State Tax Watch
Updated 3/13
Despite mixed economic signals for 2023, including a possible recession, many state lawmakers want to use temporary budget surpluses to forge ahead with permanent, regressive tax cuts that would disproportionately benefit the wealthy at the expense of low- and middle-income households. These cuts would put state finances in a precarious position and further erode public investments. In the event of an economic downturn, these harmful effects would be accelerated and amplified.
But there are positive trends in the states as well. With households feeling the pinch of inflation and fears of a possible recession, lawmakers are rightly considering policies like the Child Tax Credit and Earned Income Tax Credit that will improve the lives of their constituents.
ITEP is tracking these tax discussions in legislatures across the country and using our unique data capacity to analyze the revenue, distributional, and racial and ethnic impacts of many of these tax proposals. This page is updated on weekly basis with the latest news and movement from each state.
To learn more about state tax proposals, hover over each state below.
Below are summaries of pending tax legislation in each state. Click on your state to jump to the summary.
You can also get weekly updates by signing up for our State Rundown.
Alabama
Gov. Kay Ivey proposed one-time rebates of $400 and $800 for families. She also called for lowering small businesses’ prepaid sales tax payments. Tax cuts are also being considered, but the details remain unclear. Legislators may also consider cutting or eliminating the grocery tax or reducing municipal occupational taxes that boost funding for local services. Some lawmakers have proposed capping the state's federal income tax deduction.
Alaska
The state has been facing fiscal challenges in part due to overreliance on oil and gas revenue. Alaska does not have income, property or sales taxes, but localities collect sales taxes and include groceries in the base. Some localities, including Juneau, have considered eliminating their sales taxes on food in recent years. Alaska’s proposed budget is down $460 million dollars from FY23. Due to lower than expected oil prices, the budget calls for drawing funds from the Constitutional Budget Reserve of $245 million, and $20 million from the Statutory Budget Reserve.
Arizona
A bill that would cut the corporate income tax rate from 4.9 percent to 2.5 percent by 2026 passed out of the House and will now head to the Senate. The push to cut the state's corporate income tax rate comes as lawmakers at the state and federal level have begun jockeying to make Arizona a home for microchip manufacturing operations. Gov. Katie Hobbs has proposed a state Child Tax Credit and a move to exempt diapers and feminine hygiene products from state sales tax. Other tax proposals are likely to be discussed. Last year the state moved to a 2.5 percent flat tax (effective in 2023) and Proposition 132 passed, a supermajority requirement to approve new taxes via the ballot process. That follows the courts overturning Proposition 208 which enacted a 3.5 percent surcharge on individual income above $250,000 single and $500,000 married to fund education.
Arkansas
Gov. Sarah Huckabee-Sanders is slated to sign a school voucher bill that would move the state closer to education privatization, paying for private school tuition and home-schooling costs. The governor has signed a bill into law that prohibits local governments from enacting income taxes. Although no localities currently have a local income tax in place, this type of state interference prevents local policymakers from being able to serve their communities. Income tax elimination was a campaign priority for Gov. Sanders, and lawmakers are discussing income tax rate cuts this session. Lawmakers enacted large cuts to the state's personal and corporate income taxes 2021 and, in a special session last year, opted to accelerate existing individual and corporate income tax reductions.
California
The state has a modest deficit (about $22.5 billion, depending on the estimate) to cover for FY24 and substantial reserves. Policymakers are optimistic the state can fund most key priorities. Gov. Gavin Newsom has made several relatively minor tax proposals to date.
Colorado
Proposals have been introduced to increase the state EITC to 40 percent of the federal credit and the Child Tax Credit to 70 percent of the federal credit, matching federal eligibility. Gov. Jared Polis has asked lawmakers for another $200 million toward property tax cuts over the next two years — in addition to $700 million passed last year — in his updated budget proposal. The governor has clearly stated his intention to continually chip away at the state's income tax. His budget request also calls for reserving 15% of the state’s general fund for a rainy day fund. Colorado is projecting a $1.3 billion surplus, but the legislature is limited in how much it can spend due to TABOR.
