By 2026, the lone rate for all taxable income will be 3.9 percent. There will be three brackets in 2024 and two brackets in 2025 with top rates of 5.70 percent and 4.82 percent, respectively. The current nine-bracket system will be consolidated to four brackets in 2023, and the top rate will decrease from 8.53 percent to 6.5 percent. Under HF 2317, the Hawkeye State will transition from a graduated individual income tax structure to a flat rate system by 2026. If subsequent revenue triggers are met, the rate could be reduced to 2.9 percent by 2029. HB 1002 was enacted to reduce the flat individual income tax rate from 3.23 percent to 3.15 percent for calendar years 20. It also consolidated the five individual income tax brackets into four by eliminating the second-highest bracket. With enactment of H0436, Idaho reduced its top individual income tax rate from 6.5 to 6 percent and reduced its second rate from 3.1 to 3.0 percent for tax year 2022. For single filers, the personal exemption will increase from $2,700 in 2024 to $12,000 in 2024. The personal exemption will increase markedly from $7,400 for a married filer in 2022 to $18,500 in 2024 and to $24,000 in 2030. Per HB 1437, the rate could decrease to 4.99 percent by January 1, 2029, if certain revenue conditions are met. On January 1, 2024, Georgia will transition from a graduated individual income tax with a top rate of 5.75 percent to a flat tax structure with a rate of 5.49 percent. The Colorado State Income Tax Rate Reduction Initiative ( Initiative 31) could retroactively reduce the state’s flat individual income tax rate from 4.55 percent to 4.40 percent, if approved by voters in the upcoming November election. States such as Connecticut, Florida, New Jersey, and Tennessee have enacted new sales tax holidays, while 11 states (California, Colorado, Delaware, Georgia, Hawaii, Idaho, Illinois, Maine, New Mexico, South Carolina, and Virginia) chose to issue rebates to eligible taxpayers. Illinois delayed a two-cent gas tax increase. Connecticut, Florida, Georgia, Maryland, and New York enacted gas tax suspensions. Many other states have enacted a variety of temporary state tax relief measures.
Illinois and Tennessee chose to temporarily suspend all or some of their respective sales tax on groceries.
Ultimately, only Kansas and Virginia lawmakers decided to permanently exempt groceries from the state sales tax base. If approved in November, a ballot measure in Colorado would reduce the state’s corporate income tax rate.ĭuring this year’s sessions, several states considered proposals to permanently reduce the sales tax on groceries.
A ballot measure that could lower the individual income tax rate in Colorado is scheduled to be voted on in November, and there is still the possibility that Oklahoma or other states could enact income tax rate reductions in a future special session.Ĭorporate income tax rate reductions have been enacted in six states: Idaho, Iowa, Nebraska, New Hampshire, Pennsylvania, and Utah. With most states’ sessions now complete, individual income tax rate reductions have been enacted in 10 states: Georgia, Idaho, Indiana, Iowa, Kentucky, Mississippi, Nebraska, New York, South Carolina, and Utah. Among the 46 states that held legislative sessions this year, structural state tax reform and temporary state tax relief measures were recurring themes.