Jones plan would eliminate tax breaks to cut Georgia income tax

Lt. Gov. Burt Jones’ plan to phase out Georgia’s personal income tax would eliminate more than $1 billion of tax breaks for everything from data centers and insurance companies to medical equipment.

The proposal, contained in two bills introduced Friday, would eliminate the income tax for most Georgians by 2027. It’s a big step toward Jones’ ultimate goal of eliminating the tax altogether by 2032.

The bills almost certainly will face stiff opposition from the beneficiaries of various tax breaks and skepticism from political leaders who have their own ideas about tax relief. But despite long odds, Jones has made eliminating the income tax a centerpiece of his campaign for governor and is likely to push hard for his plan.

“The Senate is leading the effort to continue in making significant cuts to our income taxes while maintaining the fiscal soundness of our state,” he said in a statement to The Atlanta Journal-Constitution.

The bills are the latest entry in a three-way competition among Georgia’s top Republicans to define the best way to provide tax relief in an election year.

Gov. Brian Kemp took the first shot last month, announcing plans for a $1.2 billion income tax rebate paired with a reduction in the state income tax rate from 5.19% to 4.99% this year. Under Kemp’s plan, single filers would receive a rebate of up to $250, heads of household would get up to $375 and married couples filing jointly would get up to $500.

House Speaker Jon Burns favors property tax relief. This week the House approved an amended fiscal year 2026 budget that scraps Kemp’s rebates in favor of $850 million in property tax relief that advocates say would average $500 per homeowner.

Burns also has floated a plan to eliminate the property tax on primary single-family residences, a plan that would cost schools and local governments more than $5 billion a year.

Jones’ bid to eliminate the personal income tax may be the most ambitious, and the most difficult to implement. The state expects to get about $15.7 billion from the personal income tax this year — about 42% of state revenue.

The lieutenant governor laid out the initial details of his plan in two bills.

Senate Bill 476 includes Kemp’s proposal to lower the individual income tax rate to 4.99%. It would raise the standard deduction for single taxpayers, heads of household of married people filing separately from $12,000 to $50,000 beginning next year. Married couples filing jointly would see the deduction rise from $24,000 to $100,000.

Sen. Blake Tillery, R-Vidalia, the bill’s sponsor, said that would eliminate the income tax for two-thirds of Georgians next year and significantly reduce the tax for higher earners.

Senate Bill 477 would then reduce the income tax rate to 4.49% next year and to 3.99% in 2028. The corporate income tax rate would fall from 5.19% to 4.99% this year and remain there.

Further steps toward phasing out the personal income tax by 2032 would be left to future legislative action.

To help pay for the income tax cut, SB 476 would eliminate or modify some two dozen tax breaks. They include a sales tax exemption for equipment for high-tech data centers (more than $700 million), an abatement for insurance companies that invest at least 25% of their assets in qualified Georgia assets (more than $300 million) and an income tax credit for banks to cover the cost of local business licenses and state occupation taxes ($55 million).

It also would eliminate a slew of smaller breaks like ones for manufacturers of personal protective equipment and medical equipment and supplies. Both are pandemic-era tax breaks that cost the state less than $1 million a year.

As Jones’ top priority, the bills are expected to pass the Senate. After that, their fate is less certain. Burns has expressed skepticism about Jones’ plan, and Kemp has urged lawmakers to take a cautious approach to tax relief.