Over 10 states have cut their taxes this year

Between 2021 and 2022,

Ten states enacted individual income tax rate reductions. Six states enacted corporate income tax rate reductions.

Oklahoma became the first state to make permanent the full expensing of capital investments by C corporations in the year they made the investments.

Two states permanently exempted groceries from their respective sales tax bases. Five states suspended their tax on gasoline.

But this trend did not stop in 2022. According to the Tax Foundation‘s tabulations, by June 8 this year, eight states had

adopted individual income tax rate reductions: Arkansas, Indiana, Kentucky, Montana, Nebraska, North Dakota, Utah, and West Virginia. Additionally, Michigan triggered a potentially temporary rate reduction, while previously scheduled or triggered reductions also took effect in 2023 in Arizona, Idaho, Iowa, Mississippi, Missouri, New Hampshire (interest and dividend income tax), and North Carolina.

Meaning that

Since 2021, 25 states have cut individual income tax rates (including 23 reductions to top marginal rates), 13 states have cut corporate income tax rates, two have cut sales tax rates, and many more have made structural improvements like repealing capital stock taxes, adopting permanent full expensing, raising nonresident filing and withholding thresholds, improving treatment of business tangible property, eliminating throwback and throwout rules, and more.

Since June, states have also enacted other tax reforms reducing their tax burden in other ways. Rhode Island, for example, enacted a law that exempts $50,000 of property from the state’s municipal tangible property tax. New Jersey, which already cut income taxes in the 2021-22 period, also adopted a law that would increase the income exempt from GILTI taxation. Similarly, Massachusetts passed a law to reduce its tax on short-term capital gains, and Wisconsin adopted a law to repeal its tangible property tax.

What does this mean? Minnesota, which was already behind, has fallen even further behind especially considering that our lawmakers raised taxes this year.