Introduction: Georgia’s net tax collections in May 2023 witnessed a decrease of $205.7 million, equivalent to -7.6 percent, compared to the same period in 2022. This article provides an exclusive and comprehensive analysis of the tax categories that contributed to this decline, highlighting key components and noteworthy trends. By delving into individual income tax, sales and use tax, corporate income tax, motor fuel taxes, and motor vehicle tag and title fees, we aim to shed light on the factors behind Georgia’s recent tax revenue fluctuations.
I. Individual Income Tax: Individual Income Tax collections recorded a substantial decrease of $387 million (-23.4 percent) in May 2023, with net collections amounting to approximately $1.27 billion. Several factors contributed to this decline:
a) Individual Income Tax refunds issued saw a significant increase of $159.4 million (119.3 percent). b) Individual Withholding payments, on the other hand, experienced a positive growth of $80.9 million (6.8 percent) compared to fiscal year 2022. c) Individual Income Tax Return payments observed a noteworthy decline of $320.2 million (-63.8 percent) compared to May 2022. d) All other individual categories, including Non-Resident Return payments, combined for a modest increase of $11.7 million.
II. Sales and Use Tax: Gross Sales and Use Tax collections in May 2023 reached $1.47 billion, indicating a growth of $32.1 million (2.2 percent) compared to the previous fiscal year. Net Sales and Use Tax also demonstrated a positive trend, increasing by $15.7 million (2.2 percent) from May 2022, with net sales tax totaling $727.1 million. Adjusted Sales Tax distribution to local governments amounted to $725.3 million, representing an increase of $13.6 million (1.9 percent) compared to the same period last year. Sales Tax refunds experienced a significant rise of $2.8 million (93.6 percent) compared to May 2022.
III. Corporate Income Tax: Corporate Income Tax collections displayed a notable increase of $30.4 million (38.6 percent) compared to fiscal year 2022, with net Corporate Tax collections totaling $78.8 million for the month. The key components contributing to this growth are as follows:
a) Corporate Income Tax refunds issued decreased by $6.8 million (-49.5 percent). b) Corporate Income Tax Return payments witnessed a positive surge of $10.2 million (33.7 percent) compared to fiscal year 2022. c) All other Corporate Tax categories, including Corporate Estimated payments, demonstrated a combined increase of $13.4 million.
IV. Motor Fuel Taxes: Motor Fuel Tax collections for May experienced a significant increase of $180.2 million compared to the same period last year when Governor Kemp’s Executive Order suspended the Motor Fuel Excise Tax for the entire month. This boost in revenue can be attributed to the lifting of the tax suspension.
V. Motor Vehicle – Tag & Title Fees: Motor Vehicle Tag & Title Fees in May 2023 witnessed a slight decrease of $0.4 million (-1.2 percent) compared to fiscal year 2022. Similarly, Title Ad Valorem Tax (TAVT) collections declined by $2.3 million (-3.4 percent) from FY 2022 when TAVT totaled $69.2 million.
Conclusion: In summary, Georgia’s net tax collections experienced a decrease of $205.7 million (-7.6 percent) in May 2023 compared to the previous year. The decline can primarily be attributed to the significant decrease in Individual Income Tax collections, influenced by a rise in refunds issued and a decline in Income Tax Return payments. Conversely, Sales and Use Tax collections exhibited positive growth, accompanied by an increase in Corporate Income Tax collections. Additionally, Motor Fuel Taxes recorded a substantial increase due to the expiration of the temporary tax suspension. The analysis provides valuable insights into the dynamics of Georgia’s tax revenue landscape, showcasing both areas of concern and areas of resilience.
Keywords: Georgia, net tax collections, tax categories, individual income tax, sales and use tax, corporate income tax, motor fuel taxes, motor vehicle tag and title fees.