Obscure Tax Provision of Federal Recovery Package Could Widen State Budget Gaps

Source: Michael Mazerov, Center on Budget and Policy Priorities, May 19, 2009

States could lose up to $5.5 billion in business income tax revenues over the next three years as a result of a little-known provision in the federal economic recovery package enacted in February. States can, however, easily avoid this revenue loss by making offsetting changes in their tax laws. For states to allow this unnecessary revenue loss makes little sense given their current fiscal conditions.

Leave a Reply