Tax Revenue reflects the revenue effect of tax actions for that fiscal year.

Transcription

1 Appendix E Tax and Revenue Changes by State This appendix shows the tax and revenue changes that took place by state in 2018 regular and special legislative sessions that will affect state revenues in and. The appendix also includes any tax measures approved by voters in the 2018 election. Lastly, changes effective in a certain fiscal year as a result of legislation passed in an earlier year are also reflected in the totals. Tax Revenue reflects the revenue effect of tax actions for that fiscal year. Revenue Total reflects the total amount of state revenue change. It combines revenue derived from tax actions with other revenue changes, such as fee increases, accelerations and other one-time changes. Recurring changes made for state policy reasons are not reflected in the totals. This appendix does not include changes in unemployment compensation. The following abbreviations are used: AGI = Adjusted Gross B&O =Business and Occupation CPI = Consumer Price Index CIT = Tax EITC = Earned Tax Credit GRF = General Revenue Fund HMO = Health Maintenance Organization IRC = Internal Revenue Code LLC = Limited Liability Corporation LLP = Limited Liability Partnership NOL = Net Operating Loss PIT = Tax R&D = Research and Development SSTP = Streamlined Sales Tax Project TCJA = 2017 Tax Cuts and Jobs Act TY = Tax Year Jurisdiction Description Tax Alabama Enacted legislation that allows the Irrigation Equipment Tax Credit to be claimed once in three different time periods rather than once over its lifetime. This change terminates Dec. 31, Codified the current Department of Revenue rule that limited the income tax credit for taxes paid on income from sources outside the state to offset only the portion of the taxpayer's Alabama income tax liability that is attributable to income derived from non-alabama sources. Increased the optional standard deduction adjusted gross income floor for taxpayers that are married filing jointly, head of family, and single from $20,000 to $23,000, and from $10,000 to $10,500 for taxpayers that are married filing separately. Exempted bullion or money from sales and use taxes. This change terminates June 1, Allowed marketplace facilitators to enter the Simplified Sellers Tax 17 1/1/2019 N.A. $1.8 1/1/2018 $13.0 $13.0 1/1/2019 N.A. -$4.0 6/1/2018 -$1.9 -$1.9 1/1/2019 $20.5 $31.0

2 Alaska Arizona (SSUT) Remittance Program and collect and remit SSUT on behalf of marketplace sellers utilizing its services for retail sales delivered in the state. This change is projected to increase revenues from $15 million to $26 million in and $23 million to $39 million in. Tax Revenue= $31.6 $39.9 Revenue Total= $31.6 $39.9 Mandated that utilities utilize water's edge reporting. The estimated revenue impact for this change is an increase from $100,000 to $5 million. Alaska's corporate income tax had a reduced rate for capital gains, which was tied to a federal definition of capital gains that was deleted in federal tax reform. No legislative action was taken, so capital gains will now be taxed at the same rate as other income. The old maximum rate was 4.5 percent, the new maximum rate is 9.4 percent. Extended the sunset date for the Education Tax Credit, which is applicable to all tax types. The new sunset date is Jan. 1, The legislation also reduced the credit's generosity. The positive fiscal impact shown is relative to current policy. Relative to current law, extending the credit is estimated to cost $6.35 million in. 1/1/2019 $2.6 $2.6 1/1/2018 $3.4 $3.4 Other 1/1/2019 $0.6 $1.2 Tax Revenue= $6.6 $7.2 Revenue Total= $6.6 $7.2 Increased the amount of military 1/1/2019 N.A. $2.0 pension that is exempt from state income tax from $2,500 to $3,500. Conformed to provisions in the federal TCJA effective in TY No legislation was enacted to conform to TCJA provisions effective in TY This change will result in a one-time revenue loss of $5 million in. Required all digital platforms that provide an unaffiliated third-party platform to rent lodging accommodations ("online lodging marketplace") to remit sales tax to the state and made the use of sales 9/28/2017 -$5.0 N.A. 1/1/2019 $10.0 $5.0 18

3 suppression software for tax evasion purposes illegal. Tax Revenue= $5.0 $7.0 Enacted a new fee that will be charged Fee 1/1/2019 $91.0 $182.0 on vehicle registrations. Non-Tax Revenue= $91.0 $182.0 Revenue Total= $96.0 $189.0 California Extended the California Competes Hiring Credit and reduced the credit amount. This credit will sunset July 1, This credit can be applied to both corporate and personal income taxes., 7/1/2018 -$ $180.0 Colorado Expanded the EITC to include those between 18 to 21 without children, those over 65, and increased the cap to account for increasing minimum wage. 19 1/1/2018 -$60.0 -$60.0 Tax Revenue= -$ $240.0 Increased the transaction fees between Fee 7/1/2018 $3.5 $3.5 the DMV and private entities from $3 to $4 per transaction. Non-Tax Revenue= $3.5 $3.5 Revenue Total= -$ $236.5 Enacted legislation changing how multistate 8/8/2018 $2.9 $6.1 corporate income taxpayers apportion income from the sales of services and intangible property to Colorado. This bill could increase or decrease corporate income tax revenue, ranging from -$2.9 million to +$8.6 million in and -$6.1 million to +$18.3 million in. Expanded the child care expenses income tax credit. This has increasing fiscal impacts through FY Created an income tax deduction for military retirement benefits received by individuals under the age of 55. The maximum deduction amount is capped in each tax year the deduction is available. Extended the sunset date for the lowincome housing tax credit for an additional five years. The credit was originally set to expire after No change in taxpayer liability. Extended the income tax credit for contributions to promote child care through This credit was originally set to expire after No change in taxpayer liability. 1/1/2019 -$1.9 -$3.7 1/1/2019 -$1.1 -$2.9 1/1/2020 N.A.** N.A.** 1/1/2020 N.A.** -$16.2** Tax Revenue= -$0.2 -$0.5

