March 16, 2012
States Allow Tax Cuts to Expire
NCSL grabbed headlines in September by noting that for the first time in a decade, states reported that they cut taxes more than they increased them. But what looked like a cut on many ledgers were actually temporary tax increases that were allowed to expire in several different tax categories.
The National Conference of State Legislatures has released its full version of the 2011 “State Tax Actions” report. The new report provides details on the changes in tax policy that took place during 2011 legislative sessions that will affect revenue collections in FY 2012.
The “State Tax Actions” shows sales taxes experienced the largest cuts, at what was projected to be more than $5.2 billion. This is primarily because temporary sales tax increases in California and North Carolina expired. States also cut corporate income taxes and miscellaneous taxes. Many of these reductions also were the result of allowing temporary tax increases to expire. In 2011, states cut nearly $2 billion in taxes.
NCSL’s “State Tax Actions” report includes extensive information on:
- Personal income taxes (net increase: $2,995 billion)
- Corporate and business taxes (net decrease: $805 million)
- Sales and use tax (net decrease: $5,245 billion)
- Health care provider and industry taxes (net increase: $1,956 billion)
- Tobacco, alcohol and motor fuel taxes (net increase $51.9 million)
- Fees and other non-tax changes (net increase $1,186 billion).
This NCSL report continues NCSL's long tradition of providing accurate, comprehensive and nonpartisan data on state finances.
Credentialed members of the media may request a free full copy of NCSL's “State Tax Actions” report on our website.
NCSL is a bipartisan organization that serves the legislators and staffs of the states, commonwealths and territories. It provides research, technical assistance and opportunities for policymakers to exchange ideas on the most pressing state issues and is an effective and respected advocate for the interests of the states in the American federal system.