On April 18, 2024, Governor Brian Kemp of Georgia signed into law two significant bills – House Bill 1015 (HB 1015) and House Bill 1023 (HB 1023) – that will reduce taxes for both residents and corporations in the state.
HB 1015 – Income Tax Relief for Georgians
The centerpiece of the tax cut package is HB 1015, which lowers the state’s income tax rate from 5.49 percent to 5.39 percent beginning in 2024. This expedites the planned annual decrease of 0.1 percent until it reaches 4.99 percent. This may seem like a small change, but it translates to a modest tax cut for all taxpayers. The bill passed the state Senate with a strong majority vote of 40-12, indicating broad bipartisan support for providing tax relief to citizens. The bill passed unanimously in the House in February 2024.
HB 1023 – Aligning Business and Individual Rates
HB 1023 takes a different approach to tax reduction. This bill aims to create a more business-friendly environment by matching the corporate income tax rate to the individual income tax rate. With the passage of HB 1015, this would set the new business tax rate at 5.39 percent. Proponents of the bill argue that this will make Georgia more attractive to businesses looking to relocate or expand, potentially leading to job growth and economic development.
Impact to Taxpayers
While the individual tax cut amounts to a small percentage decrease, it represents a reduction in the tax burden for Georgia residents. The impact will vary depending on income level, but all taxpayers will see some savings. For corporations, the tax cut could be more significant. Aligning the corporate rate with the individual rate simplifies tax filing and potentially reduces overall tax liability for businesses. This could stimulate economic growth by encouraging investment and job creation.
For more information about HB 1015 or HB 1023, contact your Windham Brannon advisor today, or reach out to Tim Clancy.
