Short-Term Rental Taxes in Georgia: What Investors Need to Know in 2025
Georgia does NOT conform to federal bonus depreciation. You must add back federal bonus dep on your GA return and use 150% DB depreciation instead. This is one of the most important state tax issues for Georgia STR investors — plan accordingly with a Georgia CPA.
Georgia is home to some of the Southeast's most popular STR markets — Blue Ridge and Fannin County mountain cabins, Savannah's historic districts, Tybee Island beaches, and Helen's Bavarian village. The state has a 5.75% flat income tax and a unique, often-overlooked issue: Georgia does not conform to federal bonus depreciation. Investors who take large first-year deductions on their federal return must make a significant Georgia-specific adjustment.
Georgia State Income Tax on Rental Income
Georgia taxes individuals at a 5.75% flat rate on net income, including net rental income reported on Schedule E. Under HB 1437, this rate was set to phase down to 5.39% by 2024, subject to revenue triggers — verify the current rate with a Georgia tax professional. Regardless of the exact rate, Georgia's income tax represents a meaningful additional burden on top of federal taxes. For a $300,000 net rental income, the Georgia tax alone approaches $17,250.
The Critical Issue: Georgia Bonus Depreciation Non-Conformity
Georgia is one of a handful of states that decouples from federal bonus depreciation. Here is how it works: when you take federal bonus depreciation (say, $150,000 on 5-year assets in year one), you must add that entire amount back to your Georgia income. You then replace it with 150% declining balance depreciation calculated over the asset's normal MACRS life.
For a $150,000 federal bonus depreciation deduction, the Georgia replacement deduction in year one might be roughly $30,000–$50,000 — meaning you are paying Georgia income tax on an extra $100,000+ of income in year one. At 5.75%, that is an additional $5,750–$7,500 in Georgia taxes. You will recover those deductions over subsequent years as the 150% DB depreciation runs its course, but the timing mismatch is a real cash flow consideration.
Work with a CPA who understands both federal STR strategy and Georgia's addback rules. The federal benefit of cost segregation is still very real — the Georgia impact is a reduction of state timing benefit, not elimination of federal deductions. Most Georgia STR investors find the federal savings still significantly exceed the Georgia timing penalty.
Georgia Lodging and Sales Taxes by Market
| Market / County | State Sales Tax | County Lodging Tax | Estimated Total |
|---|---|---|---|
| Fannin County (Blue Ridge) | 4% | 8% | ~12% |
| Chatham County (Savannah) | 4% | 6% | ~10% |
| Chatham County (Tybee Island) | 4% | 6% | ~10% |
| White County (Helen) | 4% | 5% | ~9% |
| Hall County (Lake Lanier area) | 4% | 5% | ~9% |
| Rabun County (Clayton / Tallulah area) | 4% | 5% | ~9% |
Top Georgia STR Markets
Blue Ridge / Fannin County: Georgia's premier mountain cabin market. Blue Ridge draws Atlanta-area visitors (roughly 2 hours away) for weekend cabin getaways featuring mountain views, hot tubs, fire pits, and game rooms — amenity profiles similar to Smoky Mountains cabins. The 8% county lodging tax is the highest in Georgia. Strong year-round demand includes fall leaf-peeping and holiday escapes.
Savannah: Georgia's most popular city tourism destination. The STR market is concentrated in the historic district and Victorian homes. Average stays of 2–4 nights are well within STR loophole territory. The historic character of properties means renovation costs and building components can carry distinct values for cost segregation purposes.
Tybee Island: Georgia's primary beach STR market, located 18 miles east of Savannah. A seasonal market with very strong summer occupancy and meaningful shoulder season demand. Properties range from cottages to larger beach houses.
Helen: A quirky Bavarian-themed alpine village in the Blue Ridge Mountains. Helen draws visitors for Oktoberfest, tubing on the Chattahoochee River, and mountain scenery. Lower property prices than Blue Ridge proper with year-round appeal.
Cost Segregation in Georgia: Still Powerful Despite Decoupling
Despite the Georgia bonus depreciation decoupling, cost segregation remains highly valuable for Georgia STR investors. The federal deductions are unchanged — 100% bonus depreciation on 5-year and 15-year assets under the OBBBA applies fully on your federal return. For a $500,000 Blue Ridge cabin with $160,000 in cost seg deductions at a 37% federal bracket, the federal savings are approximately $59,200 — largely unaffected by the Georgia state timing issue.
The Georgia impact is a temporary timing difference, not a permanent loss of deductions. Over the full depreciation period, Georgia investors recover the same total deductions — just more slowly. The net present value cost of the timing difference is typically $3,000–$8,000 for a typical Georgia STR property, small relative to the $40,000–$80,000+ federal benefit.
Get Your Georgia STR Cost Segregation Estimate
Even with Georgia's bonus depreciation decoupling, federal cost seg savings are substantial. Get your free estimate to see your year-one federal and state net benefit.
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