State Tax Actions 2016

Source: National Conference of State Legislatures, Special Fiscal Report, 2017

From the overview:
Following the same trend as in 2015, this past year saw net reductions in personal and corporate income taxes and increases across most other tax categories. This is a result of a continued phase-in of major tax reduction packages passed during previous legislative sessions. Increases in sales and use, health, tobacco, and motor-fuel-related taxes led to a $2.3 billion revenue increase across all reporting states. Illinois did not enact a FY 2017 budget during the 2016 legislative session, and some states—such as Texas, Montana and Nevada, where the legislature only convenes biennially—did not have significant tax changes to report.

This report includes tax actions taken during regular and special legislative sessions in 2016, as well as actions approved by voters during the November 2016 general election. Fifty states provided information, which was obtained through a survey of the National Association of Legislative Fiscal Offices.

Highlights include:
– Collective actions taken by the 50 states resulted in a net tax increase of $2.3 billion, representing 0.3 percent of the prior year’s tax collections. This compares to relatively little activity in 2015 and a $3.1 billion, or 0.4 percent, decrease in 2014.
– Illinois did not enact a FY 2017 budget during the 2016 legislative session, but Pennsylvania, which did not enact a budget during the 2015 legislative session, passed an extensive tax package in 2016, increasing net tax revenue for the state by $633 million, or 1.9 percent.
– Across the nation, the multiyear trend of lowering personal and corporate income taxes continues. Tax increases included motor fuel taxes to fund state infrastructure projects, substantial sales tax increases in two states, increased health care provider taxes to offset insurance costs and tax increases on many tobacco products.
– Of the 50 reporting states, five—Georgia, Indiana, Mississippi, New Mexico and Wisconsin—reduced net taxes by more than 1 percent. There were six states—Louisiana, New Jersey, Oklahoma, Pennsylvania, South Dakota and West Virginia—that reported a net tax increase of more than 1 percent. Thirty-nine states made no significant net tax changes in 2016. see Figure 2 above.
– In addition to tax changes, states approved nontax revenue changes, including fee increases or decreases, revenue accelerations or decelerations, and tax compliance initiatives for a net increase of $426 million. This resulted in a combined total revenue increase of about $2.8 billion in 2016.
Related:
Executive summary