August 10, 2023
August 10, 2023
August is here, school is starting, and with that comes back to school shopping. While we all love a deal, sales tax holidays are less than ideal. They tend to be gimmicky policy options that do little to provide meaningful sales tax reform for those who need it most. To better understand our take, have a look at our latest report, where we find that 19 states will forgo a combined $1.6 billion in tax revenue this year. While the overall count of states with sales tax holidays on the books declined from the year prior (20), the overall cost has risen with notable expansions in Florida, Louisiana, and Tennessee.
Major State Tax Proposals and Developments
- OHIO voters rejected a ballot measure that would have increased the simple-majority threshold to change the state’s constitution from 50 percent to a 60 percent supermajority. Had it passed, Issue 1 would have effectively eliminated the state’s citizen-initiated ballot measure. – MILES TRINIDAD
- PENNSYLVANIA Gov. Josh Shapiro signed legislation expanding the Property Tax and Rent Rebate Program, which is available to seniors. The bill increases the maximum income eligibility from $35,000 to $45,000, increases the maximum rebate from $650 to $1,000, provides identical rebate amounts to renters, and annually adjusts the program to rise with the cost of living. – MILES TRINIDAD
- ARIZONA Gov. Katie Hobbs agreed to a deal with Republican leaders to put a transportation funding plan on the ballot in November, which also includes a ban on cities and towns imposing rental taxes—a proposal that the governor vetoed earlier this year. The ban is expected to cost the cities and towns that have taxes in place almost $230 million annually.
- MISSOURI Gov. Mike Parson signed a new corporate tax credit into law, offering companies a $1,500 credit for up to six paid apprentices or interns. Motivated by migration concerns, the credit was designed to encourage firms to create entry-level positions.
- Spending in a fight to give NEBRASKA voters a chance to repeal LB 753 has reached over $2 million. The legislation provides a dollar-for-dollar tax credit for private school donations that will redirect up to $100 million per year away from state needs. The majority of that spending to date is from opponents of the unpopular bill, while the largest contributor seeking to retain it is a Betsy DeVos-led national interest group.
- NEVADA, which already has a version of the private school donation tax credits Nebraskans are wrangling over, is facing just the kind of pressures opponents of these credits worry about: money has been drawn away from public coffers by the tax credits, but education privatizers are now complaining that the program isn’t big enough and the private schools need more public tax dollars.
- NEW YORK lawmakers are considering banning companies that displace human workers with AI bots from receiving the state’s film tax credit.
- NORTH CAROLINA has yet to pass a budget despite being a month into the fiscal year. House and Senate leaders are reporting coming to an agreement on an income tax cut plan, but details of the plan are yet to be released.
- WEST VIRGINIA concluded a three-day special session that included a fix to its recent vehicle personal property tax credit.
- WISCONSIN Gov. Tony Evers is calling for a special session to allocate surplus funds on childcare, higher education, and paid family leave. Republican leadership has voiced opposition to the additional spending and instead is supporting using the temporary surplus on additional income tax cuts.
What We’re Reading
- The Center on Budget and Policy Priorities Michael Mazerov published a report exploring state taxes and their impact on migration. The report finds that taxes have minimal impact on people’s interstate moves. This comes in stark opposition to claims promoted by anti-tax advocates.
- Puerto Rico announced that it is cooperating with tax authorities in the United States as they investigate roughly 100 wealthy individuals suspected of misusing a program that allows them to avoid paying federal income tax and tax on capital gains.
- Former Kansas House Majority Leader, Donald Hineman, warns his Republican colleagues in North Carolina to be wary of using tax cuts to create economic prosperity.
- The TaxVox blog checks in on interstate fights of taxation of remote workers across state lines.
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