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1 Jared Walczak, Tax Trends at the Dawn of 2020 1 (2020)

handle is hein.taxfoundation/txtrdwn0001 and id is 1 raw text is: Tax Trends at the Dawn of 2020 Jared Walczak Director of State Tax Policy Key Findings The Tax Foundation is the nation's leading independent tax policy research organization. Since 1937, our research, analysis, and experts have informed smarter tax policy at the federal, state, and global levels. We are a 501(c)(3) nonprofit organization. @2020 Tax Foundation Distributed under Creative Commons CC-BY NC 4.0 Editor, Rachel Shuster Designer, Dan Carvajal Tax Foundation 1325 G Street, NW, Suite 950 Washington, DC 20005 * State tax changes are not made in a vacuum. States often adopt policies after watching peers address similar issues. Several notable trends in tax policy have emerged across states in recent years, and policymakers can benefit from taking note of these developments. * The enactment of the federal Tax Cuts and Jobs Act (TCJA) in late 2017 expanded many states' tax bases and drove deliberations on tax conformity. By the end of 2019, all but four states with individual or corporate income taxes (or, in the case of Texas, a gross receipts tax that relies on federal definitions) updated their conformity date to reflect a post-TCJA version of the Internal Revenue Code. * Many states incorporate the new federal tax on Global Intangible Low-Taxed Income (GILTI) by default, which often positions them to meaningfully tax international income for the first time and, in many cases, raises serious constitutional questions. In 2018, few states had issued guidance on their approach to GILTI, but by the end of 2019, 17 states taxed GILTI and had issued guidance to that effect, and another seven states and the District of Columbia may tax GILTI but have yet to offer guidance to taxpayers. * Five states cut corporate income taxes in 2019, and another two have reductions effective on, or which will be backdated to, January 1, 2020. * Six states cut individual income tax rates in 2019, three of them retroactive to 2018 and designed as a response to the base-broadening provisions of the TCJA. * The U.S. Supreme Court's Wayfair v. South Dakota decision ushered in a new era of sales taxes on e-commerce and other remote sales, with 43 of the 45 states with state sales taxes implementing a remote seller regime by the end of 2019, though state legislation on marketplace facilitators remains a work in progress, with amendments likely in many states. 202.464.6200 taxfoundation.org FISCAL FACT No. 684 Jan. 2020

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