Pandemic-shortened sessions contributed to less-and different-activity on the tax front than is seen in most years, and will likely yield an unusually active summer and autumn, with many legislatures considering new measures during special sessions. Nineteen states had notable tax changes take effect on July 1, 2020, which is the first day of fiscal year (FY) 2021 for every state except Alabama, Michigan, New York, and Texas. Iowa reduced its excise tax rate on certain ethanol-based motor fuels.Ĭolorado, North Carolina, and Virginia modified various transportation-related user fees.Īlthough the majority of state tax changes take effect at the start of the calendar year, some are implemented at the beginning of the fiscal year. Three states-California, South Carolina, and Virginia-increased their statutory excise tax rate on motor fuel. Virginia doubled its cigarette tax from 30 to 60 cents per pack. Utah, Virginia, and Wyoming have newly begun taxing vapor products, and Kentucky’s new vapor tax is scheduled to take effect on August 1. New sales tax exemptions took effect in Virginia and Washington.Īs part of a gradual phaseout, New Jersey reduced the sales tax rate on medical marijuana. North Carolina now requires marketplace facilitators to collect local meals taxes.
Illinois now requires remote sellers to collect state and local sales taxes, rather than use taxes. Two states, Louisiana and Mississippi, began requiring marketplace facilitators to collect sales and use taxes. Indiana had the lone corporate income tax change, with the rate decreasing from 5.5 to 5.25 percent.
Nineteen states had notable tax changes take effect on July 1, 2020.
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