April 20, 2022
Major State Tax Proposals/Developments
The KENTUCKY General Assembly has handily overridden Gov. Andy Beshear’s veto of House Bill 8. Among other things, the bill will lower the state’s flat income tax from 5 to 4 percent over the next two years and includes triggers to lower the rate further.
MAINE Gov. Janet Mills signed the supplemental budget into law. The budget includes one-time payments of $850 for single filers earning less than $100,000, heads of household earning less than $150,000, and joint filers earning less than $200,000. The bill includes changes that will double the earned income tax credit and expand the property tax fairness credit.
An IDAHO initiative that would increase income taxes on top earners to help fund education services has surpassed the required vote threshold, qualifying it for the November ballot. The initiative, specifically, would create a new top tax bracket of 10.925 percent for single filers earning over $250,000 and joint filers earning over $500,000, and increase the corporate income tax from 6 percent to 8 percent – the level it was from 1987 to 2000.
State Roundup
CALIFORNIA lawmakers are discussing three targeted progressive tax proposals. A proposed increase to the existing renter’s credit has advanced from committee, a one-time child tax credit of $2,000 for families with income below $30,000 is also on the table, and negotiations are ongoing to better target Gov. Gavin Newsom’s proposed gas tax rebate.
DELAWARE Gov. John Carney signed legislation that will send $300 in direct payments to every resident who filed a 2020 tax return. This is expected to cost the state $2 to $3 million.
MARYLAND lawmakers decided against extending the 30-day gas tax holiday that ended this past Sunday.
The city of Ann Arbor, MICHIGAN, is receiving $1.4 million in marijuana tax revenue this year. City leaders are discussing how to spend the money and have proposed numerous programs for low-income residents that would improve housing conditions, the affordability of utilities and school supplies and apprenticeship programs for city public works jobs.
The MISSOURI House Budget committee has approved a $1 billion tax break that would provide a non-refundable rebate of $500 for single filers and $1,000 for married filers.
MONTANA lawmakers on both sides of the aisle voted unanimously to oppose a proposed constitutional initiative that would impose strict caps on property taxes. Supporters of the initiative, however, still have until June 17 to collect 60,000 signatures to get the measure on the 2022 ballot.
NEW JERSEY lawmakers are also debating gas tax relief and rebates. A new bill, with a price tag of roughly $1.9 billion, would offer $500 rebates to joint filers making up to $250,000 and $250 for single filers. Another bill would lower the state gas tax for 60 days.
The NEW HAMPSHIRE Senate will vote on a proposal to lower the business profits tax rate by a point to 7.5 percent tomorrow. The bill is expected to pass.
At his final budget address, PENNSYLVANIA Gov. Tom Wolf proposed cutting the 9.99 percent corporate net income tax (CNIT) to 7.99 percent in 2023 and decreasing it each year until it reaches 4.99 percent. Last week, the Senate Finance Committee held a hearing about expanding the state film tax credit program. Lastly, a new bill would cut the gas tax by one-third through the end of the year.
VIRGINIA lawmakers continue to work on a two-year state budget during the special session and debate key issues like gas tax holidays and lowering the grocery tax. The House Finance Committee advanced Gov. Youngkin’s gas tax holiday proposal over the gas tax rebate proposed by House Democrats.
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