(The Center Square) – Georgia’s fuel tax collections in May were $196.6 million lower when compared to last year, in part because of a two-month fuel tax suspension approved by state lawmakers and second-term Republican Gov. Brian Kemp.
Overall state tax collections were down 12.6% from May 2025, totaling $339.1 million, as other tax collections also declined, according to information from Kemp’s office.
Individual income tax collections decreased by $97.7 million. Corporate income tax revenue dropped by $60.5 million, a 50% decline. The state also experienced a $1 million decline in tag, tax and title fee collections and $4.6 million less in title ad valorem tax collections.
Sales taxes were up by 7.4%, or $117.9 million, when compared to last year.
Net tax revenue collections are up year-to-date when compared to last year by $344.6 million and are at $30.8 billion for the 2026 fiscal year, according to the governor’s office. May is the 11th month of Georgia’s fiscal year, which runs from July 1 to June 30.
Gov. Brian Kemp extended the fuel tax suspension for two additional weeks after it expired on May 20, citing a state of emergency amid soaring gas prices due to the conflict in Iran. He is asking state lawmakers to approve the extension when they meet in a special session on June 17.
Motor fuel tax funds transportation projects in Georgia.
The Center Square was unsuccessful prior to publication getting comment from Kemp on details of a specific plan to recoup revenue losses from the sales tax suspension.
Georgia’s budget is already lean. Kemp slashed $344 million from it after lawmakers approved a drop in the state’s income tax.
An analysis by the Georgia Budget and Policy Institute shows the state had about $15 billion in reserves when the legislative session started, according to the report. It was split between the Revenue Shortfall Reserve, which had about $6 billion, and undesignated overflow at $9 million. Lawmakers approved $6.2 billion through mid-year budget adjustments.
The gas tax suspension, tax rebates and $4 billion of infrastructure projects will decrease reserves from $15 billion to $9 billion, according to the report.
Kemp warned lawmakers that the state is still short of revenues to meet the fiscal year 2027 budget.
“When I introduced my balanced budget recommendation in January, it was based on a general fund revenue estimate of $36.6 billion,” Kemp said as he signed the budget. “With the tax cuts the General Assembly passed, and I signed into law yesterday, the state must now address a reduction in revenue for this coming fiscal year of nearly $1 billion, and that’s assuming we don’t have an economic downturn.”
