State Rundown 10/13: Soda Taxes, Business Subsidies, and Gas Taxes Considered in Several States

A comprehensive tax study is underway in Arkansas this week as other states hone in on more specific issues. Soda taxes hit setbacks in Illinois and Michigan, business tax subsidies faced scrutiny in Iowa and Missouri, and gas tax update efforts are underway in Mississippi and North Dakota.

— Meg Wiehe, ITEP Deputy Director, @megwiehe

• Arkansas’ legislative tax overhaul committee is getting started with their work—revealing a range of priorities. Income and sales tax rate cuts and sales tax base expansion are among the ideas expected to be discussed.
• The Chicago, Illinois soda tax will be short-lived following the Cook County Commissioner’s vote to repeal the tax on Wednesday. Commissioners have until the end of November to finalize the budget that will now require $200 million in cuts to balance.
• Lawmakers in Michigan passed legislation to preempt the enactment of soda and other taxes on sugary or artificially labeled items by municipalities.
• An effort to repeal recent transportation tax increases in California may not have the public support previously suspected, given the results of a new poll.
• Talk of a special session to address the state’s shortfall is afloat in Montana, and lawmakers have mixed opinions regarding desirability and effectiveness.
• Oregon made its first distribution of marijuana revenues on Wednesday since legalizing recreational sales in 2016. Cities and counties not imposing their own taxes won’t receive a cut.
• Controversy over business tax subsidies in Iowa continues, as some decry their high costs and uncertain returns while others insist they are necessary to compete for projects.
• Business tax breaks are also under scrutiny in Missouri, where an auditor is calling for better tracking of their impacts.
• Pennsylvania voters will decide in November whether or not to allow the state’s property tax homestead exemption to be expanded in the future, which if passed may spur further debate over how schools are funded.
• North Dakota county officials may get behind a state gas tax increase to improve the condition of the state’s roads and bridges.
• Mississippi residents may have a chance to vote on the needed gas tax update the legislature has so far failed to pass, if one lawmaker is able to get the measure onto the ballot.

What We’re Reading…

• The International Monetary Fund is advising countries to raise taxes on the wealthy to address steadily increasing inequality.
• Governing covers widespread opposition to proposed elimination of the federal deduction for state and local taxes, and recent efforts to pass tax changes while keeping the deduction.
• Governing also reports that local income taxes are more popular than ever and may be spreading further in the coming years.
• Route Fifty has the latest on wildfires causing budget problems in multiple states.
• Lessons from the laboratories of democracy: Kansans continue to warn federal lawmakers of the dangers of pursuing a tax reform agenda that looks a lot like Kansas’ failed tax experiment, the Atlantic and New York Times

If you like what you are seeing in the Rundown (or even if you don’t) please send any feedback or tips for future posts to Meg Wiehe at [email protected]. Click here to sign up to receive the Rundown via email.

---

---