(The Center Square) – Georgia faces tough competition from its neighbors to the north and south when it comes to tax rates, according to a report from the Tax Foundation.
The Peach State ranks 26th in the 2025 State Tax Competitiveness Index. Florida ranked fourth in the annual analysis, and Tennessee eighth. Neither state has an income tax.
Georgia has a flat-rate income tax that took effect in January. It will decrease from 5.39% to 4.99% by 2028, according to the Tax Foundation’s analysis. The state ranks 31st for its income tax policy.
North Carolina also has a flat income tax rate that is 4.5%. The state, which borders Georgia to the north, ranked 12th in the report.
The state’s lowest rank was for property tax at 34.
“Like many states, Georgia also taxes tangible personal property,” the report said. “The state offers a de minimis exemption, but it is quite low.’
Georgia fared better with its corporate tax rate, coming in at 12th.
“Since 2024, Georgia’s corporate income tax rate has been aligned with the individual income tax rate and is set to decrease from the current 5.39% to 4.99% by 2028,” the report said. “However, the state does not allow first-year expensing of capital investment and imposes a nuisance capital stock tax of up to $5,000 per year.”
The state income tax is 4%, but local sales taxes drive the combined rate of 7.42%.
The report analyzes 150 variables of the major taxes: corporate, individual income, sales and excise, property and wealth taxes and unemployment insurance taxes. Individual income taxes are weighed the heaviest at 30.5%, followed by sales and excise taxes (22.8%), corporate taxes (21.3%), property and wealth taxes (14.9%), and unemployment insurance taxes (10.5%).
The states with the top tax competitiveness scores are Wyoming, South Dakota, Alaska, Florida and Montana. Maryland, Connecticut, California, New Jersey and New York have the lowest scores.
