RefundAtlas

Georgia Tax Guide: Transitioning to Flat Tax

Understand Georgia's evolving tax structure as it moves toward a flat income tax rate, plus sales and property tax details.

5.39%
Flat Income Tax Rate
7.38%
Combined Sales Tax
0.90%
Property Tax Rate
#32
Tax Burden Rank

Tax Overview

Georgia is in the process of transitioning from a progressive income tax system to a flat tax rate. The state has been gradually reducing its top rate and consolidating brackets, with a target flat rate of 5.39% that will continue to decrease in coming years. This reform was enacted through the Georgia Tax Reduction and Reform Act, which aims to make the state more competitive with neighboring Florida and Tennessee, which have no income tax.

Sales tax in Georgia has a state rate of 4%, with local option sales taxes that typically add 3-4% more, resulting in combined rates between 7% and 8% in most areas. Georgia exempts groceries from the state portion of sales tax, though local sales taxes still apply to food purchases. The state also offers periodic sales tax holidays for back-to-school shopping and energy-efficient products.

Property taxes in Georgia are moderate, with rates varying significantly by county. The state offers a homestead exemption that reduces the assessed value of owner-occupied homes for tax purposes. Georgia does not tax Social Security benefits and offers retirement income exclusions for seniors, making it reasonably attractive for retirees who want to stay in the Southeast without the higher costs of Florida real estate.

Income Tax

Georgia is transitioning to a flat tax. The rate started at 5.49% and is set to decrease gradually. The previous progressive system had rates from 1% to 5.75%.

Flat Tax Rate: 5.39%

Sales Tax

State Rate4.00%
Avg. Local Rate3.38%
Combined Rate7.38%

Property Tax

Effective Rate0.90%
Median Annual Bill$1,855

Key Deductions in Georgia

  • ✓Standard deduction of $5,400 (single) or $7,100 (married filing jointly)
  • ✓Retirement income exclusion up to $65,000 per person (age 62+)
  • ✓Military retirement income exclusion
  • ✓Georgia 529 plan contribution deduction (up to $8,000 per beneficiary)
  • ✓Low-income tax credit for qualifying filers
  • ✓Qualified rural hospital tax credit

Filing Information

Filing Deadline: April 15

Tax Authority: Georgia Department of Revenue

Phone: (877) 423-6711

Website: https://dor.georgia.gov

Frequently Asked Questions

When does Georgia's flat tax take full effect?
Georgia began its transition to a flat income tax in 2024, starting at 5.49%. The rate is scheduled to decrease gradually, reaching 5.39% and potentially going lower in subsequent years, depending on revenue performance and legislative action.
Does Georgia tax Social Security benefits?
No, Georgia does not tax Social Security benefits. The state also offers a generous retirement income exclusion of up to $65,000 per person (age 62+) for other types of retirement income.
Are groceries exempt from sales tax in Georgia?
Groceries are exempt from the 4% state sales tax in Georgia, but local sales taxes (typically 3-4%) still apply to food purchases. This partial exemption reduces but does not eliminate the sales tax on groceries.
What retirement income exclusions does Georgia offer?
Georgia residents age 62-64 can exclude up to $35,000 per person of retirement income. Those age 65 and older can exclude up to $65,000 per person. This includes pensions, 401(k) distributions, and investment income.

Neighboring State Guides

TennesseeNorth CarolinaSouth CarolinaFloridaAlabama

Ready to file your Georgia taxes?

Compare tax software that supports GA state filing.

Compare Tax Software