The Georgia Senate passed a tax bill that updates conformity date for the federal IRC and decreases income tax rates. The Senate passed the bill by substitute and the House agreed to the substitute.
IRC Conformity Date
The Senate bill updates federal Internal Revenue Code (IRC) conformity date to February 9, 2018, with certain exceptions, for both:
- the corporate income tax; and
- individual income tax.
The previous IRC conformity date was January 1, 2017. The IRC conformity update applies to tax years beginning on or after January 1, 2017.
Possible Income Tax Reductions
The legislation includes temporary lower tax rates and a larger deduction. Specifically, the bill would:
- lower the top income tax rate for businesses and individuals from 6% to 5.75%, effective January 1, 2019, expiring December 31, 2025; and
- decrease the top income tax rate to 5.5% on January 1, 2020, expiring December 31, 2025, if the General Assembly and governor further approve.
In addition, the passed bill doubles the standard deduction, effective January 1, 2018, and expiring December 31, 2025.
Sales Tax Exemption for Jet Fuel
Finally, a sales and use tax exemption for jet fuel included in prior Georgia tax legislation was removed.
H.B. 918, as passed by the Georgia Senate on March 1, 2018
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