June 29, 2022
June 29, 2022
Although the sun is shining and Independence Day is right around the corner, many state lawmakers are still indoors hammering out the details of future budgets or still hard at work passing laws. Hawaii legislators took a major step in the direction of increased tax fairness after the governor signed into law a bill that makes the state Earned Income Tax Credit both permanent and refundable. Meanwhile, on the mainland, the governor of Arizona approved the 2023 budget, which sneakily eliminated a personal property tax that provided significant funding for K-12 education. Though the revenue will be backfilled with revenue from the general fund, it’ll be interesting to watch how the loss of revenue will affect the state going forward. And as states work to help families deal with the rising costs of goods, rebates continue to be a popular option (see: California below), except in Missouri, where the governor is expected to veto a rebate plan that would have provided households up to $1,000.
Major State Tax Proposals and Developments
- In HAWAII, Governor David Ige signed a bill that would make the earned income tax credit (EITC) refundable and permanent. He also signed a bill that would provide people who make less than $100,000 ($200,000 for a couple) with a $300 tax rebate, while those above that income will receive $100. – BRAKEYSHIA SAMMS
- ARIZONA Gov. Doug Ducey signed the fiscal year 2023 budget into law, which included the elimination of the $330.5 million state tax applied to personal property. The tax, which previously funded K-12 education, will be backfilled with revenue from the general fund. – MARCO GUZMAN
- CALIFORNIA lawmakers and Gov. Gavin Newsom still have many budget details to finalize, including proposals to reduce cannabis taxes, but have reached agreement on a $17 billion inflation relief package. The centerpiece of the plan is a rebate payment with a maximum of $1,050 for lower-income families with children, lower amounts for adults without children and middle- to upper-income households, and an overall cutoff at $250,000 for single filers and $500,000 for couples. The deal also includes $1.4 billion to assist with past-due utility bills from the Covid-19 pandemic and a suspension of the state diesel tax. – DYLAN GRUNDMAN O’NEILL
- Five sales tax holidays start in FLORIDA this Friday on recreational and outdoor supplies, children’s clothing and diapers, Energy Star appliances, and impact-resistant house supplies for hurricane season. These five sales tax holidays alone will cost the state over $700 million.
- The MICHIGAN legislature is turning its focus to the budget before its July 1 deadline but is expected to continue discussions on a tax cut plan later this year.
- MISSOURI Gov. Mike Parson is expected to veto the legislature’s rebate bill that would have provided checks of $500 to single filers and $1,000 to joint filers with incomes up to $150,000 and $300,000, respectively.
- NEW HAMPSHIRE residential and commercial property owners filed a lawsuit this week stating that for the past twenty-five years, legislators have failed to comply with the state Supreme Court ruling that the state’s method of funding education was unconstitutional.
- NEW JERSEY lawmakers are advancing a state Child Tax Credit program that would give a refundable tax credit of up to $500 per year for each child under the age of six in low-income families.
- Part of NEW YORK’s budget deal was a $2.2 billion property tax credit called the Homeowner Tax Rebate Credit, which was planned for the fall but will be sent out early, arriving in residents’ mailboxes as soon as next week.
- A new PENNSYLVANIA bill would suspend the state’s gas tax for June and July. The bill proposes using $150 million in COVID-19 relief money to fund the gap. Some MARYLAND legislators have also made calls to bring back the state’s gas tax holiday.
- Gov. Henry McMaster of SOUTH CAROLINA has signed the legislature’s tax cut plan, which collapses the state’s personal income tax brackets from six to three and lowers the top rate from 7 to 6.5 percent immediately. The rate will drop by 0.1 percentage points each year until it reaches 6 percent. The plan also includes nonrefundable rebate checks of up to $800.
- In TEXAS, 20 state representatives wrote a letter to Governor Greg Abbott urging him to call a special session so they could suspend the 20-cent gas tax.
- A group of 17 WYOMING Republicans have asked Gov. Mark Gordon to call a special session to reduce property tax levels and pass a fuel tax holiday.
What We’re Reading
- In an op-ed in the Pennsylvania Capital-Star, Nick Pressley and Marc Stier argue that there is broad, bipartisan consensus that Pennsylvania should raise the minimum wage and that legislators should not institute corporate tax cuts without closing loopholes for multinational corporations.
- Bloomberg published an enlightening piece detailing how Black families have, over time, lost out on a significant amount of intergenerational wealth due to property sold or lost at tax lien sales.
- ProPublica’s series on billionaires’ taxes (and lack thereof) continues with a recent short post summarizing ten tax avoidance techniques popular among the billionaire class.
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