Tax Breaks Erode Georgia’s Budget: Nearly $11 Billion in Foregone Revenue Collections in

Fy 2024

Georgia offers a wide array of tax credits, deductions and other tax breaks, also known as tax expenditures, that give preferential treatment to certain taxpayers and corporations to achieve policy goals. The tax breaks will cost the state nearly $11 billion in lost revenue in the 2024 fiscal year. Some tax breaks provide key protections for families, such as the sales tax exemption on groceries, while others provide credits or incentives to specific industries or special-interest groups. Several of Georgia’s largest tax breaks deliver outsized gains to select groups or industries—such as manufacturing, film or insurance—often with questionable benefit to the state or its people.

Georgia lacks a standardized review process to measure and compare the costs and benefits of all existing and proposed tax breaks. During the 20212022 session, however, the state enacted legislation that allows the chairs of the General Assembly’s tax-writing committees to request individual analyses on a limited number of tax expenditures. House Bill (HB) 1437, passed in 2022, also requires the House Ways and Means Committee and the Senate Committee on Finance to review all state tax credits, exemptions, and deductions and to produce a report to the General Assembly by December 1, 2023.

The costliest industry-specific tax break offered is Georgia’s Film Tax Credit, which is designed to attract film production by subsidizing as much as 30 percent of the costs and ranks as the largest tax subsidy of its kind nationally at an annual cost of about $1 billion annually. The state also offers major tax breaks targeted to insurance companies, multinational corporations and various industries. As state leaders commit billions in taxpayer dollars to finance an increasingly expansive ecosystem of tax credits, subsidies and indirect expenditures under the promise of accomplishing specific policy goals, such as job creation, greater transparency is urgently needed to provide a basic level of accountability and help safeguard future resources.