by Stanley Dunlap, Georgia Recorder, [This article first appeared in the Georgia Recorder, republished with permission]

April 15, 2025

An additional state tax refund could be deposited into Georgians’ bank accounts or mailed to them within the next few weeks. 

On Tuesday, Gov. Brian Kemp signed a pair of bills that will provide a one-time rebate up to $500 to Georgia families and a reduction in the state income tax that is estimated to save Georgians about $880 million over the next year.

Kemp’s signature on House Bill 112 authorizes the extra tax refund this year designed to provide relief to taxpayers who qualify. Using a portion of the state’s reserves, the state will send $250 to individual taxpayers, $375 to single adults with dependents and $500 to married couples filing jointly. 

This makes the third consecutive year the state has sent the bonus refund to taxpayers. 

“We know that this is your money, not the government’s, and we know that you know best how to spend it,” Kemp said. “I’m proud to put this money back where it belongs and entrust hardworking Georgians with their own funds, especially as families deal with the high cost environment that we have been in over the last several years.”

The bill signing ceremony was held before a crowd of several hundred attendees at a Cobb County Chamber of Commerce event inside the Coca-Cola Roxy venue at The Battery Atlanta.

The governor said that the occasion was the result of the commitment made by state leaders over the last couple of years to save or return over $7.6 billion in income tax refunds, property tax exemptions, and state gas tax suspensions.

Kemp also on Tuesday signed House Bill 111, which accelerates an income tax rate and lowers it from 5.39% to 5.19%.

Under a previously approved plan, the rate would eventually drop to 4.99%.

This year’s income tax cut means the state will miss out on about $880 million in revenue next year. The one-time rebate is also projected to cost another $1 billion to the state’s coffers.

The soundness of the Kemp-backed tax cut has been met with diverging opinions from a pair of Georgia-based think tanks. 

Kyle Wingfield, CEO and president of the conservative-leaning Georgia Public Policy Foundation, credited state lawmakers for the progress made by lowering the flat tax rate on personal and corporate income to 5.19%.

The biggest threat to Georgia’s strong business climate are tax policies from other surrounding states that are more advantageous to economic growth, Wingfield wrote in an April 7 report. 

Tax rates “especially matter for entrepreneurs and small businesses, which disproportionately represent the job creation and future potential of an economy. And while other taxes matter as well, income taxes garner headlines for a reason: They’re the most economically damaging taxes because they discourage work, savings and investment – the lifeblood of an economy,” Wingfield wrote.

David Schaefer, vice president of research and policy at the left-leaning Georgia Budget and Policy Institute, said the state would be better off using the tax revenue to increase funding for the public school education formula and health care, especially since Georgia’s per-capita spending has been mostly flat for decades.

He cited analysis in a February report from the Institute on Taxation and Economic Policy showing that people earning at least $75,000 disproportionately benefit from the 5.39% to 5.19% state tax reduction. 

The current structure of Georgia’s tax system causes those with the lowest incomes to pay a larger share of their earnings in state and local taxes than those with the highest incomes, Schaefer said. 

“We think that the tax cut from 5.39% the 5.19% is largely regressive,” he said. “Most of the benefits of that tax cut are going to go to the wealthiest Georgians.”

Georgia Recorder is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Georgia Recorder maintains editorial independence. Contact Editor John McCosh for questions: info@georgiarecorder.com.