December 15, 2021
December 15, 2021
As the holiday season kicks into full gear, we’re putting the finishing touches on our State Tax Naughty or Nice list, and it looks like some late entrants are making a good case to be included. First, the naughty: Two Georgia and Idaho gubernatorial hopefuls and several Iowa senators have landed on the list for their plans for try and eliminate their state income tax. Meanwhile, we wouldn’t be surprised if the governor of Arkansas received a visit from The Ghost of Economies Past to show him what budgetary chaos his signing of a massive individual and corporate income tax cut into law will do to the state. On the other hand, Wyoming legislators may just land on the ‘Nice’ list for finding the courage to increase the fuel tax to fill a nagging shortfall in transportation funding, and the Utah governor’s proposal to use excess revenues for a food tax rebate could bring joy and good tidings to those who need it most.
Major State Tax Proposals and Developments
- ARKANSAS Gov. Asa Hutchinson has approved a $500 million individual and corporate income tax cut that primarily benefits the state’s wealthiest citizens. — NEVA BUTKUS
- Former GEORGIA senator and gubernatorial hopeful David Perdue has proposed completely eliminating the income tax as part of his campaign platform, despite the fact that it’s the main source of funding for the state’s public education system and state health care programs. Senate President Pro Tempore Butch Miller, who is running for lieutenant governor, pre-filed income tax elimination legislation last month. – KAMOLIKA DAS
- UTAH lawmakers are jockeying to put excess budget revenues toward a range of tax cut options: Democrats are pushing for ending the 1.75 percent state sales tax on groceries, which has a price tag of $140 million, whereas Republicans are leaning towards a cut to the state’s flat, 4.95 percent personal income tax rate. Gov. Spencer Cox’s plan, however, would create a $160 million food tax rebate. — MARCO GUZMAN
- FLORIDA Gov. Ron DeSantis’s proposed budget includes reducing the state gas tax and creating additional tax holidays throughout the year.
- An IDAHO Republican running for governor announced that eliminating the state income tax was an important goal, and suggested that the state spend down their $6 billion balance first and then rely on sales and use taxes to make up for lost revenue.
- INDIANA lawmakers are pushing to reduce personal property taxes that businesses pay on equipment by $300 million.
- Senate Republicans in IOWA are calling upon colleagues to eliminate income taxes in 2022.
- According to ProPublica, wealthy LOUISIANA oil magnate Phyllis Taylor avoided paying income tax from 2005-2018 by writing off expenses used to clean up an oil spill caused by Hurricane Ivan that continues to leak to this day.
- MARYLAND‘s tax on digital advertising is scheduled to take effect in January, although two lawsuits against the tax are still pending. Depending on the litigation outcome, other states may follow Maryland’s lead.
- A proposed bill in NEW HAMPSHIRE would allow the state to set up retail cannabis stores and dedicate profits to substance misuse prevention programs and reducing the Statewide Education Property Tax.
- Some NEW YORK lawmakers are proposing tax credits to bolster local newspapers and journalism, including credits for hiring journalists and for subscribing to newspapers.
- VIRGINIA Gov. Ralph Northam proposed several tax cuts including eliminating the state grocery tax, providing one-time rebates, and making the state earned income tax credit (EITC) refundable at 15 percent of the federal credit.
- WASHINGTON State lawmakers and Gov. Jay Inslee may still call a special session before the end of the year to delay implementation of the state’s first-of-its-kind long-term care program and accompanying payroll tax until 2023.
- A WYOMING bill that would increase the state’s fuel tax by 15 cents by 2024 (from 24 cents to 39 cents) advanced through committee. The state currently faces a transportation shortfall of $354 million.
What We’re Reading
- Delaware State Rep. John Kowalko and American Economic Liberties Project Director Pat Garofalo argue that Delaware, and the rest of the country, should stop doling out subsidies to Amazon.
- ProPublica traced how three wealthy families preserved their dynastic wealth via tax avoidance over generations.
- Advocates in Connecticut released a report calling for rebalancing the state’s fiscal priorities to reduce reliance on local property taxes and address horizontal and vertical inequities within the property tax and local funding system.
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