According to WebCPA, the Census Bureau has reported that tax revenue for state and local governments declined 6.7% in the 3rd quarter of 2009. This is the 4th consecutive quarter of negative growth in tax revenues. Property taxes, however, increased 3.5%.

Analysis of the underlying numbers indicates that in Georgia, total taxes decreased 12.2% and sales taxes declined 6.8% from the 2nd quarter. Look for the Georgia Department of Revenue to respond to this pressure and become even more aggressive. In 2009, practitioners saw a marked increase in correspondence audits where taxpayers received a letter requesting they document their deductions. The ones I saw were audits of itemized deductions.

The Georgia budget will be the primary subject when the legislature returns in January.