Connecticut
Gov. Ned Lamont's budget proposal centers a cut to the bottom two income tax rates (from 3 and 5 percent to 2 and 4.5 percent, respectively). He also proposed continuing the state's 10 percent corporate tax surcharge and a permanent increase to the state's EITC to 40.5 percent of the federal credit. The governor has proposed restoring the state's pass-through entity tax credit to its original level. The credit provided a workaround for businesses to avoid the federal SALT Cap on state and local deductions. He previously voiced commitment to delivering a "middle-class" tax cut this session. Going forward, the governor says the state must grow its tax base. The state has a projected $2.8 billion surplus.
D.C.
The D.C. Tax Revision Commission is currently underway. The commission will recommend policy changes later this year. In 2021, DC added a tax on the wealthy and improved their existing EITC.
Delaware
Gov. John Carney announced a plan to increase the state standard deduction, along with an increase on the state EITC to 7.5 percent of the federal credit. The state currently offers a 20 percent nonrefundable or a 4.5 percent refundable credit. Lawmakers are likely to discuss increasing deductions for 529 savings accounts and another tax rebate.
Florida
Part of Gov. Ron DeSantis’ tax cut proposals for 2023 includes $1.1 billion in tax breaks through multiple tax holidays. There is a focus on increasing ITIN access. Some advocates could push for a millionaire’s tax this session. Corporate tax cuts could be in the mix again this year.
Georgia
A bill backed by Gov. Brian Kemp that would provide income tax rebates of $250 for single filers and double that for joint filers was recently approved by a House subcommittee, and, overall, lawmakers are expected to consider spending $1 billion on a one-time rebate and $1 billion on property tax cuts. Acceleration of tax cuts previously enacted may be considered, along with tobacco tax increases and a potential film tax. The state enacted a flat 5.49 percent income tax rate last year (effective in 2024) that will be reduced to 4.99 percent over time.
Hawaii
The Senate Judiciary Committee gave preliminary approval to Senate Bill 925, which would enact a 1 percent tax every year on the net worth of individuals with assets in Hawaii of more than $20 million. Gov. Josh Green proposed tax policies aimed at providing economic security and a lower cost of living for households in Hawaii. They include a $500 educator tax credit for teachers, doubling the standard deduction and personal exemption, adjusting tax brackets and deductions for inflation, increasing eligibility for the food tax credit, and expanding the state’s EITC and CDCTC. The governor has also expressed interest in taxing vacant lands as a way in which to combat rising housing costs.
➜ Read more from the Hawaii Budget & Policy Center on adopting a state Child Tax Credit and closing the capital gains loophole.
Idaho
Gov. Brad Little committed to an additional $120 million in property tax cuts this session. During a 2022 special session, lawmakers moved the state to a flat income tax rate and spent $500m on rebates, among other things.
Illinois
Lawmakers are likely to debate a state Child Tax Credit and property tax credit this year, along with some small revenue raisers.
Indiana
The Senate unanimously passed Senate Bill 3, creating a blue-ribbon commission to study income tax elimination and local property tax reform. Lawmakers continue to advance a bill which would simplify and expand the state’s Earned Income Tax Credit. Despite caution from the Senate, the House passed a budget bill that would speed up scheduled cuts to personal income tax rates. Under their proposal the state will move to 3.0 percent in 2024 and 2.9 percent in 2026, which is three years sooner than expected. The director of the state's office of management and budget and in-state economists cautioned and pushed back against. Lawmakers have also proposed adding a state workaround to allow passthrough businesses to deduct their state income taxes on federal returns.
Iowa
Gov. Kim Reynolds proposed cutting the state’s personal income tax to 2 percent and expressed her desire to take the rate to zero by the end of her term in 2026. This is on top of large tax cuts passed in 2022. Lawmakers have promised to debate property tax cuts and major changes to education school vouchers this session.