4 Increased fees paid by stationary Fee 5/18/2018 $1.8 $2.7 sources of air pollutants. Enacted an infant newborn screening Fee 7/1/2018 $1.5 $1.5 fee. Non-Tax Revenue= $3.4 $4.2 Revenue Total= $3.2 $3.7 Connecticut Allowed for scheduled sunset of the 20 percent Corp. Surcharge, which decreases to 10 percent in the 2018 income year and then completely phases out in the 2019 income year; base tax rate remains at 7.5 percent. The rate dropped from 9.25 percent to 8.25 percent. 1/1/2018 -$37.5 -$15.0 Delaware Establish a new in lieu of Tax, also referred to as the Pass-Through-Entity Tax, on the distributed shares of income from the Entity. Phased in an adoption of Federal Exemption levels for Estate and Gift Taxes. The new threshold is $2.6 million in IY 18 and $3.6 million in IY 19. Phased in the first portion of the pension/annuity exemption. This is the first of seven annual phase ins. Establish a new in lieu of Tax, also referred to as the Pass-Through-Entity Tax, on the distributed shares of income from the Entity. Expanded the Social Security exemption by increasing the threshold for the 100 percent exemption. Lowered the sales tax rate for vesselrelated sales from 6.35 percent to 2.99 percent. Adopted nexus provisions similar to South Dakota in the event of a ruling in favor of South Dakota. 20 1/1/2018 $600.0** $600.0** Other 1/1/2018 -$15.6 -$35.0 1/1/2019 -$8.2 -$24.6 1/1/2018 -$600.0** -$600.0** 1/1/2019 -$7.9 -$16.3 7/1/2018 -$2.5 -$2.5 12/1/2018 $0.0 $0.0 See Appendix D for property tax changes. Tax Revenue= -$71.7 -$93.4 Revenue Total= -$71.7 -$93.4 Increased the first-time homebuyers credit that can be taken against the Real Estate Transfer Tax from 0.05 percent to 1 percent. Lowered state tax rate on casino revenue from 43.5 percent to 42.5 percent. Other Retroactive to 8/1/2017 -$5.2 -$5.4 Other 7/1/2018 -$11.4 -$16.8

5 Enacted a new Angel Investor Tax Credit. The state will provide up to $5, million in tax credits for investments in qualified businesses that spur job growth. These credits are set to terminate Dec. 31, These credits can be applied to personal and corporate income taxes. District of Columbia 7/1/2018 $0.0 -$5.0 Tax Revenue= -$16.6 -$27.2 Revenue Total= -$16.6 -$27.2 Conformed corporate income tax to the Rolling $1.0 $1.0 TCJA. Basis Conformed unincorporated tax to the Rolling $1.0 $1.0 TCJA. Basis Increased the tax on for-hire vehicles Other 10/1/2018 $23.0 $23.8 (excludes taxicabs) from 1 percent to 6 percent. Conformed Estate Tax to the TCJA. Other Rolling -$6.5 -$6.5 Basis Conformed individual income tax to the Rolling $56.4 $58.9 TCJA. Basis Altered Class 2 property tax rates. The Property 10/1/2018 $40.4 $41.4 real property tax rates and special real property tax rates for taxable Class 2 Properties are: Florida $1.65 for each $100 of assessed value if the real property s assessed value is not greater than $5 million; $1.77 for each $100 of assessed value if the real property s assessed value is greater than $5,000,000 but not greater than $10 million; or $1.89 for each $100 of assessed value if the real property s assessed value is greater than $10 million. The general sales and use tax rate will increase from 5.75 percent to 6 percent. The total rate of tax on gross receipts for the sale of or charges for any rooms, lodging or accommodations will increase from 14.8 percent to percent. The total tax levy for cigarettes will increase from $2.94 to $4.94 per pack of /1/2018 $26.4 $ /1/2018 $3.4 $3.5 Tobacco 10/1/2018 $5.2 $4.2 Tax Revenue= $150.3 $155.0 Revenue Total= $150.3 $155.0 Amended the tax credit scholarship 7/1/2018 -$10.0 -$10.0 program.

6 Extended the contaminated site rehabilitation tax credit until June 30, Enacted a refund for certain air carriers. Certain air carriers may receive a refund of 1.42 cents per gallon of the tax imposed on aviation fuel purchased. Enacted a refund for the taxes paid for motor fuel used to transport agriculture after Hurricane Irma. The purchase must have been made between Sept. 10, 2017 and June 30, Exempted the transfer of real property between spouses that record the deed within one year of marriage from the documentary stamp tax. Exempted a veteran, the spouse of a veteran, or a person receiving public benefits from paying a local business tax or fee. Clarified that certain contractors are independent contractors for purposes of re-employment tax. Created two new scholarship programs that provide credits for contributions made to K-12 scholarship organizations. Enacted a back-to-school sales tax holiday. Clothing and school supplies are included in this tax change. The holiday is from Aug. 3-5, Reduced the commercial rent tax rate by 0.1 percent. Extended the tax credit for community contributions until June 30, Enacted a disaster preparedness holiday. Exempted certain tangible personal property from June 1-7, Enacted a refund for farm fencing materials purchased between Sept. 10, 2017 through May 31, 2018 due to damage incurred by Hurricane Irma. This refund expires Dec. 31, Enacted a refund for building materials purchased between Sept. 10, 2017 through May 31, 2018 and used on a nonresidential farm building to repair damage incurred by Hurricane Irma. This refund expires Dec. 31, Exempted from the sales and use tax or provide a refund of the tax on equipment used to generate electricity 22 7/1/2018 -$8.5** N.A. Motor Fuel 7/1/2019 N.A. -$10.5 Motor Fuel 7/1/2018 -$3.7 N.A. Other 7/1/2018 -$1.4 -$1.5 Other 7/1/2018 -$19.1 -$19.8 Other 7/1/2018 -$2.6 -$2.7 7/1/2018 -$71.0 -$99.1 7/1/2018 -$32.7 N.A. 1/1/2019 -$12.9 -$32.3 7/1/2018 -$1.9 -$2.9 7/1/2018 -$5.8 N.A. 7/1/2018 -$2.7 N.A. 7/1/2018 -$8.8 N.A. 7/1/2018 -$6.7 N.A.

