Taxes are always top of mind for voters, whether it’s income, property or sales taxes, and lawmakers are constantly weighing how to balance rates with the revenue needed to fund government.
Georgia lawmakers this week opened debate on how to ease the state’s tax burden — with some calling for the full elimination of the income tax. The conversation reflects a national reality: Americans are voting with their feet, leaving high-tax states behind.
As that debate begins, it’s worth taking a broader look at Georgia’s overall tax competitiveness: how our system ranks nationally, where we’re strong and where there’s room to improve.
Georgia lawmakers continue to lower income taxes
| State | Corporate income tax rate | Personal income tax rate |
| Alabama | 6.5% | 5% |
| Florida | 5.5% | 0% |
| Georgia | 5.19% | 5.19% |
| North Carolina | 2.25% | 4.25% |
| South Carolina | 5% | 6% |
| Tennessee | 6.5% | 0% |
Rates reflect the highest tax rate for Alabama and South Carolina, which have graduated tax brackets.
Over the past three years, state leaders have devoted significant energy to income tax reform. That makes sense, because economists generally agree that income taxes create the most economic distortions, and income taxes get the most attention from businesses and workers deciding where to relocate. How much money governments collect in taxes is important, but so is which kinds of taxes they rely on. In 2022, Georgia adopted a flat tax of 5.49%, replacing the previous six-bracket structure that topped out at 5.75%. Before that change even took effect, Gov. Brian Kemp and lawmakers cut the rate to 5.39%.
This year, the General Assembly dropped the rate again to 5.19%. Thanks to built-in revenue triggers, the rate could eventually fall to 4.99%, and a new proposal that will be before lawmakers when they convene next year would push it even lower, to 3.99%.
Georgia also ties its corporate tax rate directly to the individual income tax rate. While Florida and Tennessee levy no personal income tax, their corporate rates stand at 5.5% and 6.5%, respectively. North Carolina stands out as a state with a much lower corporate tax rate.
Even with these changes, the Tax Foundation ranks Georgia’s corporate tax system 12th best in the nation but just 31st for individual income taxes.
Sales taxes are middle of the pack
| State | State sales tax | Average local rate |
| Alabama | 4% | 5.29% |
| Florida | 6% | 1% |
| Georgia | 4% | 3.42% |
| North Carolina | 4.75% | 2.25% |
| South Carolina | 6% | 1.5% |
| Tennessee | 7% | 2.56% |
The trade-off for lower income taxes is often higher sales taxes. Many argue it is fairer, and better for an economy, to tax people on what they purchase rather than what they earn.
Georgia ranked 23rd nationally on sales taxes. The state rate is a modest 4%, but local add-ons average 3.42%. And that number is often higher in metro Atlanta.
For comparison, Tennessee’s state sales tax is 7% with a 2.56% local average. Alabama also sets its state rate at 4%, but local governments tack on an average of 5.29%, pushing effective rates much higher than Georgia’s.
Property taxes spark the most frustration
| State | Effective Property Tax Rate | Ranking |
| Alabama | 0.36% | 49 |
| Florida | 0.74% | 30 |
| Georgia | 0.77% | 26 |
| North Carolina | 0.62% | 33 |
| South Carolina | 0.47% | 47 |
| Tennessee | 0.49% | 43 |
Note: 1-50 rankings are based highest-to-lowest
No tax stirs more emotion than property taxes. Unlike income or sales taxes, which are straightforward, property taxes rely on government assessments that often feel unpredictable to homeowners.
This unpredictability has been magnified by rising property values. According to Georgia MLS, metro Atlanta home prices have jumped about 60% in the past five years. That means many homeowners face significantly higher property tax bills, even if their income – or the millage rate – hasn’t changed.
The debate aside, Georgia’s overall property tax burden stands at 26th (highest) nationally. The Tax Foundation gave the state an effective tax rate of 0.77%. That was up from 0.69% the year prior. That is the highest rating rate among our neighbors: Alabama is 49th, South Carolina is 47th, Tennessee is 43rd, North Carolina is 33rd and Florida is 30th.
But because property taxes are levied locally (the state’s property tax rate is zero), effective rates vary widely. In Stewart County, the effective rate is 1.7%, comparable to New Jersey, but with median home values of just $53,000, the five-year property tax estimate is only $907. The five counties with the highest median property taxes paid are: Fulton ($3,847), Forsyth ($3,747), Gwinnett ($3,381), Fayette ($3,168) and Oconee ($3,056). You can find effective property tax rates and average taxes paid from every county in Georgia here.
This disconnect explains why property taxes often feel arbitrary and unpopular, despite Georgia’s rates being lower than many high-tax states.
Georgia’s low tax burden tells the full story
Georgia has rightly been praised for its competitive business climate, and lawmakers have made tax reform a consistent priority. The move toward a flatter, lower income tax has positioned Georgia to compete more effectively with its neighbors while maintaining a stable revenue base.
Still, the Tax Foundation’s 2025 State Tax Competitiveness Index places Georgia only 26th overall, which should raise eyebrows among lawmakers. That relatively low ranking is because the methodology places a greater emphasis on income taxes, because, again, they create more economic distortions than others. But that’s not the only way to look at things. The overall tax burden that Georgia charges its residents – meaning the average of all the state and local taxes residents pay as a percentage of average income– is eighth lowest in the country at 8.9%. That matches South Carolina, and is even slightly better than Florida’s 9.1%.
Georgia may not top every tax ranking, but the bigger picture is clear: Families and businesses here keep more of what they earn. With one of the nation’s lowest overall tax burdens and a steady push for reform, the state is well-positioned to strengthen its competitiveness and continue attracting growth in the years ahead.