Georgia Tax Rates

This post provides an overview of the primary taxes levied at the state level in Georgia. The information contained here is intended for general reference. For individuals or businesses seeking comprehensive support with tax filings, compliance, or strategic planning, indinero offers expert services. We encourage all who utilize this summary to explore the tailored tax support available through indinero.

Individual Income Tax

Georgia has transitioned from a graduated income tax structure to a flat rate individual income tax.

  • Tax Rate: Effective for the 2025 tax year, the flat rate is 5.49% of Georgia taxable net income. This rate is scheduled to gradually decrease in future years, contingent upon the state meeting specific economic growth metrics.
  • Taxable Income: Taxable net income is generally determined using federal adjusted gross income with specific Georgia modifications and subtractions.
  • Retirement Income: Social Security benefits are not taxable in Georgia. A significant portion of pension and retirement income may also be excluded for taxpayers who are 62 or older, or disabled.

Sales and Use Tax

Sales tax is a key revenue source, though Georgia’s state rate is relatively low compared to the average.

  • State Rate: The state sales tax rate is 4.0% on the retail sale of tangible personal property.
  • Local Taxes: Counties and municipalities impose an additional local sales tax, often used to fund local projects and infrastructure. Local rates typically range from 2% to 4%, meaning the combined state and local sales tax rate averages around 7.44% across the state.
  • Tax on Title: Georgia imposes a Taxes Paid at Title (TAVT) on motor vehicles in lieu of traditional sales tax.
  • Exemptions: Groceries (unprepared food) and prescription drugs are exempt from the 4.0% state sales tax, though local sales taxes may apply to groceries in some jurisdictions.
  • Use Tax: A state use tax of 4.0% is imposed on items purchased outside of Georgia but brought into the state for storage, use, or consumption, if state sales tax was not paid.

Property Tax (Ad Valorem Tax)

Property taxes in Georgia are primarily local taxes administered by counties, cities, and school districts; they generally do not fund state government services. The state does not collect a property tax, except for a very small ad valorem tax on all taxable property (currently phased out/near zero).

  • Assessment Ratio: Real property is assessed at 40% of its fair market value (its appraised market value). Tax is calculated by applying the local millage rate to this assessed value.
  • Millage Rate: This rate, expressed in mills (one mill equals $1 per $1,000 of assessed value), varies significantly by location and funding needs of the local government and school district. School taxes usually account for the largest portion of the property tax bill.
  • Homestead Exemption: The state mandates a minimum Homestead Exemption on the value of a primary residence, which reduces the property’s taxable value and lowers the final tax bill. Local jurisdictions may offer additional exemptions.

Corporate Income Tax

Georgia imposes a tax on corporations that own property, do business, or receive income from sources within the state.

  • Tax Rate: The corporate income tax rate is a flat 5.39% of the corporation’s Georgia taxable net income (for tax year 2025). This rate is also subject to gradual reduction based on the same economic criteria as the individual income tax.
  • Apportionment: For multi-state corporations, Georgia uses the single sales factor apportionment method. This highly favorable method calculates the portion of a company’s total income taxable in Georgia by referencing only the percentage of its total sales that occur within the state, placing a reduced tax burden on companies that have significant property and payroll within the state but sell most of their product elsewhere.

Unique Business Taxes

Corporate Net Worth Tax: The state levies a net worth tax on corporations in addition to the corporate income tax. This tax is based on a corporation’s net worth, with a minimum tax and a maximum cap of $5,000 for net worths in excess of $22 million. Corporations with a net worth of $100,000 or less are exempt from the tax but must still file a return.

R&D Offer Quiz

Step 1 of 3

Answer to find out if you're eligible for R&D tax credits.

Do the activities performed relate to a new or improved business component’s function, performance, reliability, quality, or composition?(Required)
For Example: A mid-sized packaging company develops a slightly modified cardboard box design to improve its stacking strength (reliability) for warehouse storage, involving minor adjustments to the corrugation pattern to reduce collapse under standard weight loads.
Is your company trying to discover information to eliminate uncertainty concerning the capability or method for developing or improving a business component?(Required)
For Example: A furniture manufacturer investigates whether a cheaper wood adhesive can hold joints as effectively as the current one during assembly, testing bond strength to resolve doubts about its capability in standard production lines.
Do the activities performed constitute a process of experimentation?(Required)
For Example: An auto parts supplier runs a series of bench tests on different lubricant formulations to find one that reduces friction in engine bearings more effectively, systematically comparing wear rates over simulated operating cycles.