7 at a nursing home or assisted living facility when purchased between July 1, 2017 through Dec. 31, Tax Revenue= -$ $175.9 Provided an exemption or waiver of Fee 7/1/2018 -$2.3 -$2.3 certain office of Financial Regulation or Department of Financial Services fees to active duty military members, veterans and veteran spouses. Repealed the license requirement for Fee 7/1/2018 -$1.5 -$1.5 clinical laboratories. Provided a refund of the surcharge Fee 7/1/2018 -$1.3 -$1.3 imposed by a university on excess credit hours. Reduced a traffic citation fine by 9 Fee 1/1/2019 -$0.7 -$1.7 percent if the person completes driving improvement school. Non-Tax Revenue= -$5.8 -$6.8 Revenue Total= -$ $182.7 Georgia Expanded the Student Scholarship 1/1/2019 -$42.0 -$42.0 Organization Tax Credit. This change is set to terminate Jan. 1, 2029., Enacted a Short Line Rail Tax Credit. 1/1/2019 N.A. -$2.4 Conformed to federal tax reform changes and reduced the top corporate income tax rate in The rate reduced from 6 percent to 5.5 percent. Another reduction will take place in Enacted an exemption for retirement income for a veteran surviving family member. 1/1/2018 $13.0 $ /1/2019 $5.2 $4.7 Conformed to federal tax reform 1/1/2018 $252.0 $24.0 changes and doubled the standard deduction in Reduced the top income tax rate in 2019 from 6 percent to 5.5 percent. Another reduction will take place in Enacted an exemption for data center 1/1/2019 -$7.6 $15.2 equipment. Enacted legislation creating economic 1/1/2019 $126.0 $299.0 nexus. Enacted an exemption for aquarium 1/1/2019 -$1.5 -$1.5 and museum construction. Enacted a 50 percent exemption on the 1/1/2019 -$3.0 -$3.0 sale of manufactured homes. See Appendix D for property tax changes. Tax Revenue = $342.1 $

8 Revenue Total= $342.1 $663.0 Hawaii Applied resort fees to transient Other 7/1/2018 $10.4 $12.8 accommodations. Applied the transient accommodations Other 7/1/2018 $14.7 $36.6 tax to travel agencies and tour packagers. Updated IRC conformity date. Other TY 2018 $9.2 $14.2 Increased the withholding of tax on disposition of real property by nonresident persons. The rate increased from 5 percent to 7.25 percent. 9/15/2018 $8.1 $2.6 Idaho Extended the general excise tax exemption for affordable housing projects. Also, the exemption cap increased from $7 million to $30 million. The new sunset date is June 30, Enacted nexus if selling more than $100,000 per year. Lowered the corporate income tax rate from 7.4 percent to percent. This change was part of a larger reform measure. Conformed to federal tax reform changes affecting TY This resulted in a base change of -$6.4 million. Conformed to federal tax reform changes affecting TY This change was part of a larger reform measure. Lowered individual rates by percentage points in all brackets. This change was part of a larger reform measure. Enacted a child tax credit of $205 per eligible dependent. This change was part of a larger reform measure. Conformed to federal tax reform changes affecting business income tax. These changes were part of a larger reform measure. Conformed to the federal Bipartisan Budget Act. This resulted in a base change of -$4.2 million. 24 7/1/2017 -$23.0 -$23.0 7/1/2018 $6.8 $7.6 Tax Revenue= $26.2 $50.8 Revenue Total= $26.2 $50.8 1/1/2018 -$15.1 -$15.5 income 1/1/2017 N.A. N.A. 1/1/2018 $118.8 $ /1/2018 -$ $ /1/2018 -$67.3 -$67.9 1/1/2018 -$21.4 -$4.2 1/1/2017 N.A. N.A. See Appendix D for property tax changes. Tax Revenue= -$ $82.5 Revenue Total= -$ $82.5

9 Illinois Pending U.S. Supreme Court decision, 7/1/2018 $150.0 $200.0 recapture of online sales tax. Tax Revenue= $150.0 $200.0 Revenue Total= $150.0 $200.0 Indiana Phased in a reduction to the corporate income tax rate. The rate lowered from 6 percent to 5.75 percent for. The rate will phase down again to 5.5 percent for. These changes were originally enacted in 2011 and 2014 and was a part of the larger reform measure. The new phased down rate is effective at the beginning of each FY. -$ $221.0 Phased in a reduction to the Financial Institution Tax (FIT). The rate will be 6.5 percent in CY 2018, 6.25 percent in CY 2019 and 6 percent in CY These changes were originally enacted in 2013 and The law also changed the distributions of FIT revenues and was also a part of a larger reform measure. Enacted the College Choice 529 Education Savings Plan Tax Credit. Conformed to the IRC. This revenue estimate reflects the impact for conformity on both the personal income tax and corporate income tax. Increased the deduction for military retirement and survivor's benefits. This change was originally enacted in Provided a sales tax exemption for certain property, including trucks and pavers, purchased by a person that manufactures hot mix asphalt at an asphalt plant. Eliminated the provision that specifies that food sold through a vending machine is not eligible for the sales tax exemption for food and food ingredients sold for human consumption. Enacted legislation providing that a transaction in which a user purchases, rents, leases or licenses the right to remotely access prewritten computer software is not subject to sales tax. This change is estimated to result in a loss of $5.7 million to $13.4 million in and. 25 Other, The new phased down rate is effective at the beginning of each calendar year. -$20.0 -$24.0 1/1/2018 Indeterminable, N.A. but significant 1/1/2018 $56.0 $88.7 1/1/2018 -$2.8 -$2.8 7/1/2018 Indeterminable, but likely a significant decrease Indeterminable, but likely a significant decrease 7/1/2019 N.A. -$5.0 7/1/2018 -$9.6 -$9.6 Tax Revenue= -$ $173.7 Revenue Total= -$ $173.7

