ITEP State Rundown

All eyes in statehouses in recent weeks have been on federal budget negotiations, and now that the “megabill” has passed, they are focused in on their own budgets in search of ways to cope with the enormous consequences coming their way. All states will see fewer federal dollars flowing through their coffers, higher needs due […]

The last states are wrapping up legislative sessions, and some are crossing the finish line with major income tax cuts.

Many states are reaching their end-of-June budget deadlines, and major tax policy changes look to have big implications as states are forced, per federal policy, to do more with less.

As state legislative sessions come to a close, decisions on tax policy are being made. Several southern states have cut taxes, while the northeast is making some more measured reforms.

State legislatures are enjoying a relatively quiet period right now, though it is merely a temporary calm before the storm of the federal tax and budget debate begins raging again.

States use the final hours of their legislative sessions to address deficits and preserve revenue in preparation for the times ahead.

As a sprawling, regressive tax bill continues to take shape at the federal level, many states are moving forward with major tax cut proposals of their own.

Even as most major headlines have been about the ever-changing landscape of federal tax policy, the latest “ideas of the week," and now the House tax bill, state tax policy continues to be a priority for lawmakers.

The rampant uncertainty this year extends far beyond the national economy and federal policy, as many state legislatures are declaring their tax and budget debates finished, and just getting started, sometimes in the same breath.

While some states are preparing for uncertainty – slowing revenue growth, chaos from unpredictable tariffs, cuts to federal programs, etc. – others continue to move forward with plans for deep tax cuts.   For instance, Georgia Gov. Brian Kemp signed legislation accelerating the cut to the personal income tax rate, which is currently phasing down. […]

While students and families are enjoying spring break vacations, legislative sessions are still in full swing. And some are poised for a spring tax break season as proposals advance with major implications for the sustainability of state budgets.  

Residents and state lawmakers across the country are pushing back against anti-tax measures and are looking for ways to protect revenue and advance proposals that would raise revenue in progressive ways. This comes at a time when federal policy brings significant risks for state tax revenue.

While all eyes are on the Trump administration’s tariffs on foreign imports, state lawmakers are moving forward with a mix of deep, regressive tax cuts and progressive revenue raisers.

State lawmakers around the country are navigating a range of potential hazards this week. Leaders in Maryland and Washington are facing budget holes but are smartly working to get out of them through progressive taxes on those with the most ability to pay. Both North Dakota and Washington state are looking to fill literal potholes […]

March Madness kicks off today and the pressure is on as many states’ legislative sessions are nearing the final buzzer. Some state lawmakers are seemingly competing for the title of most regressive state tax policies while others are looking to lift up best practices for more equitable outcomes.   The Mississippi legislature landed on a […]

A bevy of tax cut proposals sprung to life this week while others were signed into law. In Kentucky, lawmakers are working to make it easier for the legislature to enact income and business tax cuts. The governor in Idaho signed into law a personal and corporate income tax cut.

Proposals from governors in both New Jersey and Wisconsin include provisions to tax high-income earners. Meanwhile, several major tax proposals are advancing in the great plains, with Iowa considering a major cut to unemployment taxes, North Dakota advancing new benefits for private schools, and Wyoming cutting property taxes. The District of Columbia is facing a more than a $1 billion revenue shortfall over the next three years, compared to previous estimates, and a mild recession due in large part to the layoffs of federal workers. 

States would be wise to keep a close eye on happenings in Washington, D.C. Republicans in the House of Representatives recently passed their budget resolution, which could spell trouble for state budgets. The plan tees up major cuts to Medicaid, SNAP, and college tuition assistance—all likely to allow for tax cuts that will overwhelmingly benefit the wealthy. If approved, trillions of dollars would be cut from programs supported by federal dollars and states and localities could bear the brunt of those shifting costs. Many states are already facing delicate fiscal outlooks and those considering cutting taxes further should seriously reconsider.…

A new ITEP report finds that states could raise $19 billion a year with one policy change targeting corporate tax avoidance. That policy, worldwide combined reporting, strengthens state corporate taxation by giving states a full view of multinational corporate profits, essentially eliminating the tax savings that companies currently see by pretending their profits were earned in Switzerland, the Cayman Islands, and other international tax havens.

Tax policy proposals are a hot topic of conversation across the country. Both North and South Dakota are considering property taxes cuts, while proposed cuts in Florida, Mississippi, and Texas are percolating. Meanwhile, fiscal conditions are tight in states like Alaska, Tennessee, Oklahoma, and West Virginia. None are on the cusp of passing new revenue, but years of recent tax cuts and inflation have caught up to states and many lawmakers have revenue gaps to close. 

Tax changes have been proposed or are nearing the finish line in many states. Kentucky is poised to enact an income tax cut as a bill heads to the governor’s desk. In Pennsylvania, Gov. Josh Shapiro’s budget proposal called to accelerate existing corporate tax cuts while closing corporate tax loopholes by enacting combined reporting. Ohio Gov. Mike DeWine proposed a new credit for children of working parents. And Virginia Democrats countered Gov. Glenn Youngkin’s proposed tax cuts with a plan of their own that includes an increase to the state’s Earned Income Tax Credit (EITC) and a one-time, nonrefundable tax…

More details on this year’s batch of major tax proposals are emerging from statehouses - and some revenue cuts look like they could be steep. A governor-backed and House-passed plan in Mississippi would phase out the personal income tax, while a recent tax cut proposal out of Idaho is anchored by a $253 million dollar income tax cut.  

As state legislative sessions ramp up many lawmakers discuss their prioritization of affordability of necessities like food and housing as they craft their legislative agendas. Arkansas, Mississippi and Utah are looking to reduce or fully exempt groceries from their state sales taxes. Meanwhile, multiple proposals to reduce property taxes are making their way around state […]

While frigid temperatures expected across a large swath of the country, major tax proposals are heating up in the states. Governors are giving their State of the State addresses and state lawmakers have begun to convene for 2025. New York Gov. Kathy Hochul announced plans to expand the state’s Child Tax Credit earlier this year and has since announced nearly $1 billion in income tax cuts. Maryland Gov. Wes Moore unveiled a new tax proposal aimed at helping close the state’s looming revenue shortfall. The plan would increase taxes on the wealthy and cut taxes for many low- and middle-income…

It’s a new year, and state legislatures across the country are resolved to write new tax policy. Tax debates are heating up nearly everywhere in the early days of 2025, but states’ fiscal situations vary dramatically. New York is considering expanding the state’s Child Tax Credit following Gov. Hochul’s proposed expansion. On the other side […]