Kansas
A tax cut plan backed by the Chamber of Commerce would move the state's individual and corporate income taxes to a flat rate. This costly, regressive proposal would cost $1.5 billion with nearly 50 percent of the benefit going to the top 20 percent of Kansans. Gov. Laura Kelly has voiced opposition to “irresponsible tax proposals,” which presumably refers to the Republican-backed effort to move to a flat income tax. Instead, the governor has committed to eliminating sales tax on feminine hygiene products and diapers, creating a back-to-school sales tax holiday, and increasing the exemption threshold for Social Security benefits from $75,000 to $100,000. Lawmakers have proposed legislation that would remove the sales tax on grocery items that the Women, Infants, and Children (WIC) program considers healthy, such as fruits, vegetables, meat, and fish. Also, the TEL constitutional amendment proposal that would require a two-thirds majority to put a constitutional amendment on the ballot may return again this year.
➜ Read more on the push for a flat tax from Kansas Action for Children.
Kentucky
Gov. Andy Beshear signed a major tax cut (HB1) into law despite near universal opposition from Democratic lawmakers. As a result, Kentucky’s income tax rate will drop from 4.5 percent to 4.0 percent. This comes after last year's HB8 cut the income tax rate from 5 to 4.5 percent with a phasedown. Issues likely to be discussed include neo-vouchers, sales tax exemptions, and local tax policy changes. A tax shift conversation (moving away from income taxes and toward consumption taxes) is also likely.
➜ Read a full analysis of Kentucky's proposed tax cut from the Kentucky Center for Economic Policy.
Louisiana
This is a year in which Louisiana lawmakers are able to consider tax changes. It is also a major election year. Policies that are expected to be raised and debated include income tax elimination and a move to enact a flat income tax rate. A temporary sales tax is set to expire in 2025, so decisions around how to make up for that lost revenue are underway. Advocates for low- and middle-income families and a more equitable tax code are pushing for improvements to the state's Earned Income Tax Credit, a new state Child Tax Credit and paid family leave.
Maine
Debates are expected around a state Child Tax Credit, the potential of a state corporate minimum tax, tax haven legislation and broader corporate transparency. Property taxes are likely to be discussed as lawmakers consider a property tax freeze for seniors. Gov. Janet Mills has stated that she does not plan to raise taxes. The legislature recently approved a $473 million emergency spending bill to provide $450 energy relief checks for individuals who make less than $100,000.
Maryland
In his State of the State address, Gov. Wes Moore stated his aim of eliminating child poverty in Maryland. His budget includes a permanent extension of the enhanced state EITC, expansion of the state Child Tax Credit (which has historically been limited and temporary) and a proposal to expand the military tax exemption. The governor campaigned on more equitable taxes, but not on raising taxes. He has also proposed eliminating the state's estate or inheritance taxes. Meanwhile, Maryland's tax on digital advertising on tech giants such as Amazon, Facebook, Google and Microsoft is making its way through the courts. And lawmakers have held a hearing on a corporate tax transparency proposal that would require publicly traded corporations to disclose on their state tax returns their effective tax rate, how the rate was calculated, and the impact of any credits, deductions, and adjustments.
Massachusetts
Gov. Maura Healey formally unveiled details of her tax plan, which includes a $600 child and dependent tax credit, an increase to the estate tax threshold from $1 million to $3 million, and a cut to the short-term capital gains rate from 12 to 5 percent. The legislature is focused on implementation of the Fair Share Amendment, the successful 2022 ballot initiative that creates a 4 percent surcharge on income over $1 million to fund education and transportation projects.
Michigan
Gov. Gretchen Whitmer signed into law a nearly $1 billion dollar tax cut. The law will increase the state’s EITC from 6 percent to 30 percent of the federal EITC. It will also gradually phase out the limits on the amount of retirement and pension income that can be deducted from taxable income, as well as expand complete retirement income exemptions from taxable income for specific public employees. A 2015 state law, a tax trigger that tied the income tax to revenues, is expected to soon decrease revenue by another $700 million by lowering the state’s income tax rate to 4.05%. Democrats are exploring ways to prevent a triggered automatic income tax rate cut by putting money toward business subsidies. The Democrats have a trifecta in Michigan after flipping both chambers.
