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Carl Davis
Research DirectorWhile President Trump was busy publicly shaming Amazon for failing to collect some state and local sales taxes, his own business’s online store was not only failing to collect the same taxes, but was arguably more aggressive than Amazon in refusing to do so. As of last month, TrumpStore.com was not even collecting sales tax in New York State despite having a “flagship retail store” inside Trump Tower, in Manhattan. As ITEP pointed out at that time: “It seems likely that the presence of a New York location should be enough to put TrumpStore.com within reach of New York’s sales tax collection laws.” -
This week, Arizona teachers continued to strike over pay issues and advocates unveiled a progressive revenue solution they hope to put before voters, while a progressive income tax also gained support as part of a resolution to Illinois's budget troubles. Iowa and Missouri legislators continued to try to push through unsustainable tax cuts before their sessions end. And Minnesota and South Carolina focused on responding to the federal tax-cut bill.
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Aidan Davis
State Policy DirectorToday marks Day 4 of the Arizona teachers’ walkout. After decades of tax cuts and underfunding of public education, education advocates are now driving the debate and urging lawmakers to act. Their newest proposal would raise taxes on incomes above half a million dollars for married couples, or above $250,000 for single taxpayers—that is, the same wealthy taxpayers that just received a generous tax cuts under last year’s federal tax overhaul. -
One of the most repeated myths in state tax policy is called “millionaire tax flight,” where millionaires are allegedly fleeing states with high income tax rates for states with lower rates. This myth has been used as an argument in state tax debates for years but Cristobal Young argues in his book, “The Myth of the Millionaire Tax Flight,” that both Democrats and Republicans are “searching for a crisis that does not really exist,” and that there is no evidence to support this myth.
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This Arbor Day week, the seeds of discontent with underfunded school systems and underpaid teachers continued to spread, with walkouts occurring in both Arizona and Colorado. And recognizing the need to see the forest as well as the trees, the Arizona teachers have presented revenue solutions to get to the true root of the problem. In the plains states, tax cut proposals continue to pop up like weeds in Kansas and threaten to spread to Iowa and Missouri, where lawmakers are running out of time but are still hoping their efforts to pass destructive tax cuts will bear fruit.
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This week the IRS website asked some would-be tax filers to return after December 31, 9999. State legislators don't have quite that much time, but are struggling to wrap up their tax debates on schedule as well. Iowa legislators, for example, are ironically still debating tax cuts despite having run out of money to cover their daily expenses for the year. Nebraska's session wrapped up, but its tax debate continues in the form of a call for a special session and the threat of an unfunded tax cut going before voters in November. Mississippi's tax debate has been revived by emergency bridge closings. Kentucky's session went down to the wire as lawmakers overrode vetoes to push through a tax increase to help fund teacher salaries that raises taxes on most taxpayers while cutting them for the richest 5 percent tax. And lawmakers in Arizona and Colorado may need to stay after school to resolve teacher pay issues.
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Misha Hill
Policy AnalystWe're highlighting the progress of a few newer trends in consumption taxation. This includes using the tax code to discourage consumption of everything from plastic bags to carbon and collecting revenue from emerging industries like ride sharing services and legalized cannabis sales. -
This Friday the 13th is a spooky one for many state lawmakers, as past bad fiscal decisions have been coming back to haunt them in the form of teacher strikes and walk-outs in Arizona, Kentucky, and Oklahoma. Meanwhile, policymakers in Maryland, Nebraska, New Jersey, Oregon, and Utah all attempted to exorcise negative consequences of the federal tax-cut bill from their tax codes. And our What We're Reading section includes yet another stake to the heart of the millionaire tax-flight myth and other good reads.
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Carl Davis
Research DirectorApril 11, 2018
ITEP Resources on Amazon and the Online Sales Tax Debate
The U.S. Supreme Court is scheduled to consider a case next week (South Dakota v. Wayfair, Inc.) that has the potential to significantly improve states and localities’ ability to enforce their sales tax laws on Internet purchases. -
Carl Davis
Research DirectorOnline shopping is hardly a new phenomenon. And yet states and localities still lack the authority to require many Internet retailers to collect the sales taxes that their locally based, brick and mortar competitors have been collecting for decades. -
This week, Kentucky legislators passed a bill shifting taxes onto low- and middle-income families, Oklahoma legislators reached a deal on education funding, and their counterparts in Kansas proffered multiple proposals for their education funding needs. Meanwhile, tax debates are coming down to the wire in Iowa, Missouri, and Nebraska, and responses to the federal tax-cut bill were settled on in Maryland, New York, and Wisconsin.
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Lisa Christensen Gee
Director of Special InitiativesWhile a lot of tax activities in the states this year have focused on figuring out the impact of federal tax changes on states' bottom lines and residents, there also have been unrelated efforts to cut state taxes or shift from personal income taxes to more regressive sales taxes. -
Meg Wiehe
Deputy Executive DirectorAs other researchers as well as journalists have noted, teachers striking or threatening to strike over low wages and overall lack of investment isn’t simply a narrative about schools and public workers’ pay. It is illustrative of a broader conflict over tax laws and how states and local jurisdictions fund critical public services that range from K-12 education, public safety, roads and bridges, health care, parks, to higher education. -
ITEP Staff
March 30, 2018
Amazon’s Local, State and Federal Tax Issues Explained
President Trump’s latest Twitter target, the Amazon Corporation, is now under the microscope for its state and local tax avoidance. In a Thursday tweet, the President claimed that “[u]nlike others, they pay little or no taxes to state & local governments.” Such a statement is a startling reversal for a president who previously said his own ability to avoid paying income taxes “makes me smart.” -
This week, after the recent teacher strike in West Virginia, teacher pay crises brought on by years of irresponsible tax cuts also made headlines in Arizona and Oklahoma. Maine and New York lawmakers continue to hash out how they will respond to the federal tax bill. And their counterparts in Missouri and Nebraska attempt to push forward their tax cutting agendas.