10 Iowa Conformed to the IRC and lowered corporate rates. New, lower corporate rates will take effect TY This change was a part of a larger reform measure. Enacted base changes to the insurance premium tax. This change was a part of a larger reform measure. Kansas Enacted rate reductions and conformed to the IRC. The top rate was lowered from 8.98 percent to 8.53 percent. A new tax system is effective if two revenue triggers are met, earliest possible year is TY This change was a part of a larger reform measure. Enacted a series of tax credit changes affecting personal and corporate income tax. The revenue impact is a combination of these changes. This change was a part of a larger reform measure. Expanded the tax base to include remote sales. This change was similar to the South Dakota online sales expansion plus other base expansions. This change was a part of a larger reform measure. 26 1/1/2018 $25.6 $20.8 Other 1/1/2019 -$1.8 -$2.0, 1/1/2019 -$ $ /1/2019 $4.5 $7.9 1/1/2019 $55.8 $117.3 Tax Revenue= -$ $264.9 Enacted a small claims filing fee. Fee 7/1/2018 -$1.0 -$1.0 Non-Tax Revenue= -$1.0 -$1.0 Revenue Total= -$ $265.9 Enacted personal income tax reform in 2017 that contains a series of phase-ins. The estimated impact for includes $230.4 million attributable to non-wage business income and $403.5 million to the fully implemented rate increases. The amount of the medical expense itemized deduction was increased to 75 percent of the federal allowable amounts for TY Additionally, itemized deductions for mortgage interest and property taxes paid are increased to 75 percent of the federal allowable amounts for TY The estimated impact of these phaseins is combined with rate changes that took place in TY Enacted a sales tax exemption for cash rebates granted by a manufacturer to a purchaser or lessee of a new motor TY 2019 $633.0 $ /1/2018 -$3.3 N.A.

11 vehicle. This exemption is set to expire June 30, Tax Revenue= $629.7 $617.4 Revenue Total= $629.7 $617.4 Kentucky Adopted the IRC in effect on Dec. 31, In addition, the state lowered the tax rate and changed to single-factor apportionment and market-based sourcing. It collapsed its corporate income tax brackets, which ranged from 4 percent to 6 percent, and imposed a flat tax of 5 percent. The state also authorized combined reporting, which will become effective Jan. 1, These changes were a part of a larger reform measure. Adopted the IRC in effect on Dec. 31, 2017, except for the 20 percent deduction for pass-through income. In addition, the state lowered its individual income tax rate and expanded the base. It collapsed its individual income tax brackets, which ranged from 2 percent to 6 percent, and imposed a flat tax of 5 percent. This change is expected to add an additional $7.5 billion to the tax base. These changes were a part of a larger reform measure. Expanded the sales and use tax base. The state repositioned its statute in anticipation of a favorable ruling in the U.S. Supreme Court Case, South Dakota v. Wayfair, Inc. This change is expected to add an additional $3.2 billion to the state's sales and use tax base. This change was a part of a larger reform measure. Increased cigarette and tobacco tax rate from 60 cents to $1.10. This change was part of a larger reform measure. Louisiana 1/1/2018 -$29.8 -$50.2 1/1/2018 -$ $ /1/2018 $192.5 $238.0 Tobacco 7/1/2018 $136.0 $115.1 Tax Revenue= $194.3 $201.5 Increased the new tire fee from $1 to Fee 7/1/2018 $2.8 $3.0 $2; this revenue is used for waste tire disposal. Non-Tax Revenue= $2.8 $3.0 Revenue Total= $197.1 $204.5 Extended limitation of credit for taxes 6/12/2018 $33.6** $33.6** paid to other states. This tax change is 27

12 set to terminate June 30, No change in taxpayer liability. Expanded the state EITC. Increased the percentage from 3.5 percent to 5 percent of the federal credit. This tax change is set to expire June 30, Maine Maryland Increased the tax on emergency ground transportation service providers from 3.5 percent to 6 percent. Extended the additional sales tax at a reduced rate. The additional rate was previously 1 percent and now is 0.45 percent. 28 Health Care 6/12/2018 N.A. -$21.0 8/1/2018 $6.1 $6.1 7/1/2018 $466.0 $502.0 Tax Revenue= $472.1 $487.1 Increased the fee on certain vehicle Fee 8/1/2018 $0.9 $1.1 tires for the waste tire management program. The previous rate was $2 and the new rate is $2.25. Non-Tax Revenue= $0.9 $1.1 Revenue Total= $473.0 $488.2 Required the collection and remittance 10/1/2018 $2.0 $6.3 of sales and use tax on online real property rental platforms. Established an excise tax on recreational marijuana sales. The tax ranges from 30 cents to $335 per pound. 1/1/2019 $1.6 $6.8 Tax Revenue= $3.6 $13.2 Established recreational marijuana Fee 1/1/2019 $0.9 $1.2 cultivation, manufacturing and retail licenses. The rates range from $60 to $500 per facility. Non-Tax Revenue= $0.9 $1.2 Revenue Total= $4.5 $14.4 Enacted an income tax credit for a 6/1/2018 -$18.8 -$19.6 qualified Fortune 100 company based on jobs created at an eligible project. The credit may be used for up to 10 years and is equal to the total wages paid for qualified positions multiplied by 5.75 percent. The revenue loss is estimated to equal $4,885.2 million from FY 2021 through FY Enacted a refundable credit against both corporate and personal income tax for small businesses that provide paid sick and safe leave in accordance with state law to a qualified employee. The credit is the lesser of $500 per employee or the total amount of paid earned sick and safe leave accrued by, TY $5.0 -$5.0

13 qualified employees. The estimated revenue impact is a combined estimate. Made alterations to eligibility and reporting requirements for the film, production activity credit and specified the amount of credits that may be awarded in certain fiscal years. This credit may be claimed against corporate and personal income tax. The estimated revenue impact is a combined estimate. Extended the sunset date of the cybersecurity investment incentive tax credit through TY It is set to expire June 30, This credit may be claimed against personal and corporate income tax. The estimated revenue impact is a combined estimate. No change in taxpayer liability. Enacted an income tax credit for a qualified buyer who purchases cybersecurity technology or service from qualified Maryland companies. This credit may be claimed against personal and corporate income tax. The estimated revenue impact is a combined estimate. Made modifications to the One Maryland Economic Development Program, including new tiered credit amounts based on the number of qualifying positions, expanded geographic eligibility, and repealing of the start-up tax credit. This credit may be claimed against the corporate income tax, personal income tax, and insurance premium tax. The estimated revenue impact is a combined estimate. Phased in the use of single sales factor formula for apportionment of income to the state over a five-year period beginning in TY Specified that the value of the federal unified credit used to calculate the state estate tax is equal to the amount corresponding to an applicable exclusion amount of $5 million, rather than the federal exclusion amount. The state also established "portability" under the estate tax.,,,, Other 7/1/2018 -$8.0 -$11.0 6/1/2018 -$2.0** -$2.0** 6/1/2018 -$2.0 -$4.0 7/1/2018 -$0.8 -$2.5 7/1/2018 -$3.6 -$4.0 Other 7/1/2018 N.A. $

