On the Map
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January 26, 2021
Child Tax Credit Enhancements Under the American Rescue Plan
President Joe Biden’s coronavirus relief package, the American Rescue Plan, includes a significant expansion of the Child Tax Credit (CTC). The president’s proposal provides a $125 billion boost in funding for the program, which would essentially double the size of the existing federal credit for households with children. Combined with existing law, the CTC provisions in Biden's plan would provide a 37.4 percent income boost to the poorest 20 percent of families with children who make $21,300 or less a year. -
With the victory of Senators-elect Raphael Warnock and Jon Ossoff in Georgia, Democrats now control all three branches of government. New leaders should seize this moment to create a tax code that does much more to reduce inequality and to resource long-overdue investments in climate, health, education and other essentials. Most immediately, the historic election shifts power, making it easier to deliver on the promise to increase the recently enacted $600 cash payments to $2,000 per person. -
December 23, 2020
How Is Recreational Cannabis Taxed in Your State?
Fifteen states have legalized the sale of cannabis for general adult use and sales are already underway in 10 of those states. Every state allowing legal sales applies an excise tax to cannabis based on the product’s weight, its price, or both. ITEP research indicates that taxes based on weight will be more sustainable over time because prices are widely expected to fall as the cannabis industry matures. Most states allowing for legal cannabis sales apply their general sales taxes to the product and local sales taxes also typically apply where such taxes exist. -
December 23, 2020
A Visual History of Sales Tax Collection at Amazon.com
Today, Amazon is collecting state-level sales taxes on all its direct sales but it still usually fails to collect sales tax on the large volume of sales it makes through the Amazon Marketplace. This points to a broader problem in state tax enforcement that lawmakers in many states are moving quickly to address with laws and administrative action requiring tax collection by Amazon and other large online marketplaces such as Etsy and eBay. -
December 21, 2020
National and State-by-State Estimates of New $600 Cash Payments
The House and Senate are about to pass the first COVID-19 relief legislation since the CARES Act was enacted in March. The new relief package includes, among other provisions, cash payments of $600 per person, which is half as large as the payments provided under the CARES Act, but also extends payments to spouses and children of certain undocumented immigrants who were left out of the previous payments. -
Former Vice President Joe Biden’s proposals to change the tax code would raise revenue directly from households with income exceeding $400,000. More precisely, Biden proposes to raise personal income taxes on unmarried individuals and married couples with taxable income exceeding $400,000, and he also proposes to raise payroll taxes on workers with earnings exceeding $400,000. Just 1.9 percent of taxpayers would see a direct tax hike (an increase in either personal income taxes, payroll taxes, or both) if Biden’s tax proposal were in effect in 2022. The share of taxpayers affected in each state would vary from a low of 0.6 percent in West Virginia to a high of 3.7 percent in Connecticut. -
February 26, 2020
How Long Has It Been Since Your State Raised Its Gas Tax?
10 states to have gone two decades or more without a gas tax increase. -
The last few years have brought major improvements in how states enforce their sales tax laws on purchases made over the Internet. Less than a decade ago, e-retailers almost never collected the sales taxes owed by their customers. The result was a multi-billion dollar drain on state coffers and a competitive disadvantage for local businesses. But this holiday season looks a bit different. -
October 16, 2019
What is the Gas Tax Rate Per Gallon in Your State?
Every state levies excise taxes on motor fuel, including gasoline, to pay for transportation infrastructure. People who drive far distances or heavy vehicles tend to pay more tax, which helps offset the wear-and-tear they inflict on the roads. -
September 16, 2019
Cannabis Tax Revenue, Per Capita, April – June 2019
Seven states currently allow for the legal, taxable sale of recreational cannabis. The above map shows per capita revenue collections from excise and sales taxes on cannabis during the second quarter of 2019, the most recent period for which data are available in every state. The most lucrative cannabis market in the country, from a tax revenue perspective, is in Washington State where the 46 percent combined tax rate applied to cannabis is the highest in the country. Collections in California and Massachusetts, by contrast, remain low as these states are still in the early stages of establishing their legal markets. ITEP has issued in-depth analyses of cannabis taxes in general and of California’s market in particular. -
September 6, 2019
How Do State Tax Sales of Over-the-Counter Medication?
