Georgia ranks 22nd in state tax competitiveness index
Georgia ranks 22nd in the Tax Foundation’s annual State tax Competitiveness Index, with property taxes receiving the lowest marks among its tax categories. While property taxes are set locally by cities,counties,and school boards,Georgia ranks higher than most neighboring states except florida. in 2023, property taxes amounted to 0.77% of owner-occupied housing value, up from 0.69% in 2022.
In 2024, voters approved a measure to limit property tax increases by freezing assessments to inflation rates, though local governments were allowed to opt out-over 35% did so. Georgia ranks 16th in individual income taxes, with a current rate of 5.19% scheduled to decrease to 4.99% by 2028. A Senate panel is exploring the possibility of eliminating income taxes altogether.
Georgia’s sales tax ranking is 18th, with a state rate of 4% supplemented by local taxes, bringing the combined rate above the national average at 7.44%. The state does not have inheritance, estate, or gift taxes. The highest ranking came in corporate taxes, where Georgia is 9th, despite some tax limitations like the absence of first-year capital investment expensing and the presence of a capital stock tax.
Top states for tax competitiveness include Wyoming, South Dakota, new Hampshire, Alaska, and Florida, while New York ranks lowest.
Georgia ranks 22nd in state tax competitiveness index
(The Center Square) – Georgia ranks 22nd on the Tax Foundation’s annual State Tax Competitiveness Index, with property taxes receiving the lowest marks.
Property taxes are not set by the state, but rather by local cities, counties and school boards. Georgia ranks higher than all of its neighbors except Florida, with the highest property taxes paid as a percentage of owner-occupied housing value at 0.77% in 2023, an increase from 0.69% in 2022, according to the Tax Foundation.
Georgia ranks 38th in the tax competitiveness index for property taxes.
Voters approved a measure in 2024 that would have curbed property tax increases by freezing property tax assessments at the rate of inflation. Cities and counties could enact a new penny sales tax to offset property taxes.
But baked into the bill was an option that allowed cities, counties and school boards to opt out of freezing assessments. More than 35% of local entities did, according to the Tax Foundation.
The index places the Peach State at 16th for individual income taxes. The current rate is 5.19%. It will gradually wind down to 4.99% by 2028.
A Senate panel is examining ways to eliminate income taxes. The committee will make its recommendations to the General Assembly at the end of the year.
Georgia’s neighbors to the north and south, Tennessee and Florida, do not have a state income tax. Alabama and North Carolina’s income tax rates are lower than Georgia’s, according to the report.
Georgia placed 18th for its sales tax in the Tax Foundation’s report.
“Georgia’s state sales tax rate is relatively low at 4%, but localities are authorized to impose local sales taxes, with an average rate of 3.44%, bringing the combined rate to 7.44%, which is above the national average,” the report said. “Georgia does not impose inheritance, estate, or gift taxes.”
The state received its highest marks for its corporate tax rate, ranking 9th.
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“Since 2024, Georgia’s corporate income tax rate has been aligned with the individual income tax rate and is set to decrease from the current 5.19% to 4.99% by 2028,” the reports said. “However, the state does not allow first-year expensing of capital investment and imposes a nuisance capital stock tax of up to $5,000 per year.”
Wyoming, South Dakota, New Hampshire, Alaska and Florida rounded out the top five in the state tax competitiveness index. Tennessee ranked eighth.
The lowest-ranking state in the report is New York, followed by New Jersey, California, Connecticut, and Maryland.
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