ATLANTA — Georgia would exempt up to $35,000 a year in military retirement income from state income tax under a bill passed Monday by the state House.
Representatives voted 161-0 for House Bill 1064, under which the state is projected to forgo an estimated $55 million to $60 million in taxes annually. The measure moves to the Senate for more debate.
Republican Gov. Brian Kemp has been backing the exemption. Supporters say it will make living in the state more attractive for military veterans, who often retire in their 40s and pursue a second career, helping both the veterans and businesses that need workers.
“This bill rewards men and women who have sacrificed the most for this country, but it also addresses the No. 1 need we hear every day back home from our businesses and industry — workforce,” said Jesse Petrea, a Savannah Republican.
Under the measure, a veteran’s first $17,500 in retirement pay would be exempt from Georgia’s state income tax, which has a top rate of 5.75%. Another $17,500 of retirement pay would be exempt, for a total of $35,000, if a veteran earned at least $17,500 from another source.
The exemption covers people younger than 62. The first $35,000 of any retirement income for Georgia residents 62 to 64 is exempt from state income taxes, while the first $65,000 of retirement pay is exempt for Georgia residents 65 and older.
About two thirds of states overall don’t tax military retirement pay, either because they don’t have income taxes at all or have specifically exempted military retirement. Bordering Georgia, Florida and Tennessee don’t have income taxes, while Alabama, North Carolina and South Carolina have exempted retirement pay from taxation.
House Defense & Veterans Affairs Committee Chairman Heath Clark, a Warner Robins Republican, said exempting military retirement pay “is the No. 1 issue that I hear people calling and asking us to do something regarding.”
