Peach Tree Times

Atlanta, GA - The State of Georgia saw an increase in tax revenues in the month of January, with collections totaling $3.05 billion, representing a 2.1 percent increase compared to the same period last year. This news comes as a positive development for the state's economy, which has been recovering from the impact of the pandemic.

The increase in tax collections was driven primarily by the resumption of the state's motor fuel excise tax, which had been suspended during the first seven months of the previous year. This resulted in a year-to-date increase in net tax revenue of $315.7 million, or 1.7 percent, over the same period in FY 2023.

Despite the overall increase in tax revenues, it is important to note that when excluding the motor fuel tax changes, revenues for the seven months ended in January were down by 2.7 percent compared to the previous year. This indicates that there are still challenges that the state needs to address in order to fully recover its pre-pandemic levels of tax revenue.

The breakdown of tax categories reveals some interesting trends. Individual Income Tax collections for January showed a slight decrease of $5.6 million or -0.3 percent compared to the previous year. This decrease was primarily driven by a decrease in Individual Income Tax refunds issued, while Income Tax Withholding payments increased and Individual Income Tax Estimated payments decreased.

Gross Sales and Use Tax collections for January saw an increase of $11.7 million or 0.7 percent compared to FY 2023. However, net Sales and Use Tax only increased by $1.8 million or 0.2 percent, indicating that there were higher Sales Tax refunds during this period.

On the other hand, Corporate Income Tax collections for January experienced a significant decrease of $110 million or -43.3 percent compared to the previous year. This decrease was mainly due to an increase in Corporate Income Tax refunds issued and a decrease in Corporate Income Tax Estimated payments.

Lastly, Motor Fuel Tax collections saw a substantial increase of $177.4 million compared to last year. This can be attributed to Governor Kemp's Executive Order to suspend the state excise tax, which was in effect during the entire month of December, resulting in no collection of the motor fuel excise tax in January.

Overall, while the January tax revenue numbers show a positive trajectory for the State of Georgia, it is important to consider the adjusted year-to-date figures, which indicate a decrease in revenues. This suggests that the state's economy is still on the path to recovery and will require continued efforts to stimulate growth and increase tax revenues.

As Governor Kemp stated, "The increase in tax collections in January is a positive sign for our state's economy. However, we must remain vigilant and continue to implement measures to support economic recovery and ensure long-term fiscal stability."