Senate panel advances plan to eliminate income tax for most Georgians, sunsets credits to pay for it

A Georgia Senate committee on Monday voted 9–3 to advance a package of bills that would eliminate the state's income tax for many households by sharply increasing the standard deduction and rolling back or sunsetting dozens of tax credits.

Senator Tillery, who presented the legislation, said the centerpiece—Senate Bill 476—raises the standard deduction to $50,000 for individuals and $100,000 for married filers and pairs that change with targeted cuts to existing income-tax credits. "This bill does everything we said and does not create or raise a new tax," Tillery said, arguing the plan channels benefits first to middle-class families while trimming or ending credits that largely flow to corporations.

The committee's plan also adopts a modest rate cut the governor proposed (from 5.19% to 4.99%) and applies a five-year sunset (through Dec. 31, 2031) to many income-tax credits that previously lacked expiration. Tillery said eliminating 1 percentage point of the flat rate costs roughly $3 billion and that increasing the standard deduction as proposed would cost about $3 billion in the first year, with some multi-year estimates rising higher depending on which credits are renewed.

Why it matters: Committee supporters said the change would deliver immediate relief to households struggling with rising costs, while opponents warned the package could erode revenue streams that support Medicaid, behavioral-health services and other programs. "If you vote against this bill, you're going to have to explain to someone that you voted against eliminating the income tax for families making less than $100,000," Tillery said. A committee member countered that the legislation risks undercutting the funding the state needs to provide critical services to people on long waiting lists.

Details and trade-offs: The bill targets a long list of credits and exemptions to pay for the deduction increase. The presenter read sections that would: scale back the state's affordable-housing credit to 50% of the federal credit; end a set of insurance-company and bank-related income-tax offsets; roll back COVID-era telework and PPE job credits; eliminate an EV charger sales-tax exemption and a yacht-parts sales-tax exemption; and reduce the research credit from 25% to 12.5% for some uses. The presenter said some credits could be renewed before 2031 but that the committee sought accountability by applying consistent five-year reviews.

Fiscal questions: Members repeatedly sought a single, auditable fiscal schedule. The presenter acknowledged discrepancies between Department of Revenue and Department of Audits numbers and said he was offering low-end estimates while promising more granular spreadsheets and fiscal notes. He cited a wide range on data-center-related exemptions (a low-end figure he used of roughly $131 million versus fiscal notes approaching $700 million) and listed other low-end estimates for specific credits (for example, a $1 million figure for the EV credit and roughly $55 million for bank-related credits on the low end).

Procedure and votes: After discussion and requests for documentation, the committee voted to pass SB 476 out of committee, 9–3. The committee also substituted the Senate language into House Bill 134 to address procedural questions about revenue-origin rules and passed that substitute by the same margin. The presenter said the Senate would also move similar language into additional house bills as part of interchamber negotiations.

SB 477 and next steps: The committee also advanced Senate Bill 477, which envisions additional rate reductions tied to revenue triggers (dropping the rate to 4.49% on Jan. 1, 2027, and to 3.99% on Jan. 1, 2028, if revenues meet the bill's thresholds). That measure, and a procedural substitute to move the Senate language into House Bill 463, passed the committee 9–3. Both bills now head to the full Senate, and multiple members asked for audited fiscal notes and a line-by-line code crosswalk before floor consideration.

What to watch: The committee asked the author to provide a detailed spreadsheet showing code sections, the fiscal impact of each credit targeted and reconciled estimates from DOR and auditors. Lawmakers' next steps include floor debate in the Senate and negotiation with the House over substitute bills. If enacted as written, the change to standard deductions would be effective Jan. 1, 2027, and some credit and effective-date provisions would phase in as early as July 1, 2026.

(Reporting based solely on committee transcript.)