Georgia lawmakers eye income tax repeal, revive key tax bills for 2026 session

The 2026 legislative session is expected to begin Jan. 12, and several issues regarding taxes are expected to be introduced or recalled from the 2025 session. 

A major focus will be to entirely eliminate the state income tax. The Senate Special Committee on Eliminating Georgia’s Income Tax held several meetings exploring the possibility towards the end of 2025.

State Sen. Blake Tillery, the committee chair, said the issue is in the forefront of people’s minds this year.

“I think it’s evident if you’ve watched anything in recent news stories or even the recent elections that folks are really feeling the pinch in their own homes whether it be on groceries, gas, child care,” Tillery said.

Georgia Public Policy Foundation President Kyle Wingfield testified before the committee arguing that the change would be a powerful contributor to the state’s economy.

However, a Georgia Budget and Policy Institute report found that the state would need to increase its sales tax rate to 12% to account for the loss in revenue.

House Bill 111 already reduced the flat individual and corporate income tax rate to 5.09%, which goes into effect Thursday. A further reduction to 4.99% by 2027 is included in the bill provided certain revenue thresholds are met.

Other tax legislation is expected to be discussed that was held over from the 2025 session:

• SB 89: The bill would modify or create three child tax credits reducing tax revenue in the state by nearly $180 million in 2026. It establishes a $250 tax credit for each qualifying child under age seven, increases the state credit for child and dependent care expenses from 30% to 40% of the federal credit and modifies the existing employer sponsored childcare tax credit.
• SB 129: Also known as “Georgia Supporting Those Who Sacrificed for Service Act,” this bill would offer more tax relief to disabled veterans and first responders by expanding homestead exemptions. Because the bill is a constitutional amendment, it will need voter approval in November 2026.
• HB 328: This bill would increase the state’s tax credit cap on donations to student scholarship organizations from $120 million to $140 million.