The Peach State Has Big Plans To Eliminate Income Taxes (And It's Not The Only One)

Georgia officially started its steady march to becoming a no-income-tax state in 2022 by enacting a tax-relief plan that largely aided the state's higher earners. This 2022 tax overhaul flattened the state's tax rate and laid out a schedule for further reductions. In 2025, Governor Brian Kemp signed House Bill 111, which accelerated those cuts again and dropped the rate to 5.19% for that tax year. The bill also scheduled further yearly reductions by .1% until the state income tax reaches 4.99% — though they could be delayed depending on the state's revenue.

For context, Georgia has experienced strong economic growth in recent years. It ranked among the states with the best economies in 2024, and a report by the recently formed Georgia Senate Special Committee on Eliminating Georgia's Income Tax revealed the state's revenues exceeded expenses by $1.8 billion in 2025. In February 2026, the state made another big stride in these efforts when Senate Bill 476 was passed. The bill recommends that taxpayers will not have to pay state taxes on the first $50,000 they make in a year if they file individually, while joint-filing couples could enjoy the same benefit for up to $100,000. 

Notably, these shifts aren't happening in isolation: Several other nearby states — including Mississippi, Missouri, Kentucky, and Oklahoma — are also moving to reduce or eliminate their residents' income tax burdens. In March 2026, Louisiana Governor Jeff Landry also openly called for the "total elimination" of his state's income tax at a Louisiana legislative session.

Apart from housing some of the best places for retirees with no savings, many of the states working toward reduced income taxes have Republican leadership. As of March 2026, Georgia, Mississippi, Missouri, and Oklahoma all have Republicans occupying the governor's office and both legislative chambers. Kentucky has a Democratic governor, but Republicans still control the legislature and have already put the state on a gradual path toward lower income taxes.

Most of these states are also in the South or lower Midwest, where local lawmakers often weigh their states' success against that of no-income-tax states like Florida, Tennessee, and Texas. Georgia lawmakers in particular argue that lower taxes keep the state attractive to businesses, and make it easier for residents to find professional success within the local economic landscape. When viewed in this light, cutting income taxes could be seen as a growth strategy, a way to address the high cost of living, or both.

Regardless of their political affiliation, most people don't want to pay taxes. It may be for this reason that even Democratic Governor Cory Booker proposed similar legislation in New Jersey in March 2026. Still, the combination of no state income tax and some critical tax breaks from the federal government could give residents in these Southern states substantial financial relief — especially as the cost of living keeps rising. But whether this relief will cost states or their taxpayers in other ways remains to be seen.