Archive for the ‘State & Local Issues’ Category

Making State and Local Taxes “Friendly” to Small Businesses

Small business owners are more concerned with the complexity of state and local tax laws than with the amount of tax they pay, according to a recent survey conducted by Thumbtack.com in partnership with the Ewing Marion Kaufman Foundation. Aside from economic conditions, small business owners’ perception of the ease of compliance with licensing, regulatory, […]

Ohio Lawmakers Turn A Surprise Surplus Into A Huge Tax Cut

What does a state do when faced with a 14 percent decline in income tax collections, much of it due to past tax cuts? Why, it cuts taxes even more—especially when that fall in revenues is lower than expected and—combined with lower spending — results in a surprising $700 million budget surplus. That seems to […]

Are Domestic Partnerships A Way For Heterosexual Couples To Avoid The Marriage Tax Penalty?

In their zeal to provide a legal alternative to banned marriage for same-sex couples, some states may have created a new tax shelter for heterosexual couples. By choosing domestic partnership or civil union over marriage, opposite-sex couples are able to avoid paying a federal income tax marriage penalty, just as same-sex couples can. Over the […]

Retailers That Collect Online Sales Tax Lose Business

Online retailers have argued for years that they’ll lose business if they have to collect sales taxes on their online transactions. A new study by three researchers at Ohio State finds they are right. Paradoxically, the study may increase support by some online sellers for federal legislation to standardize collections across states. The study, by […]

An EPA-Sanctioned State-Based Carbon Tax Could Reduce Emissions and Improve State Finances

The U.S. Environmental Protection Agency (EPA) is developing a proposed rule due out in June that could allow states to use carbon excise taxes or fees to limit the one-third of U.S. greenhouse gas emissions that come from power plants. The tax approach, one of several options EPA could offer states, could provide an important […]

Washington DC’s Tax Revision Commission Plan

Last year, I had the privilege of serving on the District of Columbia’s Tax Revision Commission, chaired by former mayor Tony Williams. On Monday, the Tax Policy Center will host a panel to discuss our broad-based effort to rework DC’s often unwieldy revenue system. To prepare, I looked more closely at how the personal income […]

A Terrible Response to the Internet Tax Mess

Ten months ago the Senate overwhelmingly passed legislation aimed at sorting out the mess over online sales taxes, which consumers owe but states rarely collect. Now, House GOP leaders are floating what they call a compromise:  Set national rules for sales tax collection based on the location of the seller, not the buyer.  It is […]

Stark Variation in Taxpayer Use of Itemized Deductions, County by County

Taxpayer use of itemized deductions varies widely by location, according to a new analysis of 2007 IRS data. In about one in ten counties, 11 percent or fewer taxpayers itemize while in another 10 percent at least 38 percent of taxpayers claim deductions. In a handful of counties, more than half of taxpayers itemize. In […]

Camp Tax Reform Would Create New Challenges for States

House Ways and Means Chair Dave Camp’s recent tax reform plan would raise the cost of doing business for many state and local governments. Camp would repeal the deductibility of state and local taxes, including both property taxes and income taxes. He’d abolish tax-exempt private activity bonds. And he’d impose a 10 percent surtax on municipal […]

How To Fix Washington, DC’s Tax System

An advisory commission has recommended some interesting changes to the District of Columbia’s tax system. The commission’s proposals may provide some useful lessons for other states looking to reform their tax codes. In some ways, of course, DC is unique. While it is a city, it functions much like a state. However, because of its […]