State Tax

In California, where state officials are projecting a stunning $54 billion deficit, Gov. Gavin Newsom (D)’s budget proposes a range of new revenue options, including an important change to how business income is calculated for tax purposes, eliminating net operating loss carryovers for most businesses for three years. Net operating loss provisions in corporate net
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The State Municipal Assistance for Response and Transition (SMART) Act, sponsored by Senators Bob Menendez (D-NJ) and Bill Cassidy (R-LA) in the Senate and by Rep. Mikie Sherrill (D-NJ) in the House, would provide $500 billion in flexible funding to state, local, and tribal governments to backfill lost revenues and otherwise provide fiscal relief during
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Across the country, unemployment insurance (UI) benefits are playing an important role in helping individuals who have lost work due to the COVID-19 pandemic and associated economic fallout. The Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law on March 27, provided a temporary, federally-funded increase in UI benefits and expanded benefits eligibility.
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Sources of state revenue have come under closer scrutiny in light of the impact of the coronavirus outbreak, as different tax types have differing volatility and economic impact—although even beyond these unique circumstances, it is important for policymakers to understand the trade-offs associated with different sources of tax revenue. This week’s map looks at what percentage of each
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The HEROES Act, introduced Tuesday by House Democrats, provides more than $1 trillion to state and local governments, including $915 billion in flexible aid—which can be spent for any purpose, including to backfill revenue losses—in installments over the next year. In broad strokes, these coronavirus relief funds are four tranches for allocation purposes: by jurisdiction
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As we continue to look at tax types that can harm states’ post-coronavirus recovery, it’s worth highlighting taxes on business inventory. Inventory taxes fall under the umbrella of the property tax, which is the largest tax paid by businesses at the state and local levels. In addition to taxes on the value of buildings and land, businesses
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This week’s map looks at another barrier to business and consumer recovery: capital stock taxes. These taxes impair economic growth in the best of times, but during an economic contraction they are particularly harmful to businesses struggling to remain viable. As many businesses may need time to return to profitability after the crisis, states should
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  This past week, state policymakers made continued progress in their fiscal policy responses to the coronavirus outbreak. Major trends and developments are recapped below. New Revenue Forecasts Several states—including California, Delaware, Kansas, and Maryland—recently issued revised revenue forecasts that show serious shortfalls in the current and next fiscal years. In California, the Department of
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On Wednesday, the U.S. Department of the Treasury issued new guidance on allowable expenses using the $150 billion in state aid provided under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a point on which there has been considerable confusion. The guidance provides a reasonably flexible interpretation of permissible uses of payments from the
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Although it’s unclear how soon state economies across the country may be able to open again, it’s not too early for states to think about how they can remove barriers to businesses and consumers resuming activity after this huge disruption. Today’s map looks at which states levy a gross receipts tax, which is often considered
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  This past week, state policymakers made continued progress in their fiscal policy responses to the coronavirus outbreak. Major trends and developments are recapped below. Tax Deadline Extensions Several states extended their deadlines for payment of sales taxes, excise taxes, and other taxes remitted by businesses. Some of these announcements were new, while other states
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Key Findings: The coronavirus pandemic affects almost every source of state revenue, and with the duration unknown, predicting economic outcomes will be difficult. Social distancing, stay-at-home-orders, and quarantines make the resulting recession fundamentally unique. Hospitality, leisure, and travel could be among the hardest hit industries. As a result, excise taxes and fees on air travel
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  The past four weeks saw most states busy with legislative and gubernatorial activity as policymakers worked around-the-clock—if not always from their usual locations—responding to the immediate public health, societal, and economic implications of COVID-19. Governors declared states of emergency, issued stay-at-home orders, and either requested or directed state emergency funds to be used to
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