ATLANTA – If short-term indications are to be taken seriously, Republican leaders in the Georgia House of Representatives have some new ammunition in their fight for another state income tax cut.
State tax collections rose 4.2% last month compared to February of last year, Gov. Brian Kemp’s office announced Wednesday. February marked the second consecutive month tax revenues have gone up in Georgia, following January’s 4.5% increase.
Georgia Rep. Brett Harrell, chairman of the House Ways and Means Committee, cited a positive trend in state revenues when he argued on the House floor Tuesday in support of his bill that would reduce the state income tax rate from 5.75% to 5.375%, effective Jan. 1. The House passed the measure virtually along party lines.
Harrell, R-Snellville, said Georgia income tax revenues for the first seven months of the current fiscal year were up over the same seven months in fiscal 2019.
However, tax collections overall were flat or declining for much of calendar 2019, a trend that has prompted Kemp and some Senate Republican leaders to express reservations about reducing taxes beyond the income tax cut lawmakers enacted two years ago, which sent the income tax rate from 6% to 5.75%.
Lawmakers advocating a cautious approach to further tax relief also argue the state can’t afford it at the same time the General Assembly is being asked to approve deep spending cuts in the budget.
The revenue report released Wednesday showed income tax collections in Georgia rose 15.4% last month, driven by a slight decrease in refunds issued and a larger hike in payments to the state Department of Revenue.
On the other hand, net sales taxes were down 1.8% in February compared to the same month a year ago.
Corporate income tax revenues rose 44.1% last month. As with income taxes, refunds were down slightly while tax payments showed a large jump.