Minnesota
Republican lawmakers released their tax plan, which includes rebate checks of up to $2,500, eliminating tax on Social Security income, and a temporary $1,800 Child Tax Credit. Gov. Tim Walz's bold budget proposal includes a number of revenue raisers, including a new payroll tax for paid family and medical leave, a 1.5 percent tax on gains and dividends between $500,000 and $1 million, and a 4 percent tax on gains over $1 million. The proposal would also create a new $1,000 refundable Child Tax Credit for qualifying children, provide an expansion of the state child and dependent care credit, rebate checks, $219 million for reductions to taxes on Social Security benefits, and cannabis legalization. The Democrats have a trifecta in Minnesota after flipping the Senate.
➜ Read more on the governor's budget proposal from the Minnesota Budget Project.
Mississippi
Due to lack of agreement between House and Senate members, it does not appear that tax cuts or rebates are likely to happen this session. Many lawmakers seem hesitant to make further cuts on top of those that were put in place just last year. In his State of the State address, Gov. Tate Reeves again reiterated his desire to eliminate the state's income tax. He also wants to create a child and dependent care tax credit and a deduction for child care supplies. Speaker Gunn also proposed a range of income tax cuts short of full elimination, which include speeding up the existing income tax cut phase-in and reducing the top income tax bracket from 3.75 to 3.5 percent. Alternatively, the Lt. Governor is promoting an income tax rebate plan and a reduction to the state's 7 percent grocery tax, and a bill to make this reduction has now been introduced. Under HB 531 in 2022, Mississippi moved to a flat 4 percent income tax rate over four years. That legislation contains language stating that the legislature will revisit the cut and consider full income tax elimination leading up to 2026.
Missouri
A state senator has advanced a proposal to phase out the state’s corporate income tax. Meanwhile, the Senate has given initial approval to a personal property tax cut. Bills have also been introduced to reduce the top income tax rate, eliminate the sales tax on food and repeal taxes on motor fuel. State revenues are forecasted to slow.
Montana
A key piece of Gov. Greg Gianforte's budget plan that would have created a $1,200 child tax credit was tabled in the House Appropriations Committee. Other components, which includes an income tax cut, an increase to the state EITC, a reduction on taxes on capital gains, and a one-time rebate, have advanced. House members previously approved six bills, including income tax rebates of up to $2,500 for joint filers, a property tax rebate of up to $500 for owners' primary residences, and a replacement of the capital gains exclusion with reduced tax rates, among others.
Nebraska
Gov. Jim Pillen has called for tax changes, including a cut to the top income tax rate - to 3.99 percent. Lawmakers have summarized a series of tax plans which would reduce top income tax rates or abolish the progressive income tax rate structure completely. Another lawmaker introduced a plan to provide a state CTC. Meanwhile, Gov. Pillen laid out his proposal to revamp school funding by implementing a per-student minimum amount of state foundation aid, more special education funding, a cap on school spending growth, and supermajority requirements to ratchet local education funding downward over time.
➜ More details from Open Sky Policy Institute: Major tax and education plans would quickly drain flush state coffers
Nevada
Gov. Joe Lombardo called for corporate tax cuts and use of federal pandemic aid to fund a one-year gas tax suspension and state employee pay raises, among other items, in his first State of the State address. The state has strict institutional barriers in place that limit many progressive tax changes. However, revenue raising is a topic of discussion that some lawmakers will likely explore this session.
New Hampshire
The state's interest and dividends tax rate is set at 4 percent in 2023 but will continue to phase out, ultimately reaching zero in 2026. Lawmakers may reconsider the timing of the phaseout, and business taxes cuts are likely to be discussed again this session. Meanwhile, the statewide education property tax has been challenged as unconstitutional. Currently, some municipalities do not pay the full rate while others do.