14 Made alterations to the heritage structure rehabilitation commercial tax, credit program by providing an additional 5 percent credit if the rehabilitation qualified as affordable housing and eliminating a requirement that rehabilitations of multiple structures that are functionally related to serve an overall purpose are treated as a single commercial rehabilitation. This credit may be claimed against personal and corporate income tax. The estimated revenue impact is a combined estimate. Extended the eligibility of the state and local earned income tax credits to individuals who do not have qualifying children and are between the ages of 18 and 24 years. Increased the maximum amount of military retirement income that may be deducted from $10,000 to $15,000. Expanded the deduction for retirement income of certain public safety personnel to include correctional officers. Increased the maximum amount of income that may be deducted by qualifying volunteer fire, rescue and emergency medical service members. Previously, individuals were able to deduct up to $5,000. Beginning in TY 2020, individuals will be able to deduct up to $6,000; up to $6,500 for TY 2021; and up to $7,000 for TY 2022 and future years. The revenue loss is estimated to equal $500,000 in FY 2021, $800,000 in FY 2022 and exceed $1 million beginning in FY Altered the value of the standard deduction beginning in TY 2018 by increasing its maximum value. The standard deduction increased from $2,000 to $2,250 for single filers and from $4,000 to $4,500 for taxpayers filing jointly. Beginning in TY 2019, the values will be indexed based on annual change in cost of living. Clarified that for state income tax purposes a taxpayer may deduct a personal exemption for the taxpayer, 7/1/2018 -$0.8 -$1.3 7/1/2018 -$7.5 -$5.5 7/1/2018 -$4.8 -$4.9 7/1/2018 -$1.7 -$1.7 7/1/2018 N.A. N.A. 7/1/2018 -$56.6 -$44.2 7/1/2018 N.A.** N.A.** 30

15 the taxpayer's spouse and eligible dependents under IRC 152. If the federal tax reform law were construed to repeal the state personal exemption, state general fund revenues would have increased by $730 million in and approximately $500 million annually going forward. No change in taxpayer liability. Created an exemption from sales and use tax for personal property and/or services purchased by a qualified Fortune 100 company for use at an eligible project. The exemption may be renewed for only 10 consecutive years. The revenue loss is estimated to equal $81.9 million for FY 2021 through FY Massachusetts Michigan Imposed sales and use tax at a rate of 8 percent for sales and charges related to peer-to-peer car sharing. This is a temporary tax that will terminate on June 30, See Appendix D for property tax changes. 31 6/1/2018 -$6.7 -$4.3 7/1/2018 Indeterminate, but potentially significant. Indeterminate, but potentially significant. Tax Revenue= -$ $69.4 Enacted a health insurance provider fee Fee 4/10/2018 $280.8 $84.2 assessment of 2.75 percent on specified entities for CY 2019 only. Non-Tax Revenue= $280.8 $84.2 Revenue Total= $164.5 $14.8 Enacted a new payroll tax to fund paid Other 7/1/2019 N.A. $775.0 family leave. The tax rate is 0.63 percent and is split between the employee and employer. This tax change is estimated to increase revenues from $750 million to $800 million in. Tax Revenue= $0.0 $775.0 Enacted a vehicle rental surcharge. The Fee 1/1/2019 $4.5 $9.0 surcharge is $2 per vehicle rental. The revenue estimates are about $4 million to $5 million in and about $8 million to $10 million in. Non-Tax Revenue= $4.5 $9.0 Revenue Total= $4.5 $784.0 Lowered the tax rate on insurance Other 6/25/2018 -$18.0 -$18.0 premiums written on qualified health insurance policies. The old rate was percent and the new rate is percent.

16 Voters approved recreational marijuana Other, in the 2018 election. The measure included a new 10 percent excise tax that would be applied. use tax is also levied on the product. Increased the state personal exemption amount. Minnesota Mississippi Increased the income limits on the Homestead Property Tax Credit. This was adopted in 2015 as part of changes associated with road funding. Enacted a tax levy on medical marijuana. This change was originally adopted in N.A. $89.3 2/28/2018 -$75.0 -$ /1/2019 -$ $ $36.3 $38.1 Tax Revenue= -$ $242.4 Eliminated Driver Responsibility Fees. Fee 3/1/2018 -$34.5 -$18.5 These rates were varied. Accelerated the phase-in for sales tax Other 1/18/2018 -$2.7 -$5.7 on difference for vehicle purchases. The state's previously enacted phase-in of sales tax on the difference for vehicle purchases was expected to result in a revenue loss of $38.8 million in and a loss of $42.1 million in. Nontax Revenue Change Non-Tax Revenue= -$37.2 -$18.5 Revenue Total= -$ $266.6 No tax legislation was enacted. Minnesota does have a law in place that will allow the DOR to begin collecting sales tax in response to the U.S. Supreme Court ruling in the South Dakota v. Wayfair, Inc. case. That law was enacted in The Minnesota DOR plans to begin collecting that tax Oct. 1, Tax Revenue= $0.0 $0.0 Revenue Total= $0.0 $0.0 Increased the amount of investment tax Other 7/1/2018 -$45.0 -$45.0 credits, which can be applied against the Insurance Premium Tax, available for allocation to investors under the MS Small Business Company Act. Extended the reduced oil and gas Other 3/19/2018 -$1.2** -$1.2** severance tax rate for horizontally drilled wells from which production from those wells commences before July 1, No change in taxpayer liability. Provided an exemption from income tax for payments received by an 1/1/2018 -$1.4 -$1.4

