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1 Katherine Loughead, State Tax Changes as of January 1, 2020 1 (2019)

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No. 683
Dec. 2019

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State Tax Changes as of January 1, 2020

Katherine  Loughead

Errata: An earlier version of this paper, in the Key Findings, mistakenly listed New
Jersey among  the states seeing a corporate income  tax rate increase rather than a
reduction. It has been corrected.

Addendum:   This paper has been updated  to mention new  and increased vehicle
registration fees and sales taxes on vehicle trade-ins in Illinois, as well as the
phaseout  of income taxes on Social Security benefits for qualifying taxpayers in West

Key Findings

   -  Thirty-five states have major tax changes taking effect on January 1, 2020.

   -  Arkansas, Tennessee,  and Massachusetts   will each see reductions in their
      individual income tax rates.

   -  Five states (Iowa, Kansas, Maine, North Carolina, and Ohio) will see notable
      changes  to their individual income tax bases.

   -  Corporate  income, capital stock, franchise, or similar taxes on businesses
      or financial institutions will decrease or be eliminated in seven states
      (Connecticut, Florida, Illinois, Indiana, Missouri, Mississippi, and New Jersey),
      but taxes will increase on certain financial institutions in Washington.

   -  Oregon  will implement  a new Corporate  Activity Tax (CAT), which is a
      modified  gross receipts tax (GRT).

   -  Florida is the lone state with a general sales tax rate change (a reduction).

   -  Five states will see changes to their estate taxes. Connecticut, Minnesota,
      Vermont,  and New   York will see increases in their estate tax exemptions
      (taxpayer-friendly provisions), while Hawaii's estate tax will become more

   -  Two  states (Illinois and Louisiana) will implement new excise taxes on
      cannabis  products.

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