Spring brings more tax events – ITEP

.ITEP Staff

Spring is right around the corner, and like those pesky allergies that come with it, equally pesky tax proposals keep popping up across states across the United States. The Governor’s signing of a Gasoline Tax Vacation in Georgia makes our eyes gush and itch a bit, especially after we explained last week how these plans often fail to produce meaningful relief. The sound of us trying to clear our throats could also be confused with us trying to draw attention to House and Senate bills in Oklahoma which include discounts that will primarily benefit those at the top. And Iowa gives us a complete headache, after Senate Republicans proposed a constitutional amendment that requires a supermajority to raise taxes in the future, but only a simple majority for tax cuts. Fortunately, Michigan relieves some of the pain, as the governor recently made the sensible decision to veto a major tax cut that would have lowered the income tax rate and suspended the gas tax.

Major State Tax Proposals and Developments

  • A MAINE A bill that would limit the ability of big-box retailers to mount legal challenges to the “black store theory” has now passed the Senate in addition to the House. The bill would require cities to base their property assessments on the highest and best use. – AIDAN DAVIS
  • MICHIGAN Governor Gretchen Whitmer vetoed a $2.5 billion tax cut bill that would have lowered the state’s flat tax rate from 4.25 percent to 3.9 percent, saying that A substantial tax cut would either lead to future tax hikes or painful cuts that would hurt families. line. Governor Whitmer also intends to veto a suspension of Michigan’s 27-cent gas tax, but is open to a temporary reduction or suspension of the 6-cent sales tax. % on gasoline. –NEVA BUTKUS
  • Legislators from both houses of OKLAHOMA the legislature passed a mix of untargeted, mostly very heavy tax cuts. The Senate has passed a bill that would suspend the business franchise tax beginning with the 2023 tax year and beyond. It is estimated to decrease revenue by $57.2 million in fiscal year 2024. During that time, the House has passed a handful of bills that would cut taxes by about $500 million. A bill would suspend the state sales tax on groceries for two years. Another would reduce all tax brackets by 0.25%. They also passed a joint House resolution proposing a constitutional amendment that would freeze property tax assessments on households whose owners are 65 and older. – BRAKEYSHIA SAMMS

State Overview

  • CONNECTICUTThe tax debates are getting worse. Gov. Ned Lamont still prioritizes tax relief on property and car taxes, while others continue to push to create or strengthen targeted refundable credits. Unfortunately, an ill-advised gas tax holiday has swept through the Legislature and is likely to pass, which will reduce the revenue available for these priorities.
  • GEORGIA Governor Brian Kemp has signed a temporary gas tax exemption bill that will suspend the gas tax until the end of May. And the costly and regressive tax cut bill proposed by the House is still before the Senate.
  • In HAWAII there is a bill to exempt diapers, food and drugs from their general excise tax.
  • After cutting nearly $2 billion in taxes this legislative session, IOWA Senate Republicans are proposing a constitutional amendment that would require a supermajority to raise future taxes while preserving a simple majority for future cuts.
  • the MISSISSIPPI House released a new income tax cut proposal that would phase out personal income tax by $100 million a year over eighteen years. Senate leaders and Lt. Governor Delbert Hosemann oppose the House plan that would use a temporary surplus for permanent cuts.
  • Members of the House in MISSOURI considered several consumption tax changes, including a six-month gas tax exemption and legislation that would permanently exempt diapers and feminine hygiene products from state sales tax .
  • Advocates of sound fiscal policy in NEBRASKA has successfully blocked the regressive income tax cut backed by Gov. Pete Ricketts for now, but proponents of the tax cut for high-income households have already amended it in another bill that the whole legislature will soon consider.
  • As an alternative to the gasoline tax suspensions discussed in other states, NEW HAMPSHIRE Lawmakers are considering a $40 million proposal to reduce vehicle registration fees for any vehicle or trailer registered between July 2021 and June 2022.
  • NEW MEXICO Governor Michelle Lujan Grisham and legislative leaders announced a special session beginning April 5. They will consider a “junior” spending bill that will include relief for residents facing rising cost of goods. Details of the plan have yet to be released.
  • A coalition of NEW YORK Advocates recently came together to continue pushing for improvements to the Empire State Child Tax Credit, such as including children under 4 and increasing the value of the credit.
  • A OREGON An audit of the state’s $1.1 billion mortgage interest deduction found it had inequitable effects, mostly benefiting wealthy, white homeowners, and was not sufficiently assessed to determine whether it was achieving its political goals.
  • OREGON lawmakers passed a one-time $600 payment to EITC recipients, a refreshing alternative to the inefficient gasoline tax holidays and untargeted rebates being considered in many other states.
  • A bill proposed in PENNSYLVANIA could make it harder to pass tax increases by allowing voters to undo changes on the ballot; if voters reject a tax, the General Assembly could overturn the referendum by a two-thirds vote.
  • WEST VIRGINIA Governor Jim Justice signed a budget bill, vetoing a provision that would have set aside $265 million for future income tax cuts. But the state’s legislative session may not be over as some state Democrats have called for a special session to suspend the state’s gas tax.

What we read

  • Governing (rightly) casts water on the idea that states that make deep and permanent tax cuts will benefit, noting that the cuts can worsen inflation and undermine prospects for sustainable budgets in the future.
  • New York Times Columnist Peter Coy explains in an opinion piece that there are better ways to help those affected by increases at the pump than suspending the gas tax, such as providing direct relief to residents.
  • the Center for the Study of Social Policy conducted interviews with 15 Michigan families of color with incomes below $55,000 to better understand the impact federal child tax credit extensions have had on their lives.

If you like what you see in the recap (or even if you don’t), please send comments or tips for future posts to Aidan Davis at [email protected]. Click here to sign up to receive the summary by email.


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