Proposals Under Consideration in 2014 Legislative Sessions
Building on the interest in tax changes that was prominent in 2013, a spring 2014 survey of legislative fiscal offices found that 23 states reported significant tax change measures were being discussed in 2014 legislative sessions. In general, these tax change proposals include personal and corporate income tax reductions and providing tax credits for targeted industries. Examples of tax changes that have been enacted or are still under consideration include:
- Lawmakers in Missouri and Oklahoma passed personal income tax rate reductions that are contingent upon each state meeting future revenue growth targets.
- Indiana enacted legislation that phases down the corporate income and financial institutions tax rates. The corporate income tax rate will be reduced from 6.5 percent in fiscal year (FY) 2016 to 4.9 percent beginning in FY 2022; and the financial institutions tax rate will be reduced from 6.5 percent in calendar year (CY) 2018 to 4.9 percent beginning in CY 2023.
- Lawmakers in New York included several tax changes in the enacted budget, including a 20 percent property tax credit for manufacturers.
- Arizona lawmakers added a sales tax exemption for manufacturers’ electricity purchases.
- California lawmakers are considering a proposal to increase the motion picture tax credit and to make the credit permanent.
- Numerous tax changes are under discussion in Illinois as temporary tax increases are set to expire in 2015.
- Michigan is considering several bills that would reduce the income tax as well as reinstate a variety of credits, exemptions and deductions that were repealed in a 2011 tax reform package.
- Nevada did not have a regular legislative session in 2014, however, voters will decide on a ballot measure that would create a new business tax at a rate of 2 percent of the taxable margin for businesses with more than $1 million in total revenue. If approved by voters, it becomes effective in 2015.
The following table provides more information on state tax changes under consideration in 2014 legislative sessions.
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