District of Columbia

States continue to debate whether and how to link their state tax codes to the 2025 federal tax law. This is not just a technical debate.

Yesterday was Tax Day, and with many state legislative sessions wrapping, some tax changes are gearing up or crossing over the finish line.

Policymakers in Maine and Oregon wisely said “no” last week to an income tax break for deep-pocketed tech investors and venture capitalists that was expanded in last year’s federal tax bill.

ITEP tracks tax discussions in legislatures across the country and uses our unique data capacity to analyze the revenue, distributional, and racial and ethnic impacts of many of these proposals. State Tax Watch offers the latest news and movement from each state.

In Washington, Gov. Bob Ferguson and lawmakers decided to stop fooling around with one of the nation’s most upside-down tax codes and finally brought to life a new millionaires’ tax, the first new income tax created in a state since 1991.

Washington is on its way to making history after the legislature approved the “millionaires’ tax,” a 9.9 percent tax on income over $1 million. The bill, which is expected to raise more than $3 billion a year, making significant investments in public education and childcare, will also expand the Working Families Tax Credit – the […]

As many state legislative sessions near or cross the halfway point, lawmakers are facing tough choices.

State lawmakers are grappling with a range of challenges as their fiscal outlooks deteriorate, federal tax enforcement wanes (after the Trump administration cut the IRS workforce by 25 percent), and a rewritten federal tax code sends states scrambling to decide what changes they might want to make in their own codes.

While some may be excited for a romantic Valentine’s Day this weekend, many state lawmakers are breaking up and decoupling from recent federal tax changes that are poised to leave states with revenue shortfalls – much like a bad date who forgets their wallet and asks you to pick up the tab.

The results are a mixed bag, with some states enacting promising policies that will improve tax equity and others going in the opposite direction.

Federal lawmakers passed a bill along party lines that would force the District of Columbia to override the decision of local elected officials and implement all of the costly and inequitable federal tax cuts passed under the “One Big Beautiful Bill Act” (OBBBA).

Despite wintry conditions across much of the country, that hasn’t stopped state lawmakers from debating major tax policy changes.

They should take steps to protect and boost their own revenues. And they should take a second look at their own tax cuts.

In the same way states are building upon federal tax credits, localities should consider building on state tax credits.

Many states already recognize the potential of these credits to boost low- and moderate-income households. Other states should follow suit.

It’s wildly inappropriate for a U.S. Treasury Secretary to lean on states to adopt or not adopt specific federal provisions in their own state tax codes.

State deductions for tips and overtime are not only ineffective at supporting working-class people, it will come at a substantial cost to state budgets.

An unknown number of workers who previously were assumed to be ineligible for the tax break may nonetheless claim it.

The 2025 federal tax law risks making 529 plans more costly for states by increasing tax avoidance and allowing wealthy families to use these funds for private and religious K-12 schools.

Vacancy taxes will not single-handedly solve problems in cities, but they are worth considering to address housing shortages, land use, and building thriving communities.

A costly tax break for wealthy venture capitalists is drawing some critical attention from state policymakers.

Despite being an off-year election, voters made a call for shared public investments at the polls.