July Brings New Changes for Many Taxpayers in Different States
June 30, 2014
The first of July marks the start of the fiscal year for many states, and as with many other years, it also brings the start of changes to the tax code for many individual states. The Taxpayers Protection Alliance (TPA) has kept a close eye on tax increases over the past year, including efforts to raise taxes on e-cigarettes in New Jersey, Ohio and Rhode Island.
Last July TPA highlighted exactly what would change in several states across the country. Now, that time of year is once again upon us so here is a brief summary of how the tax code will change for taxpayers in selected states. Even though an increase in the minimum wage is not a tax increase, it is important to note exactly where minimum wages have been increased as Congress continues to debate the issue. Fortunately for taxpayers, not all the news is bad, there are some tax decreases.
The new tax laws for 2014 are listed below:
Arkansas– New exemptions and decreases for selected sales taxes dealing with both energy and agriculture spending by farmers.
Connecticut– Non-prescription drugs will be exempted from sales taxes.
District of Columbia– The minimum wage rises $1.25 to a total of $9.50/hr.
Florida– New sales tax exemptions on booster seats, child restraint systems, children’s bicycle helmets.
Idaho– Software that is purchased through the “cloud” will be sales tax-exempt.
Indiana– Corporate tax rate drops from 7.5 percent to 7 percent.
Maryland– Increase to the gas tax by less than 1 cent/gallon as part of an overall increase passed last year.
New Hampshire– The gas tax will increase by 4.2 cents/gallon to pay for highway improvements.
Rhode Island– Corporate tax rate decreases from 9 percent to 7 percent.
The changes listed above are essentially a mix-bag for taxpayers as a whole. While TPA applauds cutting corporate tax rates and sales tax rates, it is troubling that some states continue their assault on small businesses with minimum wage increase and taxes that disproportionately hurt the poor like increases in gas taxes. As the federal government moves at a slow pace on comprehensive tax reform, it is encouraging to see some states take the lead by giving tax relief. Hopefully that trend continues, and expands into 2015.