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Lawmakers Propose Military Retirement Income Tax Exemption in Georgia

A group of Georgia lawmakers want to exempt retirement income received as retirement benefits from military service from state income taxation.

A group of Georgia lawmakers want to exempt retirement income received as retirement benefits from military service from state income taxation.

House Bill 7 was filed by Republican state representative Jesse Petrea back in November and has garnered the co-sponsorship of Representatives Shaw Blackmon, Dave Belton, Bill Hitchens, Heath Clark, and Mike Glanton. Glanton is the only Democrat of the six top sponsors.

HB 7 amends OCGA 48-7-27 dealing with state income taxation exemptions and would add this measure among the exemptions. The language also excludes from taxation ” any survivor benefits derived therefrom” who also may receive the benefits.

The bill would take effect for tax years beginning January 1, 2020, and ending on December 31, 2030, though the majority of tax exemptions in the state of Georgia never sunset and are continuously renewed by lawmakers as the sunset approaches.

Georgia law already permits a state income tax exemption for military income received by a member of the National Guard or any reserve component of the armed services of the United States stationed in a combat zone or stationed in defense of the borders of the United States pursuant to military orders. You can see the dozens of other exemptions under the state income tax code here.

The bill has not gone without criticism. Ryan Graham, Vice Chairman of the Libertarian Party of Georgia, said of HB 7:

“While we applaud the attempt to allow SOME Georgians to keep the full value of their hard-earned retirement, we cannot support the bill. If the sponsor recognizes the harm done by income taxes, we encourage him to put forth a bill eliminating the state income tax, protecting all Georgians from those harms, not just a chosen few.”

The bill has been assigned to the House Ways & Means committee. None of the co-sponsors serve on the Ways & Means committee, but Clark and Glanton are both members of the Defense and Veterans Affairs committee.

The emails for the sponsors are as follows:

jesse.petrea@house.ga.gov
mike.glanton@house.ga.gov
bill.hitchens@house.ga.gov
shaw.blackmon@house.ga.gov
heath.clark@house.ga.gov
dave.belton@house.ga.gov

Lawmakers have until the 28th legislative day of session to pass legislation out of their respective chambers and on to the opposite legislative body in order for the bill to have an opportunity to become law this year. The legislative calendar has not yet been set.

House Bill 7 is below. [Click here to read the bill if you’re having trouble loading the PDF or are reading on a mobile device]

HB 7_2019

Jessica Szilagyi is a former Statewide Contributor for AllOnGeorgia.com.

7 Comments

7 Comments

  1. Shane Harsh

    January 25, 2019 at 6:11 am

    I hope this passes. NC doesn’t tax retirement pay, and GA has approximately the same amount of DoD installations. Although this wouldn’t make retirees wealthy, it’s a way to show that GA supports veterans.

  2. Clayton Laughlin

    January 25, 2019 at 9:46 am

    Jessica, thank you for the article. This is an important piece of legislation. As a military member about to retire after 32 years of service I can tell you that this decision impacts whether I retire in GA or elsewhere. I disagree with Mr. Graham. This is not about all or nothing for residents of GA, but a contributing factor towards the decision of thousands of retiring and retired veterans towards where they will reside. GA’s cost of living, geographical location, climate, and employment opportunities are major contributors also, but the exemption on military retirement is what drives many to FL, TN, TX etc. GA would stand to see a greater economic impact from the additional retirees it would gain and the reinvestment of the saved tax dollars back into GA communities than the current status quo. Hope you continue to follow the legislation. Look forward to the updates. V/R

  3. Michael Jordan

    February 10, 2019 at 10:05 pm

    Jessica, thank you for the article as well. Two of my children have taken jobs in Georgia and I would like to move from Virginia to be near them (and my grandkids), but Georgia’s income tax is actually higher than Virginia’s. North Carolina taxes military retirement as well, however I entered service long enough ago that I am grandfathered under the old rules and my military retirement is exempt from NC state tax. I would certainly prefer to live closer to my children in North Georgia vice North Carolina and will do so if this law passes. Regards

  4. Michael Smalls

    February 11, 2019 at 11:19 am

    I will be watching because I also plan to move to Georgia from SC if and when this bill passes.

  5. Clayton Laughlin

    February 18, 2019 at 9:57 am

    Jessica,

    Any updates on the bill? There is not a lot of information flowing. I have read the State Auditors Fiscal Note to State Rep Jesse Petrea regarding the estimated revenue loss. I love how they say “Revenue” vs tax income. Makes it sound as if they have done something to earn it. The note never mentions any study done to show the amount of “Revenue” would be pumped back into local economies. I know it was headed to committee, but it seems like that’s where it died.

    Any updates?

    V/R

    Looking for a State to retire in.

  6. Adam reyes

    April 11, 2019 at 12:18 pm

    As a retired Soldier my decision to stay in Georgia is based military retirement tax status. I retired almost three years ago but stayed so my children could finish school. Next year my youngest will graduate and we will revisit whether we stay here or move to a more tax friendly state. Alabama, Texas, Florida, or Nevada are all locations that are very appealing, staying in Georgia is a consideration we as a family really enjoy what the state has to offer and the weather is enjoyable. The decision to move becomes what is most beneficial for my family a little money spent to relocate (short term) to have less money in taxes taken out monthly (long term) versus not moving at all or relocating somewhere else in GA.

  7. Dave G

    December 7, 2020 at 10:30 pm

    GA politicians could care less about veterans. They appear to care on TV and the news but both sides of the aisle appear to not GAF or they would have passed HB7. Veterans receiving pensions from the military are a small number of those paying income taxes as a whole so it just shows their uncaring positions and greed.

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