Georgia’s tax revenues dip in October due to tax suspension, hurricane extensions

ATLANTA - Georgia's net tax collections in October amounted to $2.53 billion, a decrease of $89.7 million, or 3.4 percent, from the previous fiscal year when collections totaled $2.62 billion. Year-to-date, Georgia’s net tax collections reached almost $10.64 billion, down $61.1 million, or 0.6 percent, from October 2023's $10.7 billion figure.

The decline in revenue is largely attributed to two factors: the 2023 motor fuel tax suspension and hurricane-related tax filing and payment extensions. Without adjusting for the motor fuel tax changes, revenues were down 7.7 percent in October compared to the same month last year and down 1.9 percent year-to-date. The extension, announced on October 3, delays income tax return and payment deadlines from October 2023 through April 2025 until May 1, 2025, likely impacting individual and corporate income tax collections, excluding payroll withholding.

Individual income tax collections dropped to nearly $1.26 billion, an 8.7 percent decrease from last October's $1.38 billion. Contributing factors include:

• A decrease in withholding payments, down $49.3 million, or 3.8 percent.
• A 36.5 percent drop in individual income tax return payments, a decrease of $104.3 million.
• A decrease in refunds issued (net of voids), down by $27.2 million, or 10 percent.
• Other individual income tax payments, such as estimated payments, increased by $6.8 million.

Gross sales and use tax collections totaled $1.51 billion, marking a slight increase of $2.3 million, or 0.2 percent, from last year. However, net sales tax revenue fell by 1 percent, a decline of $7.5 million. Additionally, the state’s adjusted sales tax distribution to local governments decreased by $4.3 million, or 0.6 percent, to $748 million. Sales tax refunds saw a $14.1 million increase from last October.

Corporate income tax revenue declined 47.4 percent, totaling $69.5 million. This includes:

• A $37.9 million increase in corporate tax refunds.
• A 40.8 percent decrease in corporate tax return payments, down by $23.5 million.
• A $1.4 million reduction in other corporate tax payments, including estimated payments.
• Motor fuel tax collections surged by 146.1 percent, up $105.6 million from October 2023. The increase follows the conclusion of a fuel tax suspension initiated by Governor Brian Kemp in September 2023 to alleviate high gas prices.
• Motor vehicle tag and title fee collections held steady at $32.1 million. Title ad valorem tax (TAVT) collections, however, fell by $6.2 million, or 8.5 percent.

Georgia’s tax revenue decline underscores the combined impact of policy decisions, economic conditions, and external events, which continue to influence the state’s fiscal landscape.