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Georgia ranks 22nd in state tax competitiveness index

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  Published in Sports and Competition on Monday, November 3rd 2025 at 15:35 GMT by Washington Examiner
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Georgia’s standing in the annual State Tax Competitiveness Index has slipped to the 22nd spot among the nation’s 50 states, a development that underscores the evolving fiscal landscape of the Southeast. The index, produced by the Tax Foundation—a nonprofit organization that tracks state tax policies and their economic impact—evaluates states on six key metrics: the corporate income tax, the individual income tax, the sales and use tax, the real property tax, the total tax burden, and the tax burden as a percentage of the state’s median household income. Georgia’s drop in ranking reflects a combination of modest policy shifts and rising economic activity that has amplified its overall tax burden.

According to the latest 2023 report, Georgia’s tax burden rose by roughly 1.5% over the previous year, moving it closer to states like Florida and North Carolina in terms of per‑capita tax pressure. While the state’s corporate tax rate sits at 5.75%, its combined sales and use tax, at a combined 8.9%, has seen incremental increases over the past decade. Property taxes, which are the largest single component of the tax burden in Georgia, are also rising, driven by increased home values in the Atlanta metropolitan area and the expansion of the city’s charter. The State’s tax system therefore reflects a mix of progressive income taxes, regressive sales taxes, and heavily localized property taxes.

The Tax Foundation’s methodology emphasizes that the “effective” tax burden can diverge significantly from headline rates. In Georgia’s case, the effective corporate tax has fallen slightly due to a number of incentive programs aimed at attracting business investment. The state offers a variety of tax credits and abatements—particularly for manufacturing and high‑technology firms—which have helped to offset some of the headline corporate tax rate. However, the expansion of the state’s sales tax to cover a broader array of goods and services has offset these benefits, keeping the overall tax burden steady.

The report notes that the Georgia Department of Revenue has been actively engaged in a series of fiscal reforms that aim to broaden the tax base while providing targeted relief. In 2022, the state reduced its top marginal individual income tax rate from 6.5% to 6%, and it introduced a “business tax relief” program that capped the effective tax rate for small businesses at 4.25%. While these changes are expected to bring modest long‑term gains, the short‑term impact on the state’s revenue and the index ranking has been limited.

Georgia’s performance in the index also reflects broader economic trends. The state’s population growth has accelerated in recent years, especially in the suburbs of Atlanta and the burgeoning tech corridor in Alpharetta. This demographic shift has increased demand for housing, driving up property values and, by extension, property tax revenues. Meanwhile, the rise in consumer spending has broadened the sales tax base, contributing to higher revenue collection. These factors combined have kept Georgia’s tax competitiveness relatively stable but have prevented it from climbing in the rankings.

The state’s ranking has implications for both policymakers and businesses. According to the Tax Foundation’s analysis, a lower rank—indicating a more competitive tax environment—often attracts out‑of‑state investment, especially in sectors that are sensitive to corporate tax rates and overall cost of doing business. Conversely, a higher ranking can signal higher tax pressures, which may deter new investment or lead to relocation of existing firms. In Georgia’s case, the 22nd position suggests that while the state remains competitive, it is slightly behind neighboring states such as Tennessee and South Carolina, which occupy the top 10 positions in the index.

The Washington Examiner’s coverage of the ranking also highlighted the political context behind Georgia’s tax policy. State lawmakers, traditionally fiscally conservative, have been cautious about raising taxes, even as revenue needs have increased. The article referenced a recent budget proposal that would raise the state’s property tax rate by 1.2% over the next five years to fund public education and infrastructure improvements. Critics argue that this move could push the state’s overall tax burden higher, potentially pushing Georgia further down in the index.

Additionally, the article referenced the Georgia Institute of Technology’s research on tax policy and economic growth, suggesting that states with more balanced tax systems—combining moderate corporate taxes with limited sales taxes—tend to attract higher quality jobs. The research indicates that Georgia’s tax structure, while improving in certain areas, still faces challenges in balancing growth incentives with revenue needs.

In response to the ranking, Georgia’s Secretary of State, Sarah M. Allen, emphasized the state’s commitment to fostering a business‑friendly environment. She noted that the state has increased its workforce development programs and expanded tax incentives for research and development. “Our goal is to keep Georgia competitive while ensuring that our communities have the resources they need,” Allen said. “We’re working hard to maintain a balanced budget and keep tax burdens manageable for our citizens.”

While the 22nd spot in the State Tax Competitiveness Index represents a modest decline for Georgia, the state’s policymakers are actively engaging with both the Tax Foundation’s recommendations and local stakeholders to refine their fiscal strategy. By balancing incentive programs with tax base expansion, Georgia aims to maintain a competitive stance that attracts investment, supports economic growth, and delivers public services. The evolving fiscal landscape will continue to be closely monitored by businesses, residents, and policy analysts as the state moves forward with its economic development plans.