New Jersey
Gov. Phil Murphy's budget plan includes a Child Tax Credit of $1,000 for children aged 6 and under (which effectively doubles the existing credit) and a plan to reduce taxes on global intangible low-taxed income (GILTI). In his budget address he reiterated that he intends on letting the corporate business tax surcharge to expire. Lawmakers and advocates have been pushing to improve the state's Child Tax Credit that was created in 2022. Gov. Phil Murphy has said he will not consider tax increases. He supports allowing the state's Corporate Business Tax to sunset. There's also interest and anticipated debate around digital taxation.
New Mexico
Lawmakers have unveiled their omnibus tax bill (HB 547), which includes a restructuring of the state personal income tax, an increase to the Child Tax Credit, a cap on the state's capital gains exclusion, and one-time rebates. The changes come in addition to corporate income tax and low-income credit increases, an alcohol tax increase, and a cut to the state's Gross Receipts Tax, among others. The state is projecting a $3.6 billion revenue surplus. New Mexico recently created and enhanced their state Child Tax Credit and Earned Income Tax Credit. There may also be discussion of income tax rate and bracket reforms with an eye toward making the state's income tax more progressive.
New York
Gov. Kathy Hochul's budget proposal includes a payroll tax on part of the state to bolster funding for the New York City subway system and an extension of an existing tax on large corporations, which was otherwise scheduled to expire at the end of 2023. Lawmakers are exploring options to enhance existing state credits. One proposal would consolidate the state's Child Tax Credit and Earned Income Tax Credit to a single Working Families Tax Credit.
North Carolina
Gov. Roy Cooper says that his budget will not raise taxes, but said that tax cuts at the top will only hurt the state’s growth and there is no need for more corporate tax cuts. Some lawmakers have considered acceleration of the state's corporate income tax elimination, elimination of the franchise tax and additional income tax cuts. There could also be discussion of property tax improvements.
North Dakota
The House passed a flurry of bills, including legislation that would reduce the state’s income tax, create a flat tax, create new sales tax exemptions, and repeal an automatic trigger that increases the oil production and extraction rate depending on the price of oil. The Senate passed legislation that would give parents with household incomes below $120,000 a tax credit for day care costs. The credit would be the greater of 40 percent of the credit allowed under the federal Child and Dependent Care Credit program or 10 percent of the credit allowed under the federal Child Tax Credit. Gov. Doug Burgum's proposed 2023-25 budget included cuts to state income taxes, including eliminating the tax for three out of five taxpayers. Burgum also called on the legislature for an eventual complete elimination of the income tax. Lawmakers, including the governor, have made the case for moving to a flat tax. The state's general fund revenue exceeded forecasts due to higher oil prices.
Ohio
Members of the GOP leadership unveiled their priority bills, which include creating a flat state income tax of 2.75 percent while exempting the first $26,050 of income. The top-heavy tax cut would significantly decrease state revenue, so the legislation would offset the cost by eliminating $1.2 billion in payments to schools and local governments. It would also decrease property taxes from 35 percent to 31.5 percent while also eliminating a provision requiring the state payments to cover a portion of Ohioan property taxes. In his State of the State address, Gov. Mike DeWine included proposals for a $2,500 per child income tax deduction, exemption of a range of infant supplies from the state sales tax base, creation of a low-income housing credit and a single-family housing tax credit to incentivize housing construction, and additional funds for the film tax credit program. Concern remains around the push for a supermajority requirement of 60 percent for approving constitutional amendments.
Oklahoma
In his State of the State address, Gov. Kevin Stitt called for two major tax cuts: an end to the state's 4.5 percent sales tax on groceries and a reduction of state’s top personal income tax rate to 3.99 percent. Both Democrats and Republicans support the elimination of the sales tax on groceries. Together the cuts are estimated to cost the state around $612 million a year. The House Speaker previously announced that tax cuts will be the focus of the 2023 legislative session. The House passed legislation that would provide families refundable tax credits for each child they send to private schools or educate by other means, such as homeschooling. The bill also includes an exemption incentive for college graduates to stay in Oklahoma. In the Senate, the Republican caucus chair is leading a tax reform working group to study specific policy ideas.
