May 27, 2021
May 27, 2021
As more and more state legislatures wrap up their sessions and we reflect on the whirlwind that is this past year, it’s easy to focus on the steps back that states like Oklahoma have taken and Nebraska, North Carolina, and Arizona are trying to take. We have had some significant wins in states over the course of the year, but not every development will be a good one. However, we know advocates are on the ground, working tirelessly to help states maintain equity and progressivity in their tax codes. And for that, we have many of you—our intrepid readers of the Rundown—to thank. So, thank you, we can’t wait to continue to press on together.
Major State Tax Proposals and Developments
Late last week, lawmakers in NEBRASKA approved a $26 million corporate tax cut for corporations and their shareholders that will lower the state’s corporate income tax rate from 7.81 percent to 6.84 percent by 2025.
—DYLAN GRUNDMAN O’NEILL
Lawmakers in NORTH CAROLINA released a bill that would cut individual income taxes and the state’s franchise tax and, over time, fully eliminate the state’s corporate income tax—resulting in a more than $2 billion dollar tax cut and resource reduction.
OKLAHOMA Gov. Kevin Stitt signed a state budget agreement into law, which includes a corporate income tax reduction from 6 percent to 4 percent, cuts to individual income tax rates by 0.25 percentage points, and makes the state EITC refundable for tax year 2020.
- ALASKA lawmakers wrapped up their regular session without reaching agreement on the state’s final budget or PFD amount. Those issues will be addressed in a 30-day special session.
- With two weeks of legislative session remaining, CONNECTICUT lawmakers weigh the need for long-term investments versus a short-term surplus. Meanwhile, the Senate approved a long-in-the-works bill for online gambling and sports betting.
- A COLORADO bill that will gradually raise property taxes without voter approval for education funding will go into effect after the State Supreme Court ruled that it doesn’t violate the Taxpayer Bill of Rights.
- The LOUISIANA House passed the tax swap proposal to eliminate the federal income tax deduction in exchange for lowering personal income tax rates after the bill initially stalled. Although the tax swap is estimated to be revenue-neutral, a new provision stipulates that the rates would drop even lower if the state’s tax collections hit a certain level of growth. In other news, the House voted to allow the state economic development agency to hide corporate tax incentive records from the public, and the legislature extended the costly film tax credit for three more years.
- The NEW HAMPSHIRE Senate voted to expand the use of ‘community revitalization’ tax breaks for affordable housing development.
- The VERMONT legislature adjourned for the session after passing a $7.3 billion dollar budget. Lawmakers expect to return in mid-June for a veto session, and they will continue their work with summer study committees.
- The WYOMING Legislature’s Joint Transportation, Highways and Military Affairs Committee is again examining a bill that would increase the state’s fuel tax from 24 cents to 33 cents for gasoline and diesel.
What We’re Reading
- The Arizona Center for Economic Progress put out a great thread on Twitter outlining why the legislature’s focus on implementing a flat tax is misguided.
- An op-ed in the Clarion Ledger argues that Mississippi needs more revenue to make meaningful quality-of-life investments and entice young Mississippians to remain in the state.
The Rundown will pick back up after the week of Memorial Day.
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