Texas vs Georgia Taxes
Compare the total tax burden between Texas (no income tax) and Georgia (1% – 5.39%). Enter your income to see which state saves you more.
Georgia vs Texas: Atlanta's corporate HQ depth versus Texas's zero-tax recruiting pitch
Georgia and Texas are the Southeast's and Southwest's premier business states, respectively, and they compete aggressively for corporate headquarters, film production, and tech expansion. Georgia imposes a 5.49% flat income tax (as of 2024), while Texas charges zero. That's a $8,235 difference on $150,000 in income—a substantial gap that Texas uses relentlessly in its economic recruitment messaging.
But Georgia has counter-arguments that resonate with employers and workers. Atlanta is the undisputed capital of the Southeast, home to 18 Fortune 500 headquarters (third most in any U.S. metro), the world's busiest airport (Hartsfield-Jackson), and one of the country's strongest Black professional communities. Georgia's film industry tax credit has made Atlanta the "Hollywood of the South." Texas's economy is larger in absolute terms, but Georgia's concentration of corporate talent in a single metro creates network effects that Dallas and Houston can't easily replicate.
On the tax front, Texas compensates for zero income tax with property taxes averaging 1.60%—nearly double Georgia's 0.83%. Sales taxes are comparable: Texas at 6.25% base versus Georgia's 4% base, though combined rates in major metros are similar (8-8.5%). For a family buying a $400,000 home, Texas's extra property tax costs about $3,080/year. The breakeven income level—where Georgia's income tax equals Texas's property tax premium—is roughly $56,000. Above that income, Texas is cheaper; below it, Georgia is.
Key Differences Beyond Income Tax
| Category | Texas | Georgia |
|---|---|---|
| Property Tax | Effective rate ~0.83%; homestead exemptions vary by county; Atlanta metro moderate | Effective rate ~1.60%; homestead exemption of $100,000 on school taxes for primary residence; aggressive reassessment in growing areas |
| Sales Tax | Base rate 4%, combined up to 8.9% with local option sales taxes; groceries exempt | Base rate 6.25%, combined up to 8.25%; groceries exempt; more uniform local additions |
| Retirement Income | Social Security exempt; up to $65,000/person retirement income exclusion for age 62+; very generous | No state income tax on any retirement income |
| Business Taxes | Corporate income tax 5.75%; generous credits: film (20-30%), jobs (up to $3,500/job), R&D, ports | No corporate income tax; franchise (margin) tax 0.375%-0.75% on revenue above $2.47M; Chapter 313 incentives (phased out, replaced by Chapter 403) |
| Cost of Living | Atlanta metro affordable by major-city standards; suburbs like Alpharetta and Marietta very competitive | Austin expensive; Dallas, Houston, San Antonio moderate; overall at national average |
Who Benefits from Moving?
Mid-career professionals earning $150K
A worker earning $150,000 pays about $8,235 in Georgia income tax versus $0 in Texas. But on a $400,000 home, Texas property taxes cost $6,400 versus Georgia's $3,320—a $3,080 difference. Net savings in Texas: about $5,155/year. That's significant, but factor in that Atlanta salaries in finance and consulting often match or exceed Houston/Dallas.
Retirees 62+ with $80K in retirement income
Georgia's $65,000 retirement income exclusion (per person) for those 62+ means a couple with $80,000 each pays virtually no Georgia income tax on their retirement income. Combined with lower property taxes, Georgia can be cheaper than Texas for retirees—a counterintuitive result.
Small business owners scaling from $1M to $5M revenue
Georgia's 5.75% corporate tax hits earlier and harder than Texas's franchise tax (which exempts revenue under $2.47M). A business with $3M in revenue and $300,000 in net income pays about $17,250 in Georgia corporate tax versus roughly $5,625-$11,250 in Texas franchise tax. Texas has a clear small-business advantage.
Bottom line: At $150,000 income with a $400,000 home, Texas saves about $5,155 per year over Georgia in total state taxes—but Georgia's generous $65,000 retirement income exclusion means retirees 62+ often find Georgia cheaper overall.
Tax at Different Income Levels
| Income | Texas Total Tax | Georgia Total Tax | Annual Savings |
|---|---|---|---|
| $75,000 | $13,687 | $16,733 | +$3,046 |
| $100,000 | $21,099 | $25,493 | +$4,394 |
| $150,000 | $36,542 | $43,631 | +$7,089 |
| $200,000 | $50,885 | $60,669 | +$9,784 |
Based on single filer, standard deduction, 2025 tax year. Includes federal income tax, state income tax, and FICA.
Why the difference
You'd pay $4,394/year ($366/month) more in Georgia vs Texas.
Tax structure
Texas has no state income tax, while Georgia uses progressive brackets up to 5.4%.
Effective rate at your income
At $100,000, Texas's effective state rate is 0.0% vs 4.4% in Georgia — a 4.4 percentage point gap.
Tip: While you save on income tax, Texas property taxes can exceed $5,000-$10,000/year on a median-priced home. Factor in property tax when comparing total tax burden against income-tax states where property taxes may be lower.
Tip: Georgia's transition to a flat rate simplifies tax planning. The state's generous standard deduction ($12,000 single) reduces the effective rate, especially for lower-income earners. Combined with below-average cost of living, Georgia offers a balanced tax environment.
Understanding Each State
Texas
Texas has no state income tax, relying instead on property taxes (among the highest in the US at ~1.6-1.8% of home value) and an 8.25% combined sales tax in most areas. For wage earners, the absence of income tax is a major advantage, but property owners face a significant ongoing cost.
Tip: While you save on income tax, Texas property taxes can exceed $5,000-$10,000/year on a median-priced home. Factor in property tax when comparing total tax burden against income-tax states where property taxes may be lower.
Georgia
Georgia switched to a flat income tax rate of 5.39% in 2025 (previously progressive brackets up to 5.75%). Georgia's overall cost of living is below the national average, and the state offers a standard deduction of $12,000 for single filers and $18,000 for married filing jointly.
Tip: Georgia's transition to a flat rate simplifies tax planning. The state's generous standard deduction ($12,000 single) reduces the effective rate, especially for lower-income earners. Combined with below-average cost of living, Georgia offers a balanced tax environment.
Key Comparison Points
Income tax structure: Texas has no state income tax, while Georgia has a progressive income tax (1% – 5.39%).
Beyond income tax: State tax comparisons should also consider property tax rates, sales tax, and cost of living. A state with no income tax may have higher property or sales taxes that offset the savings.
SALT deduction cap: Under OBBBA (2025+), the federal SALT cap is $40,000, phasing out above $500,000 MAGI toward a $10,000 floor. This limits the federal tax benefit of living in a high-tax state, so the gross state tax difference remains close to the net difference for most earners — especially high earners inside the phaseout.
Frequently asked questions
Is it cheaper to live in Texas or Georgia?
Based on income tax alone, Texas has a lower tax burden. At $100K income, you'd save $4,394 annually in Texas compared to Georgia. However, total cost of living also depends on property taxes, sales taxes, and housing costs.
How much would I save moving from Georgia to Texas?
A single filer earning $100,000 would save approximately $4,394 per year in total taxes by living in Texas instead of Georgia. At $150,000 income, the savings change to $7,089 per year.
What is the income tax rate in Texas?
Texas has no state income tax.
What is the income tax rate in Georgia?
Georgia has a progressive income tax with rates of 1% – 5.39%.
Does Texas have income tax?
No, Texas does not levy a state income tax. Residents pay only federal income tax and FICA. However, Texas may have higher property taxes or sales taxes to compensate.