South Dakota

This week the governors of Louisiana and Minnesota both vetoed budget bills, leading to another special session in Louisiana and unanswered questions in Minnesota, and Missouri legislators managed to push through a tax shift bill just before adjourning their regular session and heading right into a special session to impeach their governor. Wisconsin and Wyoming localities are both looking at ways to raise revenues as state funding drops. And our What We're Reading section contains helpful pieces on changing demographics, the effects of wealth inequality on families with children, and the impacts of the Supreme Court sports gambling and online…

An updated version of this blog was published in April 2019. State tax policy can be a contentious topic, but in recent years there has been a remarkable level of agreement on one tax in particular: the gasoline tax. Increasingly, state lawmakers are deciding that outdated gas taxes need to be raised and reformed to fund infrastructure projects that are vital to their economies.

This week the IRS website asked some would-be tax filers to return after December 31, 9999. State legislators don't have quite that much time, but are struggling to wrap up their tax debates on schedule as well. Iowa legislators, for example, are ironically still debating tax cuts despite having run out of money to cover their daily expenses for the year. Nebraska's session wrapped up, but its tax debate continues in the form of a call for a special session and the threat of an unfunded tax cut going before voters in November. Mississippi's tax debate has been revived by…

The U.S. Supreme Court is scheduled to consider a case next week (South Dakota v. Wayfair, Inc.) that has the potential to significantly improve states and localities’ ability to enforce their sales tax laws on Internet purchases.

Online shopping is hardly a new phenomenon. And yet states and localities still lack the authority to require many Internet retailers to collect the sales taxes that their locally based, brick and mortar competitors have been collecting for decades.

A new ITEP analysis reveals that in seven states (Alabama, Alaska, Idaho, Iowa, Mississippi, New Mexico, and Pennsylvania), the nation’s largest e-retailer, Amazon.com, is either not collecting local-level sales taxes or is charging a lower tax rate than local retailers. In other states, such as Colorado and Illinois, Amazon is collecting local tax because it has an in-state presence, but localities cannot collect taxes from other e-retailers based outside the state.

This Valentine's week finds California, Georgia, Missouri, New York, Oregon, and other states flirting with the idea of coupling to various components of the federal tax-cut bill. Meanwhile, lawmakers seeking revenue solutions to budget shortfalls in Alaska, Oklahoma, and Wyoming saw their advances spurned, and anti-tax advocates in many states have been getting mixed responses to their tax-cut proposals. And be sure to check out our "what we're reading" section to see how states are getting no love in recent federal budget developments.

This week marks the beginning of what is bound to be a wild year for state tax and budget debates. Essentially every state is already working to sort through the complicated ramifications of the federal tax cuts passed in December, including Kansas, Michigan, Montana, and New Jersey highlighted below. These and other states will have important decisions to make about how to incorporate, reject, or mitigate various aspects of the new federal law, and will need considerable resolve to improve state tax policy to be more fair and more adequate – even as federal taxes become less so.

The final tax bill that Republicans in Congress are poised to approve would provide most of its benefits to high-income households and foreign investors while raising taxes on many low- and middle-income Americans. The bill would go into effect in 2018 but the provisions directly affecting families and individuals would all expire after 2025, with […]

The final Trump-GOP tax law provides most of its benefits to high-income households and foreign investors while raising taxes on many low- and middle-income Americans. The bill goes into effect in 2018 but the provisions directly affecting families and individuals all expire after 2025, with the exception of one provision that would raise their taxes. To get an idea of how the bill will affect Americans at different income levels in different years, this analysis focuses on the bill’s impacts in 2019 and 2027.

The House passed its “Tax Cuts and Jobs Act” November 16th and the Senate passed its version December 2nd. Both bills would raise taxes on many low- and middle-income families in every state and provide the wealthiest Americans and foreign investors substantial tax cuts, while adding more than $1.4 trillion to the deficit over ten years. The graph below shows that both bills are skewed to the richest 1 percent of South Dakota residents.

The House passed its “Tax Cuts and Jobs Act” November 16th and the Senate passed its version December 2nd. Both bills would raise taxes on many low- and middle-income families in every state and provide the wealthiest Americans and foreign investors substantial tax cuts, while adding more than $1.4 trillion to the deficit over ten years. National and 50-State data available to download.

