Since 2021, 25 states have cut individual income tax rates (including 23 reductions to top marginal rates), 13 states have cut corporate income tax rates, two have cut sales tax rates, and many more have made structural improvements like repealing capital stock taxes, adopting permanent full expensing, raising nonresident filing and withholding thresholds, improving treatment of business tangible property, eliminating throwback and throwout rules, and more.
The pace of tax reform will ebb and flow, and lawmakers’ ability to implement rate reductions will depend on future revenue and expenditure levels, but there will always be room for structural reforms. In an era characterized by remote work and greater workplace flexibility, more states should prioritize policies that attract investment, like permanent full expensing, and which reduce burdens for nonresidents, like higher filing and withholding thresholds.
At least 32 notable tax policy changes recently took effect across 18 states, including alterations to income taxes, payroll taxes, sales and use taxes, property taxes, and excise taxes. See if your state tax code changed.
15 min read
As fiscal year 2023 draws to a close, North Carolina’s House and Senate have each passed their own versions of the biennial budget for fiscal years 2024-25. While legislative leaders have generally agreed to overall spending levels, negotiations remain ongoing to resolve different approaches to tax policy.
7 min read
The Pennsylvania Senate Finance Committee recently advanced two bills, SB 345 and SB 346, that would build on last year’s historic corporate net income tax (CNIT) reform.
7 min read
As Minnesota lawmakers consider making theirs the first state to mandate worldwide combined reporting, they are relying on a revenue estimate that is—this may not be the technical term—completely bogus.
7 min read
Individual income taxes are a major source of state government revenue, accounting for more than a third of state tax collections:
22 min read
Individual income taxes are a major source of state government revenue, accounting for more than a third of state tax collections:
22 min read
Done responsibly, reducing income tax rates while consolidating brackets would return excess tax collections to taxpayers and promote long-term economic growth in Nebraska.
3 min read
Forty-three states adopted tax relief in 2021 or 2022—often in both years—and of those, 21 cut state income tax rates. It’s been a remarkable trend, driven by robust state revenues and an increasingly competitive tax environment.
4 min read
West Virginia is one of only seven states that hasn’t offered any significant tax relief since 2021—and five of the other six forgo an individual income tax.
6 min read
By shifting to a flat income tax, Georgia has already made an important commitment to tax competitiveness. Although the state’s top rate threshold is already very low, a true single-rate income tax will help protect taxpayers from inflation-related tax increases and provide a buffer against rising tax rates in the future. To combine responsible rate reductions with these benefits, Georgia should create tax triggers that empower the state to keep pace with its competition.
3 min read
Most of the 2023 state tax changes represent net tax reductions, the result of an unprecedented wave of rate reductions and other tax cuts in the past two years as states respond to burgeoning revenues, greater tax competition in an era of enhanced mobility, and the impact of high inflation on residents.
20 min read
Remote and flexible work opportunities are here to stay, whether states like it or not. With enhanced opportunities to take their job with them wherever they please, more workers can factor tax burdens into their decision of where to live.
15 min read
In what is already a year of significant bipartisan focus on tax relief, 2022 is launching something of a flat tax revolution by reforming income taxes.
8 min read
With increases to the standard deduction, a flat tax could provide a net tax cut to taxpayers of all income levels, providing both short-term and long-term relief to taxpayers across the income spectrum. It would also simplify the tax code in ways that encourage greater investment and economic growth, particularly by ensuring that the marginal rate on small business investment is competitive with peer states.
4 min read
Maine has blueberry taxes. Alabama has mosquito taxes. Each state and county has its tax quirks. But when state and local governments want to raise revenues, there are four key taxes they turn to.
As Idaho attempts to further solidify its position as a growth-oriented, taxpayer-friendly state this special session, other states should look to its example and pursue similar reforms.
6 min read
As Missouri legislators head into a special session, they should consider making a pro-growth change that the state is already so close to achieving: creating a flat income tax.
4 min read
The Kansas experience is so infamous that “what about Kansas?” is almost guaranteed to be a question—sometimes as a retort, but often a genuine expression of concern—any time any state explores tax relief. But what about the other two dozen states that have cut their income taxes since then?
6 min read
After a whirlwind of cuts and reforms in 2021, it looks like 2022 might be an even bigger year for state tax codes. Republican and Democratic governors alike used their annual State of the State addresses to call for tax reform, and there is already serious momentum from state lawmakers nationwide to get the job done.
3 min read
After a whirlwind of cuts and reforms in 2021, it looks like 2022 might be an even bigger year for state tax codes. Republican and Democratic governors alike used their annual State of the State addresses to call for tax reform, and there is already serious momentum from state lawmakers nationwide to get the job done. We discuss why states are looking to make so many tax changes now and how these proposals might play out in statehouses.
On this episode of The Deduction, host Jesse Solis and Senior Policy Analyst Katherine Loughead explore how stronger-than-expected revenues and increased workplace flexibility have led to a wave of reforms aimed at enhancing tax competitiveness in states around the country.
As states close their books for fiscal year 2021, many have much more revenue on hand than they anticipated last year. Eleven states have responded by reducing income tax rates and making related structural reforms as they strive to solidify a competitive advantage in an increasingly competitive national landscape.
29 min read
The legalization and taxation of recreational marijuana remains one of the hottest trends in state taxation. New York recently became one of the latest states to legalize it. Join us as we dive into the complex world of marijuana taxation and explain how policymakers should approach designing such taxes.
Marijuana, betting, soda, ride-sharing—over the last decade, the excise tax family has grown significantly and it’s more crucial than ever that lawmakers, businesses, and consumers understand the possibilities and, more importantly, limitations of excise tax application.