Income, Property, and Sales Tax, Oh My!

If you're a Georgia homeowner or property owner, you know the drill. Each year your property tax bill arrives in your mailbox with little fanfare, but it can pack a punch to household budgets. For Georgia's taxpayers, there can be a similar feeling when filing your annual income taxes, only to discover that you owe more to Uncle Sam and to the state than you previously thought. The Georgia General Assembly has heard those cries loud and clear from every district and they are planning to do something about it when they reconvene in Atlanta in January for the 2026 legislative session.

In the House of Representatives, Speaker Jon Burns (R-Newington) has made it clear that one of the main priorities of his chamber will be to provide property tax relief to Georgians while incrementally rolling back the state income tax. Currently, the biggest feather in the legislature's cap when it comes to property tax relief is in the passage of House Bill 581 (2024 session) and House Bill 92 (2025 session), the two biggest pieces of property tax legislation since the 1970s. HB 581 created an optional statewide floating homestead exemption capping annual property tax assessments to the rate of inflation.

This was paired with the local authority to levy a 1% sales tax (FLOST) with revenues going to property tax relief. The measure passed statewide, and now 34 of Georgia's 159 counties have passed their own FLOST referendums, with additional county referendums scheduled for May 2026.

In the Senate, Lt. Gov. Burt Jones has made it clear that one of his chamber's priorities will be to eliminate Georgia's state income tax. However, what is yet to be recognized is how the state will supplant the $16.2 billion in revenues the income tax generates. The current state income tax is a flat 5.19% and is set to decrease to 4.99% by 2027. This gradual decrease in income tax is mirrored by neighboring states like North Carolina, while other states like Tennessee and Florida do not have state income tax. To study the potential effects of doing away with Georgia's largest source of income, Lt. Governor Jones formed the Senate Special Committee on Eliminating Georgia's Income Tax. Recommendations from the committee will almost certainly be the basis of Senate legislation to eliminate the state income tax. However, the House of Representatives does have one advantage over the Senate that they will have to grapple with in January: tax legislation must start in the House chamber.

With one chamber looking to provide substantial property tax relief and the other chamber hoping to eliminate the state income tax, does something have to give? In short, yes. In providing property tax relief and/or eliminating the state income tax, funding for services will have to come from somewhere else; enter the sales tax. With the current sales tax cap at 9% the cap would need to be raised to provide for potential property tax relief or to make up for the loss of revenue if the state income tax is eliminated. Both chambers will also have a couple of other factors to consider, including some legislators' opposition to raising the sales tax cap and the fact that 2026 is an election year (for the entire General Assembly and key statewide offices). Case in point, Lt. Governor Jones has made eliminating the state income tax one of the main focuses of his gubernatorial campaign; on the House side, Speaker Burns and representatives have been touting property tax relief on the campaign trail.

With both chambers seemingly locked and loaded on their respective sides of the tax debate, any legislation that is introduced will face an uphill battle to achieve final passage. Additional tax legislation that is still alive from the 2025 session could also be in play as both chambers craft their proposals. While all members of the General Assembly have a shared goal of protecting Georgians from the unexpected gut punches on property tax bills and state income taxes, the path to that goal may be a rollercoaster ride for tax legislation in the 2026 legislative session.