Georgia Gov. Nathan Deal has proposed lowering the top income tax rate in response to the federal tax reform law. Georgia is expected to benefit significantly from the Tax Cuts and Jobs Act (Pub. L. 115-97) that took effect earlier this year.
The bill (H.B. 918, introduced on February 12) would reduce the top income tax rate to 5.75% from 6%, effective January 1, 2019. The tax rate would be further reduced to 5.5%, effective January 1, 2020. These reductions would impact the withholding tables and supplemental wage tax rates if enacted. Currently, the supplemental wage tax rates are 2% to 6%, depending on the amount of an employee’s annual income (6% if annual income is over $15,000).
The bill would also change the Internal Revenue Code conformity date to February 9, 2018, from January 1, 2017. This means Georgia’s state tax code would conform to the federal tax reform changes (with some exceptions) that took effect January 1, 2018.
The bill needs to be passed by the state legislature and signed by the governor to take effect.
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