2018 State Tax Actions

12/17/2018

Preface and Acknowledgments

state tax actions 2018 ncsl report State Tax Actions 2018 presents information about the tax and revenue changes enacted by state legislatures during the 2018 calendar year. It also contains the results of tax measures that were voted on during any 2018 elections and special sessions. In addition to aggregate state tax information, the report contains detailed information on 50 states.

Information included in this report was collected through surveys in 2018; additional developments may have taken place by the time of publication. The reported changes generally take effect in fiscal year (FY) 2019. For 46 states, the fiscal year begins July 1 and ends June 30. Exceptions are Alabama and Michigan, where fiscal years begin in October and end in September; Texas, September to August; and New York, April to March.

This annual report is a cooperative effort of the National Association of Legislative Fiscal Offices (NALFO) and the National Conference of State Legislatures’ (NCSL) Fiscal Affairs Program. Without the advice, expertise and timely assistance of legislative fiscal staff from around the country, the report would not be possible.

Defining and Measuring Tax Changes

Organizations that measure state tax and revenue changes often report different numbers, resulting in confusion about the true magnitude of state tax increases or reductions.

Calculating state tax changes is complicated because there are two distinct ways changes may be counted.

One method—the “baseline” method—includes the effect of all statutory tax law changes adopted in the current legislative session. Under this method, only statutory tax law changes adopted in the 2018 legislative sessions are included.

The second method—the “taxpayer liability” method—measures the effect of tax changes on taxpayers and the economy, without regard to when statutory changes were adopted. Under this method, a state that makes a multi-year tax rate reduction would be credited with a tax reduction in each fiscal year during which the tax rate falls.

NCSL uses the taxpayer liability method, which excludes extensions of scheduled sunsets or other changes that are anticipated under current law because they pose no immediate tax change to the taxpayer.