should use the existing tax rate, adjusting payments after July 1, 2024, to reflect the new rate. The Georgia Department of Revenue is anticipated to guide on implementing the rate change before the effective date.

Property Tax: 

HB 1181 – Income Tax Credit Carryforward Period Reduction and Exemption/Credit Sunset: House Bill 1181 revises the tax incentive framework by reducing the carryforward period for key income tax credits from 10 years to five years. This affects essential credits like research and development, jobs, and investment tax credits, shortening the time they can be used against future tax liabilities. The bill also sets sunset dates starting in 2025 for these and other specific incentives, requiring renewal through future legislation.

HB 1019 & HB 1022 – Homestead Exemption Adjustments: House Bills 1019 and 1022 propose constitutional referendums to expand and modify homestead exemptions. HB 1019 seeks to raise the exemption from $2,000 to $10,000, marking the first increase since 1978. HB 1022 would allow local governments to set their exemption levels tailored to local economic conditions with an opt-out provision.

HB 581 – Homestead Exemption and FLOST

This bill addresses multiple facets of Georgia’s property and sales tax systems, including capping increases in homestead valuations to inflation rates and integrating elements of the Flexible Local Option Sales Tax (FLOST). Homeowners will likely see a lower property tax bill with a cap of 3% on assessments while sales tax may increase with the new flexible penny local option. 

HB 808 – Tangible Personal Property Ad Valorem Exemption

House Bill 808 raises the exemption threshold for tangible personal property taxes from $7,500 to $20,000, benefiting businesses by lowering tax liabilities and supporting investment. For instance, a company with equipment valued at $20,000 would previously have been taxed on $12,500 ($20,000 minus the $7,500 exemption). With the new exemption, the entire value of $20,000 is exempt, resulting in no ad valorem tax on that property. 

Other Notable Bills: 

HB 1162 – Annual IRC Conformity: House Bill 1162 aligns Georgia’s state income tax laws with the federal Internal Revenue Code (IRC). This means that Georgia adopts the same tax rules and regulations as the federal government, with no deviations (“decoupling”) from federal tax laws for that year. If the federal tax laws change, Georgia’s tax laws automatically update to match these changes, simplifying tax compliance for individuals and businesses.

HR 598, HB 1267 – Establishment of the Georgia Tax Court: These bills lay the groundwork for creating a dedicated tax court in Georgia. HR 598 suggests transitioning from an administrative court within the executive branch to a judicial branch court, granting the new Georgia Tax Court concurrent jurisdiction with superior courts. Voters will have the opportunity to approve this transition through a referendum on the November 2024 ballot. If the referendum passes, HB 1267 will serve as the enabling legislation, setting the operational start date for the Georgia Tax Court as January 1, 2026, with the court beginning to accept cases on August 1, 2026.

Contact Us

The recent legislative changes in Georgia have significant implications for families and businesses. These adjustments call for a proactive approach to tax planning and compliance. For this reason, it is essential to consult with a qualified tax advisor to determine how you will be impacted. If you have questions about the information outlined above or need assistance with another tax or accounting issue, Wilson Lewis can help. For additional information, call 770-476-1004 or click here to contact us. We look forward to speaking with you soon.