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Georgia: Fuel Tax Suspension Results in May Net Tax Revenue Decline of 12.6%

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ATLANTA ~ Georgia's Net Tax Revenue Collections Decrease in May

In a recent report released by the State of Georgia, it was revealed that net tax revenue collections for the month of May totaled $2.35 billion, marking a decrease of $339.1 million or 12.6% compared to the same period in FY 2025. This brings the year-to-date net tax revenue collections to $30.8 billion, showing an increase of $344.6 million or 1.1% from last year's collections through eleven months.

The decrease in net tax revenue collections for May can be attributed to several factors, including the recent suspension of motor fuel taxes effective March 20, 2026. When excluding the impact of this suspension, revenues for the month were down by 5.7% compared to last year. However, year-to-date collections remained up by 1.8%.

Another factor that affected monthly comparisons was last year's extension of return and payment deadlines for individual and corporate income taxes due to Hurricane Helene's impact. With some collections being shifted between months, April and May provide a more accurate picture when viewed together. On a combined basis, net tax collections for these two months were down by 1.9% from the same period in 2025 but showed an increase of 2.5% when excluding motor fuel changes.

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A breakdown of tax categories further explains the overall decrease in net tax revenue for May:

Individual Income Tax: Collections from individual income tax totaled $1.23 billion, showing a decrease of $97.7 million or 7.4% compared to last year's collection of nearly $1.33 billion.

The following components within individual income tax contributed to this decrease:

- Individual income tax refunds issued (net of voided checks) decreased by $99.8 million or 48.1%.

- Individual withholding payments increased by $8.4 million or 0.7% from the previous fiscal year.

- Individual income tax return payments declined by $163.3 million or 59.1% from FY 2025.

- All other individual tax categories, including estimated payments, were down by a combined $42.6 million.

Sales and Use Tax: Gross sales and use tax collections for May totaled approximately $1.72 billion, showing an increase of $117.9 million or 7.4% compared to FY 2025. Net sales and use tax also increased by $36.7 million or 4.7% from last year's collection of $783.5 million. The adjusted sales tax distribution to local governments saw an increase of $70.1 million or 8.7%, while sales tax refunds for May increased by $11.1 million compared to the previous fiscal year.

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Corporate Income Tax: Collections from corporate income tax for May totaled $60.6 million, marking a decrease of $60.5 million or 50% compared to last year's collection of $121.2 million.

The following components within corporate income tax contributed to this decrease:

- Corporate income tax refunds issued (net of voids) increased by $13.6 million or 132% compared to FY 2025.

- Corporate income tax return payments decreased by $34.9 million or 56.5% from May 2025.

- All other corporate tax types, including estimated payments, were down by a combined $12 million.

Motor Fuel Taxes: Motor fuel tax collections saw a significant decrease of $196.6 million or 99.% compared to FY 2025 due to Governor Kemp's Executive Order suspending the motor fuel excise tax for taxpayer relief.

Motor Vehicle - Tag & Title Fees: For the month of May, motor vehicle tag & title fees decreased by $1 million or 3%, while title ad valorem tax (TAVT) collections decreased by $4.6 million or 5.6% from May 2025.

Overall, the decrease in net tax revenue collections for May can be attributed to various factors, including the suspension of motor fuel taxes and the impact of last year's extension of return and payment deadlines. However, when looking at year-to-date collections, there is still a slight increase compared to last year's numbers. The State of Georgia will continue to monitor these trends and make necessary adjustments to ensure stable revenue collections in the future.

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