State Rundown 7/6: Tax Policy Keeping Governors Busy from Coast to Coast

From coast to coast, state governors have been busy inking their signature on a growing list of consequential budget and tax bills. Out west, Hawaii’s governor approved an increase to the state Earned Income Tax Credit and food excise tax credit, while on the east coast, New Jersey’s governor signed the state budget into law, which includes doubling the Child Tax Credit, providing property tax cuts for seniors, and a corporate income tax overhaul. Not to be left out, governors in the Midwest (Ohio and Wisconsin to be specific) signed budget bills that will cut income taxes—the larger of which coming from The Buckeye State.

Major State Tax Proposals and Developments

• HAWAII Gov. Josh Green signed a tax bill into law, which doubles the state’s Earned Income Tax Credit from 20 percent to 40 percent of the federal credit and doubled the food excise tax credit. Green supported including other tax provisions earlier in the year that were not included in the final bill, such as adjusting income tax brackets and creating new excise tax exemptions. He described the new tax bill as a first phase of tax changes. – BRAKEYSHIA SAMMS
• OHIO Gov. Mike DeWine signed the state’s budget, which includes condensing the state’s income tax brackets that provides top-heavy cuts to higher income households. DeWine also issued line-item vetoes on several tax provisions, including an extension of the state’s sales tax holiday to a minimum two weeks and a provision allowing the state tax commissioner to set personal income tax rates and brackets. – MILES TRINIDAD
• NEW JERSEY Gov. Phil Murphy approved the state’s budget, which included property tax cuts for seniors and a doubling of the state Child Tax Credit to $1,000. Murphy also signed legislation that overhauls the method for apportioning taxable income on unitary combined reporting groups and increases the exemption for global intangible low- taxed income (GILTI) from 50 percent to 95 percent, among other corporate tax changes. – MARCO GUZMAN
• WISCONSIN Gov. Tony Evers used his partial veto power to reject tax rate cuts for the state’s two highest income brackets while allowing cuts to the bottom two brackets to pass. The original package passed by the Republican controller legislature would have cost the state $3.5 billion over a biennium. Reducing only the bottom two brackets will result in $175 million in lost revenue. – NEVA BUTKUS

State Roundup

• Gov. John Bel Edwards in LOUISIANA has vetoed a bill that would have phased out the state corporate franchise tax. It was tied to legislation that reduced the state’s Quality Jobs tax credit to compensate for the lost revenue but would have still resulted in a $140 million loss over five years.
• The MAINE House passed the bipartisan spending bill that includes making the state’s Dependent Exemption Tax Credit refundable; a paid family leave program funded by a 1 percent payroll tax; an increased Property Tax Fairness Credit for seniors; and more funding for the property tax deferral program.
• The NEBRASKA Farmer’s Union Board of Directors voted to join the ballot initiative aiming to repeal LB735, the just-signed law which creates a dollar-for-dollar income tax credit for donations to private and parochial schools.
• The TEXAS legislature continues to debate competing proposals on property tax relief in a special session. The Senate is pushing to increase the state homestead exemption to $100,000 while the House advocates for lower rates.

 

If you like what you are seeing in the Rundown (or even if you don’t) please send any feedback or tips for future posts to Aidan Davis at [email protected]. Click here to sign up to receive the Rundown via email.

---

---