The U.S. Congress passed and President Trump signed into law the largest tax reform plan in a generation. The reforms changed personal and corporate income tax rates, but also increased the standard deductions and altered or eliminated others. As a result, Georgia’s tax code didn’t match the federal tax code as closely (it has never fully matched) and the resulting changes could create a state tax windfall if adjustments are not made.
Today at noon, Governor Nathan Deal (flanked by Speaker David Ralston and Lt Governor Casey Cagle) announced a package of tax cuts that would reduce Georgia’s state income tax to 5.75% for 2019 and provides provisions to further reduce the income tax rate to 5.5% for 2020.
There are quite a few details on what deductions were adopted and not adopted from the Federal Tax code. Consult your tax advisor for those specifics.
Other portions of the bill eliminates the state portion of taxes on jet fuel. It DOES NOT eliminate the local taxes on AV gas, or on jet fuel taxes that were approved and grandfathered prior to the end of 1987. Of note, however, is that the state (cough, Clayton County, cough) is not in full compliance with federal law. The whole Clayton County PR stunt over this deserves, even demands, its own post.
In short, tax reform at the federal level combined with a rainy day fund passing 10% of annual state revenue has presented an opportunity for income tax reform at the state level. Presuming this bill becomes law (and the presence and positive remarks by Speaker Ralston & Lt Gov Cagle indicate that it will), the legacy of Governor Deal and the legislature of the past 8 years will include funding education first, providing for increased transportation infrastructure investment, completing transformative criminal justice reform, filling an empty rainy day fund, AND cutting income tax rates.
That’s a pretty stellar record. One that will look pretty good in November for any candidate that hasn’t tried to stake the future of their career running against it.