It's your money that Georgia spends on every state service and program offered. So you might be curious to know how your money is collected. And how much. For starters, Georgia collected $13.5 billion in taxes in fiscal year 2004 (July/2003 to June/2004).

Next week, I'll compare Georgia's taxes to other states and your county to the rest of the state. I'll also show how Georgia's taxes rank for retirees.

HOW DOES GEORGIA COLLECT ITS REVENUES?

1. Income taxes - 50 percent of all Georgia revenues come from income taxes.

- The state levies 6 percent on every dollar you earn over $7000. {A sliding scale to 1 percent applies to income less than $7000. Retirement income up to $15,000 is excluded and personal exemptions also apply.}

- The tax rate hasn't changed since 1937, except for modifications to exclusions and exemptions.

- 2004 Georgia income tax collections were higher than 2003. The amount collected in each of years 2003 and 2004 was less than collections for years 2000, 2001 and 2002. Keep in mind that the state's population grew each and every year. Georgia had the 4th highest population rate increase last year in the country.

Here's a comparison of other states' income tax to Georgia's:

State Per Capita Revenue Percent of Total Tax Revenue Highest income tax bracket

Alabama $535 35 % 5%

Florida $0 0% 0%

Georgia $738 49% 6%

Mississippi $343 21% 5%

N.Carolina $873 47% 8.25%

2. Sales Tax - 40 percent of all Georgia revenues come from sales taxes.

The state levies 4 percent on everything you purchase, except for a few items including groceries and prescription drugs. Additional local sales taxes of up to 3 percent are collected to pay for local projects such as school construction and roads (Atlanta levies a 4th cent to pay for its sewer problems).

Sales tax revenues fluctuate more than income taxes. The 2003 sales tax revenues were higher than 2002, but lower than 2001. And 2004 sales tax revenues were higher than 2003, but still less than 2001.

The state sales tax was last increased in 1989 from 3 to 4 percent. A substantial exemption for groceries was passed by the state legislature in 1996.

State Per Capita Revenue* Sales tax rate

Alabama $381 4% (7% local) Ala. also taxes groceries.

Florida $898 6% (1.5 local)

Georgia $595 4% (3% local)

Mississippi $814 7% (.25% local) Miss. also taxes groceries.

N. Carolina $422 4.5% (3% local)

*Not including the local sales tax revenues

What category of purchases do Georgians pay the most for in sales taxes? Automobiles. Over 16 percent of all state sales taxes come from automobiles sales. Second is restaurants and non-grocery food at 16 percent.

A sales tax holiday was approved by the legislature in 2002, 2003 and 2004 for two days in the back-to-school timeframe. A limited tax reduction, the exemption applies to clothing, computers and school supplies.

3. The gasoline tax collections account for 4 percent of the state revenues.

- Georgia levies a gasoline tax of 7.5 cents per gallon and collects 3 percent sales tax for transportation (the final penny of the 4 percent state sales tax goes to the general fund). The funds are dedicated to state highways and bridges. Georgia's gas tax is the lowest in the nation. North Carolina's gas tax is more than double Georgia's.

4. The remaining 6 percent of the state's revenues come from corporate income taxes, alcohol and cigarettes (in that order). And a few other odds and ends that represent 1 percent of the state's revenues.

- Of the southeastern states listed earlier, Georgia's cigarette tax is highest at 37 cents per pack. It brings in a little over $100 million per year. The tax was raised by 25 cents per pack (was 17 cents) in 2003.

- Alcohol taxes raise $150 million per year.

- The 6 percent corporate income tax rate ranks in the middle of southeastern states. Corporate taxes and licensing raises $500 million.

The next update will begin to put our state taxes into context. How does our overall tax burden compare to other states? Does your county pay its fair share? Do Georgia's taxes make it a reasonable state to retire in? I think you'll find it interesting.

Best-

Jan Jones

State Representative - District 46

(Serving northwest Fulton, including unincorporated, Roswell and Alpharetta)