Senior citizens across the state of Georgia will soon see a reduction in the amount of state taxes they pay. Gov. Sonny Perdue recently signed HB 1055 which eliminates taxes on retirement income for senior citizens as well as the state portion of homeowner’s property taxes. The state currently collects a ¼ mil for homeowner’s property tax.

Gov. Perdue first proposed eliminating the state portion of homeowners’ property taxes for seniors during his 2008 State of the State address. He championed the senior retirement income tax cut during his successful 2006 re-election campaign.

The income tax cut will benefit more than 300,000 Georgians and make Georgia a more attractive location for retirees, the Governor said. The two tax cuts will provide almost $400 million in tax relief once they are fully implemented.

The bill also includes a 1.45 percent hospital provider payment that will allow the state to draw down additional federal dollars and increase Medicaid reimbursements to hospitals and other providers.

The tax reductions will be phased in over a five year period beginning in 2012.

“Signing this bill ensures a balanced budget and lays the groundwork for economic recovery, said Governor Perdue. “We are creating an environment that encourages seniors to spend their retirement years and dollars in Georgia. We are also finally getting the state completely out of the property tax business and at the same time providing property tax relief for nearly all Georgians.”