Unless you’ve been living under a rock, you know it’s tax time. This season, while you’re gathering up your papers and receipts and your W-2s, DailyFinance is reporting that eight states either already have passed or could soon be passing changes to their state income tax codes.
In the sunny state of California, the approval of Proposition 30 ushered in two different tax increases. The first is a quarter-percentage-point increase in sales tax, along with an income-tax increase for taxpayers who file as single and make more than $250,000, and for joint filers making $500,000 or more. An additional 1 to 3 percentage points will be added to the existing top tax bracket through 2018.
This year the top tax bracket has been reduced from 6.45% to 4.9% in Kansas. The law also eliminates income taxes on small business income for hundreds of thousands of businesses.
Although it hasn’t passed yet, Governor Bobby Jindal’s tax swap would get rid of the state’s income and corporate taxes in exchange for higher sales taxes.
In a law effective for the 2012 tax year, new tax rates on high-income residents means higher taxes for single filers making more than $100,000 and for joint filers making $150,000 or more.
A proposed new tax plan for the state would boost the income tax rate one percentage point to 6.25% but lower sales taxes from 6.25% to 4.5%.
Governor Mark Dayton of Minnesota is attempting to raise the state income tax rate in order to lower sales and property taxes. The lack of support Gov. Dayton has received for his proposal has many thinking he’ll drop parts, if not all, of his tax reform plan.
The great state of Nebraska would like to get rid of its income tax entirely, thank you very much. Gov. Dave Heineman has said he would scale back sales-tax exemptions to finance the reduction in income-tax.
In North Carolina, legislators would also like to see the state’s income tax eliminated in order to keep them competitive for individuals and businesses that may be looking to relocate.