17 agricultural producer or cattleman from certain agricultural disaster programs. Provided a new credit from income tax for contributions to qualifying charitable organizations that assist children who are either already in foster care or at high risk of going into the state s foster care system, or serve children with a disability, or that serve low-income families. Additionally, the legislation increased the amount of the tax credit for each child legally adopted. The revenue impact reflects the loss from the adoption credit only. There was insufficient information to calculate the additional loss for the charitable contribution credits. Missouri Provided sales tax exemption for admissions to events sponsored by and held on property controlled by a municipality; however, a municipality may require the collection of the tax through adoption of an ordinance and notification to the Department of Revenue. 33 1/1/2018 -$1.3 -$1.3 7/1/2018 Unable to determine fiscal impact Unable to determine fiscal impact Tax Revenue= -$47.7 -$47.7 Revenue Total= -$47.7 -$47.7 Reduced the corporate income tax rate 1/1/2020 N.A. -$49.7 from 6.25 percent to 4 percent. Modified the law relating to the 1/1/2020 N.A. $45.3 allocation and apportionment of corporate income by requiring corporations to determine their income derived from sources within the state. Phased in a 10-cent fuel tax increase. Motor Fuel 7/1/2019 N.A. $73.2 Increased the cap on the Pregnancy Other 1/1/2019 N.A. -$1.0 Resource Center tax credit. This cap increase expires Dec. 31, Voters approved a constitutional Other N.A. $18.0 amendment legalizing medical marijuana. The language included a 4 percent tax on its retail sale. The revenue estimate includes annual taxes and fees that will be generated. An additional $6 million is estimated to come in for local governments. Reduced the top personal income tax rate by one-tenth of 1 percent, from 5.9 percent to 5.8 percent. Created an individual income tax deduction for business income and phases it in. This 1/1/2019 -$ $240.0

18 impact will be an additional 5 percent and will allow income tax brackets to be adjusted for inflation. This change was originally passed in 2014 by SB 509. The fiscal impact assumes further rate reductions. Current law provides for a reduction in the top rate of income tax over a period of years from 6 percent to 5.5 percent, with each cut becoming effective if net general revenue collections meet a certain trigger. In addition to such reductions, beginning in the 2019 calendar year, this act provides that the top rate of tax shall be reduced by 0.4 percent. The director of revenue shall adjust the tax tables as provided in the act. This act provides that when an income bracket is eliminated from the tax table, the top remaining tax rate shall apply to all income in excess of the second highest remaining income bracket. This act also creates a definition for "net general revenue collected," which includes all revenue deposited into the general revenue fund, less refunds and revenues originally deposited into the general revenue fund but designated by law for a specific distribution or transfer to another state fund. The act also modified the income tax deduction for federal tax liability paid by indexing the amount that may be deducted to the taxpayer's Missouri AGI. The deduction is allowed at 35 percent for AGI of $25,000 or more and is phased out to 0 percent for AGI of $125,001 or more. Lastly, the act modified the individual income tax deduction by reducing the maximum from 25 percent to 20 percent. The revenue impact incorporates all these changes. Required interest on overpayments of income taxes to be calculated in the same manner as interest on underpayments. Also, repealed a provision prohibiting the payment of interest on overpayments of income taxes if such interest is less than $1; this is applicable to all tax types. 1/1/2019 $1.7 $2.4 7/1/2019 N.A. -$2.7 34

19 Allowed members of the National Guard or reserve components of the Armed Forces of the United States to deduct such military income from his or her Missouri AGI to determine such taxpayer's Missouri taxable income. Montana Modified the Missouri Higher Education Savings Program to allow 529 MOST account holders to transfer money from such account to a Missouri ABLE account while retaining tax exempt status on any money transferred. This act additionally stipulated that funds held in 529 MOST savings accounts that are used at a designated elementary and secondary institution are considered a qualified education expense, permitting a taxpayer to receive a tax deduction for such expenses. Added a deduction for contributions to a savings account for first time homebuyers: $800 for individuals and $1,600 for married filing-joint taxpayers. Provided that the Missouri personal and dependency exemptions shall not be allowed if the federal exemption amount is zero. 35 1/1/2020 N.A. -$4.2 8/28/2018 Unknown negative fiscal impact Unknown negative fiscal impact 1/1/2019 N.A. -$1.3 Immediate This will not have a positive or negative effect on revenue due to the department has always believed that this language was not needed. This will not have a positive or negative effect on revenue due to the department has always believed that this language was not needed. Tax Revenue= -$ $160.0 Increased the fee from 2.5 percent to 4 Fee 8/28/2018 $1.8 $1.8 percent on the historic preservation tax credits. Non-Tax Revenue= $1.8 $1.8 Revenue Total= -$ $158.2 Voters approved an extension of the state s six mill levy to support the state s public colleges and universities. The levy was originally set to expire in Jan No change in taxpayer liability. Property 1/1/2019 N.A.** $20.9**

20 Tax Revenue= $0.0 $0.0 Eliminated the lottery system for liquor Fee 12/1/2017 $2.5 $3.8 licenses and replaced it with a competitive bidding auction where the proceeds would be deposited in the state general fund. This change was made in a November 2017 special legislative session. It is set to expire Dec. 31, Non-Tax Revenue= $2.5 $3.8 Revenue Total= $2.5 $3.8 Nebraska Changed adjustment to income for 1/1/2020 -$0.3 -$1.3 social security benefits. Enacted changes to provisions relating 1/1/2018 -$ $257.0 to income inflation adjustments, personal exemptions, and the standard deduction. The estimates shown are a reduction after adding into the "current law" forecast during the legislative session on the estimated effects of federal tax reform because of its interaction with the statutory definitions of state tax liabilities within the state tax code. Tax Revenue= -$ $258.3 Revenue Total= -$ $258.3 Nevada New Hampshire Voters approved a ballot measure exempting feminine hygiene products from sales and use tax. The combined estimated revenue loss per fiscal year is between $4.96 million to $7.11 million. Business Profits Tax rate decrease (SB 9, 2015 Session), from 8.2 percent to 7.9 percent. Business Profits Tax Rate Decrease (HB 517, 2017 Session), from 7.9 percent to 7.7 percent. Business Enterprise Tax rate decrease (SB 9, 2015 Session), from 0.72 percent to percent. Business Enterprise Tax rate decrease (SHB 517, 2017 Session), from percent to 0.6 percent. 36 1/1/2019 -$3.0 -$6.0 Tax Revenue= -$3.0 -$6.0 Revenue Total= -$3.0 -$6.0 -$11.9 -$11.9 For tax periods ending on or after 12/31/18 For tax periods ending on or after 12/31/19 For tax periods ending on or after 12/31/18 For tax periods ending on -$2.9 -$9.4 -$9.0 -$9.0 -$8.1 -$26.7