The tax bill reported out of the Senate Finance Committee on Nov. 16 would raise taxes on at least 29 percent of Americans and cause the populations of 19 states to pay more in federal taxes in 2027 than they do today.

The Senate tax bill released last week would raise taxes on some families while bestowing immense benefits on wealthy Americans and foreign investors. In South Dakota, 54 percent of the federal tax cuts would go to the richest 5 percent of residents, and 5 percent of households would face a tax increase, once the bill is fully implemented.

Internet sales tax fairness efforts gained momentum this week as most states joined together to encourage the US Supreme Court to allow them to collect taxes on online sales. Meanwhile, Montana lawmakers will enter special session next week to plug their revenue shortfall, Mississippi's (self-inflicted) revenue crunch is reaching unprecedented severity, and misguided corporate tax subsidies got mainstream attention from HBO's John Oliver and Rolling Stone.

The Tax Cuts and Jobs Act, which was introduced on Nov. 2 in the House of Representatives, would raise taxes on some Americans and cut taxes on others while also providing significant savings to foreign investors.

The Tax Cuts and Jobs Act, which was introduced on November 2 in the House of Representatives, includes some provisions that raise taxes and some that cut taxes, so the net effect for any particular family’s federal tax bill depends on their situation. Some of the provisions that benefit the middle class — like lower tax rates, an increased standard deduction, and a $300 tax credit for each adult in a household — are designed to expire or become less generous over time. Some of the provisions that benefit the wealthy, such as the reduction and eventual repeal of the estate…

Lawmakers who support reducing or eliminating state personal income taxes typically claim that doing so will spur economic growth. Often, this claim is accompanied by the assertion that states without income taxes are booming, and that their success could be replicated by any state that abandons its income tax. To help evaluate these arguments, this study compares the economic performance of the nine states without broad-based personal income taxes to their mirror opposites—the nine states levying the highest top marginal personal income tax rates throughout the last decade.

This week in state tax news saw Alaska begin yet another special session, Louisiana lawmakers holding meetings to begin preparing for the state’s looming (self-imposed) fiscal cliff, and Alabama policymakers beginning a study of school finance (in)adequacy and (in)equity. Meanwhile, state revenue performance is poor well into 2017 in many states, though Montana, Nevada, and Oregon are all enjoying modest but welcome revenue bumps from legalized marijuana.

For some lawmakers, annual deficits matter a lot—unless the nation is paying for tax cuts for the wealthy via deficit spending. Last night, Republican lawmakers demonstrated that previous grandstanding about the nation’s debt is much ado about nothing. The Senate approved a budget resolution on a party-line vote  that would 1. fast-track legislation adding $1.5 trillion to the deficit over 10 years by cutting taxes, and 2. make it easy to enact this measure without a single Democratic vote.

The “tax reform framework” released by the Trump administration and Congressional Republican leaders on September 27 would affect states differently, but every state would see its richest residents grow richer if it is enacted. In all but a handful of states, at least half of the tax cuts would flow to the richest one percent of residents if the framework took effect.

The “tax reform framework” released by the Trump administration and congressional Republican leaders on September 27 would not benefit everyone in South Dakota equally. The richest one percent of South Dakota residents would receive 62.4 percent of the tax cuts within the state under the framework in 2018. These households are projected to have an income of at least $589,600 next year. The framework would provide them an average tax cut of $129,120 in 2018, which would increase their income by an average of 7.3 percent.

Last week, Wisconsin leaders finally came to agreement on a state budget, while their peers in Connecticut appear to be close behind them. Iowa lawmakers avoided a special session with a short-term fix and will have to return to their structural deficit issues next session, as will those in Louisiana who will face a $1 billion shortfall. Meanwhile, District of Columbia leaders have already resumed meeting and discussing tax and budget issues there.

This week, Pennsylvania lawmakers risk defaulting on payments due to their extremely overdue budget and Illinois legislators will borrow billions to start paying their backlog of unpaid bills. Governing delves into why there were more such budget impasses this year than in any year in recent memory. And Oklahoma got closure from its Supreme Court on whether closing special tax exemptions counts as "raising taxes" (it doesn't).