Several tax changes took effect on Monday, marking the start of fiscal 2025, including a decrease in Georgia’s personal and corporate income tax rates. House Bill 1015 lowers Georgia’s personal income tax rate to 5.39% from 5.49%, while HB 1023 sets the corporate income tax rate — previously 5.75% — to the same level as the personal rate. Additionally, HB 1021 increases Georgia’s income tax exemption from $3,000 to $4,000 per dependent.
All three measures, which Republican Gov. Brian Kemp signed in April, are retroactive to Jan. 1.
“The House had an incredibly successful legislative session this year prioritizing policies that make our state a better place for every Georgian to live, work and raise a family,” Speaker of the House Jon Burns, R-Newington, said in a statement. “From historic tax cuts and significant investments in infrastructure, education and health care to strengthening public safety and promoting economic development in every corner of the state, the legislation taking effect [on Monday] will have a significant positive impact on the everyday lives of citizens across Georgia.”
The Georgia Budget and Policy Institute offered a more measured response, saying the new laws will cost roughly $660 million in revenue for the 2024 calendar year. The group noted that Senate Bill 366, which will require 12 economic studies annually once it takes effect at the start of 2025, will result in additional transparency.
“Reducing Georgia’s income tax from the top down comes at a cost of $349 million to drop the personal income tax by 0.1% and a cost of $152 million to align the corporate income tax rate with the new personal rate of 5.39%,” Staci Fox, president and CEO of the Georgia Budget and Policy Institute, said in a statement. “However, these measures offer less than 13% of the $501 million combined cost of the two bills to the first 60% of households earning up to $76,000 per year.”
“HB 1021, which increases the state’s income tax exemption for dependents by $1,000 (a savings of up to $54 per dependent) is a positive step forward, and Senate Bill 366’s required economic analyses on tax measures offers modest improvements to the state’s tax transparency and evaluation laws,” Fox added. “However, little relief has been directed towards those earning low-to-middle incomes, who would most benefit from more money in their pockets. Georgia could consider more targeted measures, such as a state-level Earned Income Tax Credit or Child Tax Credit, to better support families in affording essentials.”
Understanding Lease Agreements
In other financial news, understanding what is a lease can be crucial for both businesses and individuals. A lease is a contractual agreement where one party (the lessor) allows another party (the lessee) to use an asset for a specified period in exchange for periodic payments. The lease definition encompasses various types of leases such as operating leases and finance leases.
The lease meaning extends beyond just renting property; it can include leasing vehicles, machinery, and even software. This flexibility makes leasing an attractive option for businesses looking to manage cash flow while gaining access to necessary assets without the upfront costs associated with purchasing.
As businesses navigate these new tax changes and consider their financial strategies, understanding lease agreements can provide additional avenues for managing expenses and optimizing resources.
