Idaho moved to a flat rate of 5.8%, down from its former top marginal rate of 6%.Īnd Mississippi enacted a flat tax rate of 5%. Arizona implemented its 2.5% rate a year earlier than anticipated. New Hampshire lowered its rate only on interest and dividends income.Īrizona, Idaho and Mississippi converted to flat taxes from graduated rates. Individual income taxes: Ten states, including Arizona, Idaho, Indiana, Iowa, Kentucky, Mississippi, Missouri, Nebraska, New York and North Carolina, reduced individual income tax rates for 2023, according to the Tax Foundation. “States that have reduced their tax rates are going to have to face a more severe reduction in that (revenue) growth than other states,” said Emily Mandel, an economist with Moody’s Analytics. One state, Massachusetts, added a millionaire tax.Īnd while states have built up sizable rainy day funds to cushion them in an economic downturn, some could start feeling squeezed if their revenues soften. However, several states increased certain levies, including those on gas, electric vehicles and recreational marijuana, for 2023. Some states have showered this largesse on residents through one-time measures, such as tax rebates or holidays, while others have adopted permanent tax reductions. This has fueled increases in income and sales tax revenues and left many states with large surpluses. States have benefited from solid economic growth and federal Covid-19 relief funds flowing to them, their residents and their businesses. “We are seeing the culmination of two years of substantial tax cutting across the country, in response to historically high revenues and a desire for states to remain competitive in a much more mobile environment,” said Jared Walczak, the foundation’s vice president of state projects.
They have lowered individual and corporate income tax rates, exempted more products from sales taxes and reduced the amount of retirement or military pension income subject to taxation. Some 38 states had noteworthy alterations – mostly net tax reductions – take effect on January 1, according to the right-leaning Tax Foundation.
States are kicking off 2023 with a bevy of tax changes for their residents and businesses.
0 kommentar(er)