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Aidan Davis
State Policy DirectorThis has been a big year for state action on tax credits that support low-and moderate-income workers and families. And this makes sense given the bad hand low- and middle-income families were dealt under the recent Trump-GOP tax law, which provides most of its benefits to high-income households and wealthy investors. Many proposed changes are part of states’ broader reaction to the impact of the new federal law on state tax systems. Unfortunately, some of those proposals left much to be desired. -
Carl Davis
Research DirectorA new ITEP analysis reveals that in seven states (Alabama, Alaska, Idaho, Iowa, Mississippi, New Mexico, and Pennsylvania), the nation’s largest e-retailer, Amazon.com, is either not collecting local-level sales taxes or is charging a lower tax rate than local retailers. In other states, such as Colorado and Illinois, Amazon is collecting local tax because it has an in-state presence, but localities cannot collect taxes from other e-retailers based outside the state. -
The onset of spring this week proved to be fertile ground for state fiscal policy debates. A teacher strike came to an end in West Virginia as another seems ready to begin in Oklahoma. Budgets were finalized in Florida, West Virginia, and Wyoming, are set to awaken from hibernation in Missouri and Virginia, and are being hotly debated in several other states. Meanwhile Idaho, Iowa, Maryland, and Minnesota continued to grapple with implications of the federal tax-cut bill. And our What We're Reading section includes coverage of how states are attempting to further public priorities by taxing carbon, online gambling, opioids, and inequality itself.
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March 14, 2018
State Rundown 3/14: States Turn Fiscal Focus Inward
With many state legislative sessions about halfway through, the ripple effects of the federal tax-cut bill took a back seat this week as states focused their energies on their own tax and budget issues. Major proposals were released in Nebraska and New Jersey, one advanced in Missouri, and debates wrapped up in Florida, Utah, and Washington. Oklahoma and Vermont are considering ways to improve education funding, while California, New York, and Vermont look to require more of their most fortunate residents. And check in on "what we're reading" for resources on the online sales tax debate, the role of property taxes in racial inequity, and more. -
Aidan Davis
State Policy DirectorMany states struggle with a need for revenue, yet their lawmakers show little will to raise taxes to fund public services. Revenue shortfalls can prove to be a moving target. Some states with expected shortfalls are now seeing rosier forecasts. But as estimates come in above or below projections, states continue to grapple with how and whether to raise the revenue necessary to adequately fund key programs. Here are a few trends that are leading to less than cushy state coffers this year. -
March 8, 2018
State Rundown 3/8: March Tax Debates “In Like a Lion”
This week was very active for state tax debates. Georgia, Idaho, and Oregon passed bills reacting to the federal tax cut, as Maryland and other states made headway on their own responses. Florida lawmakers sent a harmful "supermajority" constitutional amendment to voters. New Jersey now has two progressive revenue raising proposals on the table (and a need for both). Louisiana ended one special session with talks of yet another. And online sales taxes continued to make news nationally and in Kansas, Nebraska, and Pennsylvania. -
Dylan Grundman O'Neill
Senior AnalystOver the next few weeks we will be blogging about what we’re watching in state tax policy during 2018 legislative sessions. And there is no trend more pervasive in states this year than the need to sort through and react to the state-level impact of federal tax changes enacted late last year. -
February 28, 2018
State Rundown 2/28: February a Long Month for State Tax Debates
February may be the shortest month but it has been a long one for state lawmakers. This week saw Arizona, Idaho, Oregon, and Utah seemingly approaching final decisions on how to respond to the federal tax-cut bill, while a bill that appeared cleared for take-off in Georgia hit some unexpected turbulence. Other states are still studying what the federal bill means for them, and many more continue to debate tax and budget proposals independently of the federal changes. And be sure to check our "What We're Reading" section for news on corporate tax credits from multiple states. -
February 23, 2018
Why the Minute Federal 529 Provision Has Huge Consequences for States
When Republican leaders rushed through an overhaul to the federal tax code over a seven-week legislative period, they failed to acknowledge that many provisions in their bill would have negative consequences for states. One such provision of the Tax Cuts and Jobs Act that undermines state laws is the expansion of federal tax breaks that now allows taxpayers to use 529 savings plans to pay for private K-12 education. -
February 22, 2018
State Rundown 2/22: State Tax Debates Grind On
This week, major tax packages relating to the federal tax-cut bill made news in Georgia, Iowa, and Louisiana, as Minnesota and Oregon lawmakers also continue to work out how their states will be affected. New Mexico's legislative session has finished without significant tax changes, while Idaho and Illinois's sessions are beginning to heat up, and Vermont's school funding system is under the microscope.
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