➜ More from the Oklahoma Policy Institute: The needs of everyday Oklahomans outweigh tax cuts that benefit the wealthy
Oregon
The kicker rebate, which returns excess state revenue to taxpayers, is expected to grow to $3.9 billion. However, the growing rebate comes as state economists forecast the state will have $3 billion less general fund and lottery revenue to spend in the next biennium. There are progressive pushes for a Child Tax Credit, mortgage interest deduction, and corporate tax reform. The Democrats lost their supermajority in the Senate in the recent election cycle, which could potentially limit tax policy discussions this session.
Pennsylvania
Gov. Josh Shapiro unveiled his first budget proposal, which includes increasing the income threshold for a state property tax and rent rebate program for older adults. It also includes a tax credit over three years for anyone who earns or moves to the state with a teaching, nursing, or law enforcement certification. Fair Share Tax legislation would raise $2.8 billion in new tax revenue by decreasing the personal income tax on wages to 2.8% from 3.07% and increasing to 6.5% the income tax on passive income from things like net profits, dividends, and gains through estates and trusts.
Rhode Island
Gov. Dan McKee proposed a $100 million tax cut plan as part of his budget proposal. The proposal includes reducing the state’s sales and corporate minimum tax, stopping the gas tax increase, providing energy bill rebates, and ending the litter tax for businesses. Some lawmakers continue to push to create a new tax bracket for the top 1 percent of earners. And the Senate President has noted that a state Child Tax Credit is a top priority. Lawmakers may also discuss estate tax changes, and policies to raise wages and fill state job vacancies.
South Carolina
Gov. Henry McMaster urged lawmakers to drop the state’s income tax rates from 6.5 percent to 6.4 percent faster than intended under the state's scheduled phasedown. In 2022, the state condensed their graduated income tax to two brackets and cut rates. Lawmakers are also considering eliminating taxes on menstral products.
South Dakota
The Senate Taxation Committee advanced an amended bill that would reduce the state’s sales tax from 4.5 percent to 4.3 percent, a smaller reduction than the bill’s original rate of 4.2 percent, and added a sunset clause that would end the reduction on June 30, 2025. The House previously passed legislation that would reduce the state’s sales tax from 4.5 percent to 4.2 percent. The move came after the House Appropriations Committee rejected Gov. Kristi Noem’s proposal to repeal the state’s grocery tax. Local officials pushed back on this proposal, citing concerns about the financial future of South Dakota cities. A similar proposal fell short in 2022 due to concerns of replacing the more than $100m in lost revenue.
Tennessee
Gov. Bill Lee made extending the one-month grocery tax exemption by three additional months a priority in his 2023 State of the State address.
Texas
Gov. Greg Abbott has been promoting his short and long-term recommendations for property tax cuts. His budget includes a $15 billion cut to property taxes. Gov. Abbott proposed maintaining existing cuts to school property taxes made under the school finance reform in 2019 and using state dollars to further reduce taxes under that law. His long-term plans includes eliminating property taxes for school districts. A list of bills, including one to cut property taxes, have been shortlisted and will be a priority in the Senate during the legislative session. Meanwhile, lawmakers are considering whether and how to tax owners of Electric Vehicles. House and Senate leaders' released their tax plans which include property tax cuts through a $3.1 billion appropriation for buying down school districts’ property tax levy and tax cuts through homestead exemptions.
Utah
Lawmakers have reached an agreement that would cut the flat income tax rate (from 4.85 to 4.65%), expand the Social Security benefits credit, increase the Earned Income Tax Credit (from 15 to 20%), double the credit for unborn children, and remove state sales tax on groceries. The sales tax component is contingent upon voters approving a constitutional amendment that would eliminate an earmark on income tax revenues that are specifically used to fund education. Gov. Spencer Cox initially proposed roughly $1 billion in tax cuts in his fiscal 2024 budget plan.
