Building on the interest in tax reform that was prominent in 2013, a few more states restructured taxes during 2014 legislative sessions. Although, the widespread enthusiasm for reform that surfaced last year was missing. Only six states—Michigan, New Mexico, New York, Oklahoma, Rhode Island and Wisconsin—and the District of Columbia reported major tax reforms in 2014 (compared to 13 in 2013). However, what constitutes tax reform varies significantly by state. And in some states, such as Arizona, California, Indiana, Maryland and Ohio, previously enacted reforms take effect this year.
This report includes tax actions taken during regular and special legislative sessions in 2014, as well as actions approved by voters. Fifty states and the District of Columbia provided information, which was obtained through the National Association of Legislative Fiscal Offices. Highlights include the following:
- Despite a fair amount of tax activity in 2014, the net revenue change is minimal. The aggregate tax change for the reporting states is a net reduction of just over $3.1 billion, or a change of 0.4 percent when compared to the previous year’s tax collections.
- Across the nation, tax cuts continue to focus on lowering personal and corporate income taxes. Tax increases occurred in three categories: health care provider taxes to offset insurance costs, motor fuel taxes to help with transportation costs and miscellaneous taxes, which includes a variety of different tax changes.