21 New Jersey Enacted an IRC Section 179 increase (SB 239, 2016 session). Increased deduction from $25,000 to $100,000. Enacted a IRC Section 179 increase (HB 517, 2017 session). Increased deduction from $100,000 to $500,000. Allowed the Electricity Consumption Tax to expire on Jan. 1, or after 12/31/19 1/1/2017 Unknown Unknown 1/1/2018 -$9.7 Unknown Other 1/1/2019 -$3.0 -$6.0 Tax Revenue= -$44.6 -$63.0 Revenue Total= -$44.6 -$63.0 Imposed a 2.5 percent surtax on 1/1/2018 $425.0 N.A. allocated net income over $1 million. This tax change is part of a larger reform measure and is set to expire at the end of Beginning Jan. 1, 2020, the surtax will drop to 1.5 percent. Required combined reporting under the corporation business tax. This tax change is part of a larger reform measure. Decoupled from 26 U.S.C. s.199a. Reduced deduction dividends received from subsidiaries in which the company owns an 80 percent or greater stake from 100 percent to 95 percent. Disallowed the deduction taken for federal purposes against income reported pursuant to federal IRC Section 965. Prescribed a method to apply the federal interest deduction limitation in IRC Section 163(j). Subjected sports wagering revenue realized by a casino, less the amount paid out as winnings, to an 8.5 percent tax. Subjects sums received from internet wagering on sports events, less the amount paid out as winnings, to a 13 percent tax. This is expected to have a positive revenue impact ranging from $12 million to $17 million in. Increased personal income tax rate on incomes over $5 million. The rate increased from 8.97 percent to percent. This tax change was a part of a larger reform measure. Increased the state EITC from 35 percent to 40 percent of the federal 1/1/2019 Indeterminate N.A. 1/1/2018 Indeterminate N.A. Retroactive to 1/1/2017 Retroactive to 1/1/2017 Indeterminate Indeterminate N.A. N.A. 1/1/2018 Indeterminate N.A. Other 6/11/2018 $14.5 N.A. 1/1/2018 $280.0 N.A. 1/1/2018 -$27.2 N.A.

22 earned income tax credit on a phasedin basis over three years. This tax change was a part of a larger reform measure. Provided a nonrefundable credit against the gross income tax to taxpayers who incur employment-related expenses while caring for a child or dependent. This tax change was a part of a larger reform measure. Imposed a tax on income attributable to certain "investment management services" that an individual partner or corporate partner provides on behalf of a partnership. This becomes effective upon the enactment by states of Connecticut, Massachusetts and New York of legislation having an identical effect. This tax change is a part of a larger reform measure and set to terminate upon the enactment of federal law closing the carried interest loophole. Increased the maximum gross income deduction allowed for homestead property taxes paid from $10,000 to $15,000. Decoupled from 26 U.S.C. s.199a. Imposed a 50-cent surcharge on rider of a prearranged ride from a ride-sharing service. Imposed the sales and use tax and the state hotel and motel occupancy fee on charges for the occupancy of a transient accommodation, and permits municipalities authorized to impose the Meadowlands regional hotel use assessment, the sports and entertainment facility tax, the Atlantic City luxury tax, the Atlantic City promotion fee, the hotel occupancy tax, the municipal hotel and motel occupancy tax, and the Cape May County tourism tax and assessment to similarly require the collection of tax on charges for the occupancy of a transient accommodation. Imposed a 10-cent per fluid milliliter tax on liquid nicotine. 38 1/1/2018 -$12.0 N.A. Upon enactment by the states of Connecticut, New York, and Massachusetts of legislation having an identical effect None N.A. 1/1/2018 -$97.9 N.A. 1/1/2018 Indeterminate N.A. 10/1/2018 $12.0 N.A. 10/1/2018 $15.0 N.A. Tobacco 9/30/2018 $4.4 $6.1 Tax Revenue= $613.8 $6.1

23 Establishes 90-day tax amnesty period Other for unpaid taxes due between Feb. 1, Nontax 2009 and Sept. 1, Revenue Change New Mexico New York 39 Immediate $200.0 N.A. Non-Tax Revenue= $200.0 $0.0 Revenue Total= $813.8 $6.1 Enacted a tax deduction for local small 7/1/2018 -$1.7 -$1.8 businesses on the Saturday after Thanksgiving. This tax change resulted in a base change of -$40.9 million. The deduction is set to expire Dec. 31, Tax Revenue= -$1.7 -$1.8 Revenue Total= -$1.7 -$1.8 Extended the statute of limitations on 4/1/2018 $2.0** $2.0** amended tax returns. No change in taxpayer liability. Extended the theater production credit for four years. This is estimated to decrease revenues by $4 million for personal and corporate income taxes beginning FY The credit is now set to terminate Dec. 31, Amended the definition of CFC income to reflect federal changes, without addressing GILTI. Changed the definition of residency for tax purposes. Extended the Hire-A-Vet credit for two years. This tax change is expected to reduce revenues by $37 million in FY This credit is now set to terminate Dec. 31, No change in taxpayer liability. Extended the Historic Rehabilitation Credit for five years and decoupled the credit from the federal credit. This tax change is estimated to decrease revenues by $89 million in FY This credit is now set to terminate Dec. 31, No change in taxpayer liability. Decoupled the PIT from the IRC for itemized deductions, the requirement to itemize on the federal level in order to itemize on the state level, and, 1/1/2019 N.A.** N.A.** 1/1/2018 Revenue Neutral- Prevents a $2 billion loss of revenue resulting from carry through of federal changes in the TCJA N.A. 4/1/2018 N.A. N.A. 4/1/2018 N.A.** N.A.** 1/1/2018 N.A.** N.A.** 1/1/2018 Revenue Neutral- Prevents a $1.5 billion Revenue Neutral- Prevents a $1.5 billion

