March 9, 2022
The GEORGIA House of Representatives passed a $1 billion income tax cut bill that likely force major spending cuts.
A bill reducing the individual income tax rate from 3.23 to 2.9 percent over seven years is heading to INDIANA Gov. Eric Holcomb’s desk. The bill also reduces taxes on utility companies by $220 million but requires companies to pass savings on to consumers. Together the cuts will reduce state revenue by $1.1 billion once fully phased in.
Major State Tax Proposals and Developments
KENTUCKY House lawmakers have passed a bill reducing their flat individual income tax from 5 to 4 percent. The bill includes triggers that could eventually phase out Kentucky’s income tax entirely.
NEW MEXICO Gov. Michelle Lujan Grisham officially signed House Bill 163 into law. The bill, among other things, slightly reduces the state’s gross receipts tax, creates a new Child Tax Credit of up to $175 per child based on income, and provides one-time rebates of $250 to single filers earning under $75,000 and $500 to couples earning less than $150,000.
OKLAHOMA House Republicans, led by Speaker of the House Charles McCall, released a slew of tax proposals that included a one-time tax rebate of $125 for single filers ($250 for joint filers), income tax rate reductions of 0.25 percentage points in each bracket, suspension of the grocery sales tax for two years, enhancement of the grocery sales tax credit, and an eight-year phaseout of the corporate income tax.
Governors’ Annual Addresses and State of State Speeches
CALIFORNIA Gov. Gavin Newsom’s State of the State address rejected calls to suspend gas taxes and increase drilling, focusing instead on direct tax rebates as a more targeted way to help struggling families and workers.
NEW JERSEY Gov. Phil Murphy proposed a new property tax relief program during his Fiscal Year 2023 budget address yesterday.
State Tax Roundup
ALASKA‘s House majority caucus has proposed payments of $1,300 to residents to provide relief for inflation, the increasing cost of fuel, and the COVID-19 pandemic. The plan has the support of Gov. Mike Dunleavy and would come in addition to the annual permanent fund dividends.
ARIZONA gubernatorial candidate Katie Hobbs is calling for several new tax exemptions and credits, including a child tax credit that would allow families with incomes of up to $100,000 get $250 per child each month. Hobbs estimates that this would apply to about 600,000 children.
CALIFORNIA could attempt to rein in rising housing costs by taxing “house flippers” at 25 percent of profits if they buy and sell within three years.
CONNECTICUT, the finance committee is planning to make final recommendations in about a month. Recent discussions have included a mansion tax and a surcharge on capital gains income for very-high-income households, though Gov. Ned Lamont is opposed. Lamont is focusing on his proposal to raise an existing property tax credit and reduce local car taxes. Also on the table are sales and restaurant tax cuts.
A bill out of IDAHO that would raise the state sales tax to the highest in the nation (7.85 percent) and eliminate most property taxes on owner-occupied homes was recently introduced in the House. The bill would also increase the grocery tax credit to $175 for all filers.
The WEST VIRGINIA House passed a state budget proposal that includes 10 percent income tax cuts and reinstates the film tax credit. The House budget now heads back to the Senate.
WISCONSIN Gov. Tony Evers signed two bills that allowed taxpayers reporting capital losses to pay lower taxes. The first bill is targeted to restaurant owners and is expected to reduce their taxes by $27 million. The second bill increases the amount filers can claim in net capital loss deductions.
During a special session, Republican lawmakers in WISCONSIN officially rejected Gov. Tony Evers’ plan to provide one-time $150 payments to residents of the state.
MAINE businesses came together to urge state lawmakers to vote against a bill that would suspend the state’s gas tax through the end of 2022. Those who signed on to the joint news release cited the vital need for those funds to fix roads and support transportation projects.
NEW YORK Gov. Kathy Hochul is smartly skeptical about calls for a gas tax holiday, reviewing the issue to ensure any action the state takes is meaningful.
PENNSYLVANIA legislators have introduced a bill that would create a refundable state earned income tax credit (EITC) that would reach 25 percent of the federal credit by 2031.
Legislators in SOUTH CAROLINA are considering $100 rebate checks to tax filers as part of their tax cut package.
TENNESSEE lawmakers have called on Gov. Bill Lee to declare a moratorium on the state gas tax.
The SOUTH DAKOTA Senate refused to act on a bipartisan bill that would have repealed sales tax on food after Senate GOP leadership declined to move the bill forward.
Gov. Phil Scott called on legislators to support his proposal to provide a $250- $275 rebate check to property taxpayers in VERMONT. The proposal would provide the same rebate to each taxpayer, regardless of the individual’s property tax value.
WASHINGTON lawmakers abandoned a proposed fuel export tax after neighboring states strongly objected.
Ashmore Consulting is your trusted resource for tax credits, incentives & strategic location services. Reach out today to speak to a trusted advisor.
The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ashmore Consulting LLC to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader’s specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact Ashmore Consulting LLC or other tax professional prior to taking any action based upon this information. Ashmore Consulting LLC assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.