While most states levy general sales taxes on items that consumers purchase every day, those taxes often contain carveouts for some necessities such as rent, groceries, and medicine. Prescription drugs, for instance, are currently exempt from state sales tax in 44 of the 45 states levying such taxes (Illinois is the only exception, charging a […] -
August 30, 2019
Where Does Your State Fall on the ITEP Tax Inequality Index?
The vast majority of state and local tax systems exacerbate the economic divide by taxing low- and middle-income families at higher rates than the wealthy. This map distills an exhaustive analysis of state and local tax codes into one key number, the ITEP Tax Inequality Index, to show the degree to which each state’s tax […] -
August 16, 2019
Which States Allow Deductions for Federal Income Taxes Paid?
Six states allow an unusual income tax deduction for federal income taxes paid. These deductions are detrimental to state income tax systems on many fronts, as they offer large benefits to high-income earners and undercut the adequacy and stability of state income tax systems. -
No two state tax systems are the same, but 45 states have one thing in common: Low-income residents are taxed at a higher rate than the top 1 percent. Effective tax rates for the lowest 20 percent of families range from a high of 17.8 percent in Washington State to a low of 5.5 percent in Delaware. -
"Combined reporting" lessens the effectiveness of a tax avoidance scheme known as income shifting, in which large multi-state corporations dubiously claim that their income was earned in states with little or no corporate income tax. -
July 17, 2019
Is Your State Holding Sales Tax Holidays in 2019?
Lawmakers in many states have enacted “sales tax holidays” (16 states will hold them in 2019), to provide a temporary break on paying the tax on purchases of clothing, school supplies, and other items. While these holidays may seem to lessen the regressive impacts of the sales tax, their benefits are minimal. ITEP’s policy brief […] -
July 12, 2019
Does Your State Levy Estate and Inheritance Taxes?
States have been repealing estate taxes since the early 2000s. Now, just 17 states and the District of Columbia (D.C.) levy estate and/or inheritance taxes. Twelve states and D.C. levy estate taxes while six states levy inheritance taxes (Maryland levies both). These taxes have long been used not just to raise revenue for vital public services, but to promote equality of opportunity and reduce the transfer of concentrated wealth from one generation to the next. -
No two state tax systems are the same, but 45 states have one thing in common: Low-income residents are taxed at a higher rate than the top 1 percent. This map shows the effective tax rates for the lowest-income 20 percent in each state--ranging from a high of 17.8 percent in Washington to a low of 5.5 percent in Delaware. -
June 27, 2019
Has Your State Enacted Gas Tax Reform Recently?
Gas taxes are the most important revenue source that states have available to pay for transportation infrastructure. In recent years, state lawmakers across the country have increasingly agreed that gas taxes must be increased to fund the maintenance and improvement of their infrastructure networks. -
Eighteen states provide public support to private and religious K-12 schools through large tax credits for taxpayers who contribute money to K-12 school voucher funds. These credits range from 50 percent to 100 percent of the amount contributed, which far exceeds the tax benefit available for charitable contributions to other organizations such as homeless shelters […] -
May 29, 2019
When Did Your State Enact its EITC?
In 1986, Rhode Island became the first state to enact a tax credit patterned after the federal Earned Income Tax Credit (EITC). Since then, EITCs have become increasingly widespread at the state level with 28 states and the District of Columbia now offering them. These credits are designed to improve family economic security by bolstering […] -
May 22, 2019
How Does Your State Tax Income?
One of the most important decisions that must be made when designing a state personal income tax is whether to charge taxpayers a single flat rate on all their taxable income, or whether to levy a series of graduated rates that ask more of high-income taxpayers -
The upcoming Memorial Day weekend marks the start of the traditional summer driving season. In most states, summer road-trippers are paying more gas tax than they did a few years ago and are benefiting from smoother and safer roads as a result. In total, 30 states have raised or reformed their gas taxes in the last six years. -
Because of these reforms, more than 193 million people (or 59 percent of the U.S. population) now live in places where the state gas tax rate automatically varies over time. -
Twenty-six states and the District of Columbia tax these two fuel types at the same rate or very similar rates, as of April 2019, according to data from the American Petroleum Institute.