24 changed the definition of "single taxpayer." Created an optional payroll tax for employees making more than $40,000 at a company that has elected to participate in the tax. The tax rate will be 1.5 percent in year one, 3 percent in year two, and 5 percent in year three and going forward. Decoupled the Empire Child Credit from the federal Child Credit. This will prevent a $503 million loss of revenue. No change in taxpayer liability. 40 tax increase tax increase resulting from resulting from carry through carry through of federal of federal changes in changes in the TCJA the TCJA 4/1/2018 N.A. N.A. 4/1/2018 N.A. N.A. Tax Revenue= $0.0 $0.0 Revenue Total= $0.0 $0.0 North Carolina Enacted partial conformity to IRC 1/1/2018 $40.1 $54.5 expensing and deductions changes. Enacted partial conformity to IRC 1/1/2018 $18.9 $16.5 expensing and deductions changes. Tax Revenue= $59.0 $71.0 Revenue Total= $59.0 $71.0 North Dakota Legislation enacted by the 2015 Legislative Assembly allows taxpayers to elect an alternate income tax apportionment method. The legislation allows a double weighted sales factor apportionment election for tax years 2016 and 2017, a 75 percent weighted sales factor apportionment election for tax year 2018, and a single sales factor apportionment election for tax years 2019 and forward. 1/1/2015 -$16.3 -$44.3 Legislation enacted by the 2017 Legislative Assembly requires remote sellers that do not have a physical presence in North Dakota to remit sales and use tax on items delivered into this state if the seller makes at least 200 transactions or had more than $100,000 in sales in North Dakota in the previous or current calendar year. The bill contained a contingent effective date which was triggered by the Supreme Court's ruling in South Dakota v. Wayfair, Inc., which overruled Quill Corp. v. North Dakota. The Tax Department estimates revenue 6/21/2018 $20.0 $20.0

25 Ohio Oklahoma Oregon 41 increases of $20 million to $50 million per year as a result of the bill. See Appendix D for property tax changes. Tax Revenue= $3.8 -$24.3 Revenue Total= $3.8 -$24.3 Conformed to the federal AGI 1/1/2017 $0.0 $0.0 definition. Enacted an exemption for prescription 7/1/2019 N.A. -$23.2 eyewear. Enacted an exemption for certain tangible personal property used in oil/natural gas production. Enacted a three-day tax holiday in August. Increased the tax rate on diesel fuel by six cents. The rate increased from 14 cents to 20 cents. Increased the gas tax rate by 3 cents. The rate increased from 17 cents to 20 cents. Increased the incentive rate on production from 2 percent to 5 percent for the first 36 months. Authorized non-house banked table games and sports pools as negotiated by compact. Capped the amount of itemized deductions at $17,000, excluding charitable donations and medical expenses. Enacted a tax levy on "website/affiliate" sales. Increased the cigarette pack rate from $1.03 to $2.03. Modified the tax on little cigars. The previous rate was based on weight and the new rate is mills per "stick." 9/13/2018 -$2.7 Minimal loss 8/1/2019 N.A. -$16.9 Tax Revenue= -$2.7 -$40.1 Revenue Total= -$2.7 -$40.1 Motor Fuel 6/28/2018 $5.3 N.A. Motor Fuel 6/28/2018 $52.0 N.A. Other 6/28/2018 $166.8 N.A. Other $0.0 Fiscal impact is unknown 1/1/2018 $94.0 N.A. 4/10/2018 $19.6 $20.5 Tobacco 6/28/2018 $152.1 N.A. Tobacco 6/28/2018 $1.0 N.A. Tax Revenue= $490.7 $20.5 Revenue Total= $490.7 $20.5 Conformed to the deemed repatriation 1/1/2017 $140.0 $5.0 provision in the federal TCJA. Extended the Long-Term Care Health 7/1/2020 N.A. N.A. Assessment. The new termination date Care is June 30, The estimated fiscal impact in FY 2021 is a revenue increase of $72.4 million. No change in taxpayer liability.

26 Expanded the definition of businesses Other 1/1/2018 $2.4 $2.4 required to pay transient lodging taxes. Created a subtraction for contributions to home buyer savings accounts. This change is set to terminate Jan. 1, /1/2019 N.A. -$2.0 Pennsylvania Rhode Island South Carolina Extended the reduced tax rates for pass-through entities to sole proprietors. Decoupled from the federal passthrough deduction in the federal TCJA. 42 1/1/2018 -$11.3 -$11.8 1/1/2018 $182.0 $192.0 Tax Revenue= $313.1 $185.6 Revenue Total= $313.1 $185.6 Decoupled from IRC provision allowing 6/28/2018 -$19.3 -$21.2 bonus depreciation. Sports wagering legislation was enacted Other 10/31/ $70.0 N.A. in 2017, which became effective at the 2017 time of the federal ruling. Tax Revenue= $50.7 -$21.2 Revenue Total= $50.7 -$21.2 Expanded the sales and use tax base by 7/1/2018 $9.7 $9.8 including security services. Expanded the sales and use tax base by 10/1/2018 $4.8 $6.6 including software as a service. Authorized sports betting at state Other 10/1/2018 $24.5 $27.3 operated casinos. Tax Revenue= $39.0 $43.7 Increased mutual fund filing fees by Fee 7/1/2018 $6.9 $6.9 $750. The old rate was $1,000 and the new rate is $1,750. Increased the insurance claims Fee 7/1/2018 $3.0 $3.0 adjusters registration fee by $100. The old rate was $150 and the new rate is $250. Non-Tax Revenue= $9.9 $9.9 Revenue Total= $48.9 $53.6 Increased the motor fuel tax for FY Motor Fuel 7/1/2018; $85.1 $ by 2 cents per gallon, from 18 7/1/2019 cents to 20 cents. Another increase by 2 cents will be phased in for. This tax change was a part of a larger reform measure. Increased the maximum threshold from $11 million to $12 million for refundable tax credits claimed for contributions to the Educational Credit for Exceptional Needs Children Fund. The General Assembly met in special session in early October and enacted income tax conformity to the IRC. The bill that passed reduced general fund income tax revenue by an estimated $4 7/1/2018 -$1.0 -$1.0 1/1/2019 -$4.0 No Estimate