Day: August 12, 2026

Georgia’s net tax collections totaled $2.57 billion in July, an increase of $78.1 million or 3.1 percent compared to July 2025, opening Fiscal Year 2027 with broad revenue growth driven by a 10.1 percent surge in gross sales and use tax collections that pushed $894.5 million in adjusted distributions to local governments across the state.

Key Takeaways

• Georgia net tax collections reached $2.57 billion in July, up $78.1 million (3.1%) over July 2025, reversing last year’s 2.7% decline in the same month.
• Gross sales and use tax collections surged 10.1% to nearly $1.78 billion; net sales tax rose 10%, and adjusted distributions to local governments climbed to $894.5 million, an $85.9 million increase.
• Corporate income tax collections jumped 34.3% to $72.2 million, driven by a 38.9% increase in estimated payments and a 31% decline in refunds.
• Individual income tax collections fell 2.1% ($27.1 million), the second consecutive monthly decline after a 6.7% drop in June, with withholding payments down 2.1% and return payments falling 49.2%.
• Motor fuel tax collections declined 5.4%, and motor vehicle tag and title fees fell 5.4%, while the Title Ad Valorem Tax (TAVT) increased 4.9%.

Sales Tax Growth Is Carrying the Revenue Picture Into the New Fiscal Year

The July revenue figures, released by Governor Brian Kemp’s office through the Georgia Department of Revenue, show that consumer spending is functioning as the primary engine of state revenue growth heading into FY 2027. Gross sales and use tax collections reached nearly $1.78 billion for the month, an increase of $162.8 million over July 2025, representing a 10.1 percent year-over-year gain. Net sales and use tax revenue rose by $79.2 million, or 10 percent, compared to the same month last year.

The sales tax growth is flowing directly to local governments. Adjusted sales tax distributions to counties and municipalities across Georgia totaled $894.5 million in July, an increase of $85.9 million over last year’s distribution. That funding supports local budgets for services ranging from public safety and infrastructure to schools and parks. Sales tax refunds also declined by $2.3 million, or 23.7 percent, compared to July of the prior fiscal year, further boosting the net figures. The strength of the sales tax line stands in contrast to the July 2025 opening of FY 2026, when net sales tax revenue actually declined 1.6 percent.

Corporate Income Tax Continues an Upward Trajectory While Individual Income Tax Slides

Corporate income tax collections for July reached $72.2 million, an increase of $18.4 million or 34.3 percent over the same month last year. The gain was fueled by two factors: corporate estimated payments rose 38.9 percent ($17.1 million increase), and corporate income tax refunds declined 31 percent ($9.1 million decrease). The performance extends a trend that began in June, when corporate collections rose 7 percent year over year. All other corporate tax payments, including return payments, were down a combined $7.8 million, suggesting the growth is concentrated in the estimated payment category rather than spread across all corporate filing types.

Individual income tax, the state’s single largest revenue category, moved in the opposite direction. Collections for July decreased by $27.1 million, or 2.1 percent, from the $1.27 billion collected in July 2025. Income tax withholding payments, which reflect payroll-based collections from employers, declined $26.2 million or 2.1 percent. Individual income tax return payments dropped $35.1 million, or 49.2 percent. The one partially offsetting factor was a $29.4 million decline in refunds issued (a 28.9 percent decrease), which reduced the net impact of the collection decline. The individual income tax slide follows a sharper 6.7 percent drop in June, when collections fell by nearly $100 million, driven significantly by elevated refund activity.

The FY 2027 Opening Reverses Last Year’s Soft Start

The July 2026 revenue report represents a reversal from the same period a year ago. In July 2025, the opening month of FY 2026, Georgia’s net tax collections totaled $2.49 billion, a decrease of $70.1 million or 2.7 percent from the prior year. That decline was attributed in part to a 20-basis-point reduction in individual and corporate tax rates that had taken effect, which reduced the comparable tax base. Georgia’s individual income tax rate was lowered to a flat 4.99 percent, and the standard deduction was increased to $15,000 for single filers and married couples filing jointly.

The current-year rebound suggests that consumer spending and corporate profitability are outpacing the drag from lower individual tax rates. The Governor’s office released the figures without accompanying commentary on the economic drivers behind the growth, but the sales tax data in particular points to sustained consumer activity across the state. Georgia’s economy has been supported by ongoing commercial development in the Atlanta metropolitan area, logistics and distribution sector expansion, and continued population growth that drives taxable retail transactions. Whether the sales tax momentum holds through the remainder of the fiscal year will depend on consumer confidence, employment trends, and any national-level economic shifts that filter into state-level spending patterns.

Motor Fuel and Vehicle Revenue Shows Mixed Signals

Motor fuel tax collections for July totaled approximately $183.9 million, a decline of $10.6 million or 5.4 percent from July 2025. The drop may reflect a combination of factors, including fuel price fluctuations, seasonal driving patterns, and the continued gradual shift toward electric and hybrid vehicles that reduce per-mile gasoline consumption. Motor vehicle tag and title fee collections also declined by $2 million or 5.4 percent, suggesting a softening in new vehicle registrations or transfers during the month.

The Title Ad Valorem Tax, which is assessed on vehicle purchases and based on the fair market value of the vehicle, moved in the opposite direction. TAVT collections rose $3.6 million or 4.9 percent over July 2025, indicating that while fewer vehicles may have changed hands, the vehicles that were purchased carried higher assessed values. The divergence between title fees (down) and TAVT (up) points to a market in which transaction volume may be declining while average vehicle values continue to rise, a pattern consistent with national automotive pricing trends.

 

FAQs

How Much Did Georgia Collect in Total Tax Revenue in July 2026?

Georgia’s net tax collections totaled $2.57 billion in July 2026, an increase of $78.1 million or 3.1 percent compared to July 2025. The month represents the opening of Fiscal Year 2027.

How Much Did Local Governments Receive From the Sales Tax?

Adjusted sales tax distributions to local governments across Georgia totaled $894.5 million in July, an increase of $85.9 million over the same month in the previous fiscal year. The growth was driven by a 10.1 percent surge in gross sales and use tax collections.

Why Did Individual Income Tax Revenue Decline?

Individual income tax collections fell 2.1 percent ($27.1 million) in July. Withholding payments from employers decreased 2.1 percent, and individual return payments dropped 49.2 percent. Georgia’s flat income tax rate of 4.99 percent and increased standard deductions, which took effect previously, have contributed to the ongoing downward pressure on individual income tax collections.