Georgia Tax Revenue Sees Sharp Decline in October, Impacting State Finances
Overall net tax collections for October amounted to $2.62 billion, marking a 3.1% drop from the previous year, translating to $84.4 million less in Georgia tax revenue.
Georgia tax revenue took a hit in October, with officials reporting a substantial decrease in income tax collections and a surge in income tax refunds, resulting in a decline of millions of dollars
Officials attribute $70.5 million of the October Georgia tax revenue decrease to the suspension of the Georgia gas tax in September. However, even when excluding the fuel tax suspension, a 5.7% revenue drop was observed. Year-to-date for the fiscal year, Georgia officials reported that revenue collections were 4.2% higher, amounting to an increase of $428.6 million from the same period in the previous year.
Excluding fuel tax changes, Georgia tax revenues for the four months ending on October 31 were down 2% compared to the previous year. Additionally, income tax refunds increased by $62.9 million compared to the previous year, while income tax withholding payments for October saw a 54.7% increase.
In contrast, individual income tax payments dropped by 32.6%, equivalent to a decrease of $137.8 million. Furthermore, individual income tax estimated payments decreased by $23 million, a decline of 45.3%, and all other individual tax categories collectively saw a decrease of $16.2 million, according to the governor’s office.
Sales and use taxes exhibited modest growth, with the state collecting $1.51 billion in sales tax in October, representing a 1.1% increase or $17.1 million over the previous fiscal year
The net sales and use tax decreased by $12.2 million from October 2022 to October 2023. Separately, corporate income taxes surged by over 24%, driven by an increase in corporate income tax refunds and higher tax return payments. This boost resulted in a total collection of $106.5 million, which was $25.8 million higher than the previous year.
Despite the relief provided to Georgians at the gas pump through the suspension of the gas tax, the state still managed to increase Georgia tax revenue from Motor Fuel Tax collections, which grew by $70.5 million in comparison to FY 2023. The suspension, initiated in September and extended in October, did not prevent the state from achieving an increase in Georgia tax revenue. Motor Fuel Tax is reported by distributors the month after its collection, reflecting revenue collected in September before the tax suspension.