Georgia wants to lower income taxes. Some of the world’s biggest companies are standing in the way.
A state Senate bill that would all but exempt many lower- and middle-income earners from state income tax is stalling in the Georgia House, stymied by opposition from corporations that stand to lose billions in tax breaks. Both chambers of Georgia’s legislature are controlled by Republicans.
The legislation, which passed Georgia’s upper chamber 32-18 last month, would cut the state’s flat income-tax rate for individuals and corporations from 5.19% to 4.99% starting this year. It would also exempt the first $50,000 of earnings for individual filers and the first $100,000 for married couples from income tax beginning in 2027.
If the measure were to become law, Georgia could see a $5.1 billion decline in revenue in fiscal 2028, equivalent to about 13% of its budget, according to the Georgia Budget & Policy Institute. That would be an even bigger hit than a nearly 10% drop in revenue in 2009, during the Great Recession.
To help pay for the tax reductions, the bill proposes ending dozens of incentives and exemptions for businesses including data centers, cigarette exporters, medical-equipment manufacturers and banks.
Manufacturing giants including Hyundai Motor Group, Rivian Automotive Inc. and Kia Corp. have accepted incentive packages with property-tax breaks, sales-tax exemptions and job tax credits to open large warehouses and plants in Georgia.
A Rivian spokesperson said the EV maker will “continue to work closely with state and local partners in Georgia” and remains “committed to building a state-of-the-art manufacturing facility in Stanton Springs.” Kia declined to comment and Hyundai didn’t respond to requests for comment.
Amazon.com Inc., Meta Platforms Inc. and Microsoft Corp. operate data centers in Georgia, taking advantage of sales and use tax exemptions on some high-tech equipment. The exemptions would be phased out under the Senate bill.
Microsoft declined to comment. Meta and Amazon didn’t respond to requests for comment.
Republican Senator Blake Tillery, the measure’s sponsor, said the legislation would make the state more affordable for the middle class. It targets corporations to avoid burdening residents with sales taxes typically used to offset income-tax cuts, he said.
“All we’re trying to do is value people over corporate credits,” said Tillery. “You shouldn’t be getting the credit just because you were wealthy enough to afford a lobbyist.”