Vermont
Gov. Phil Scott's budget proposal includes proposals to increase the Earned Income Tax Credit from 38 to 45 percent of the federal credit, eliminate taxes on military pensions and increase the state's Social Security tax exemption. Lawmakers are likely to continue to consider recommendations from the state's Tax Structure Commission that released a final report in 2021. Revenue has been exceeding expectations. Among other things, lawmakers enacted a Child Tax Credit in 2022 that provides a $1,000 credit for children under 6 that phases out at higher incomes. Vermont Republicans are also pursuing a reduction in property taxes.
Virginia
The Republican-controlled House passed Gov. Glenn Youngkin’s $1 billion tax relief program, which includes cuts to the individual income tax and corporate tax, as well as a deduction for small businesses. Now the legislation awaits action from the Democratic-controlled Senate. The governor proposed $1 billion in tax cuts on top of the $4 billion lawmakers passed in the last budget. The cuts the top income tax rate from 5.75% to 5.5%, as well as the corporate income tax rate from 6% to 5%. Gov. Youngkin campaigned on eliminating the state's income tax, but has since changed course, citing a possible economic downturn. Democrats are also pushing for a refundable EITC.
Washington
State lawmakers are considering a 2.5 cent per mile vehicle usage tax that would start out as a voluntary program combined with a credit for gas taxes and become universal in 2030. A bold proposal would create a first-of-its kind state wealth tax, set at 1 percent of the value of financial assets exceeding $250 million. A focus remains on the state's new tax on capital gains as it works its way through the courts.
West Virginia
Gov. Jim Justice signed into law an $800 million dollar tax cut, which includes a roughly 21 percent cut in the personal income tax, rebates for the state’s tax on vehicles, and partial rebates for personal property taxes paid by some smaller businesses. The new law includes automatic triggers for further personal income tax cuts which would eventually eliminate the personal income tax entirely. Gov. Jim Justice originally proposed a 50 percent cut in the state’s personal income tax. The state expects a $1.8 billion surplus this fiscal year. In late 2022, Amendment 2 failed. If enacted, it would have authorized the legislature to reduce or eliminate tangible personal property taxes.
➜ More from the West Virginia Center on Budget & Policy: Senate Tax Cut Plan Not What Was Promised to Average West Virginians, Poses Significant Risks of Future Tax Increases or Budget Cuts
Wisconsin
Gov. Tony Evers has proposed a package of tax changes that would reduce state revenues by $1.2 billion over two years. For individuals, Evers proposes a 10 percent income tax reduction for single filers earning less than $100,000 ($150,000 for married files), expanding the state Earned Income Tax Credit, expanding the Child and Dependent Care Tax Credit, creating a new caregiver tax credit, and additional cuts for seniors and recipients of federal aid. For businesses, Evers proposed eliminating the business personal property tax (and transferring equivalent state funds to localities to compensate) and expanding the refundable share of the research credit. Although his proposals are mostly reductions in revenue, he also proposed a progressive revenue raiser that would limit the long-term capital gains exclusion to exclude the highest-income earners. He has also proposed a restructuring of the state’s sales tax structure to send more sales tax dollars to localities, and to authorize counties to impose an additional local option sales tax by referendum. Republican leaders have proposed moving the state to a flat income tax structure and are also pushing for a retirement income tax cut. The state has a projected $6.6 billion surplus. Lawmakers will have to negotiate the details with Gov. Evers because he holds veto power.
Wyoming
Gov. Mark Gordon signed a joint resolution to place an amendment before voters that would create a new class for residential real property and allow state lawmakers to cut residential property tax assessments. A cigarette tax increase may also be considered. Some lawmakers are considering taking a comprehensive look at the state's tax policies over the next few years (similar to what was done in 2000).