WASHINGTON — During the first half of this year, states reported $1.80 billion or 0.2% of net tax cuts, the smallest amount in 32 years, according to a new report by the National Conference of State Legislatures.
The 11-page report, “State Tax Update: August 2012,” released Wednesday, summarizes tax changes in all 50 states through July 2012.
It shows decreases of $1.47 billion in personal income taxes, $173 million in corporate and business taxes, $156 million in sales and use taxes, $394 million in health care provider and industry taxes and $57 million in motor fuel taxes.
Off-setting those were increases of $372 million in tobacco taxes and $74 million in miscellaneous taxes.
Five states made sizeable net tax changes in 2012, with Idaho, Kansas and New York reporting reductions of more than 1%, and Illinois and Maryland reporting increases of more than 1%, according to the NCSL report.
Forty-five states made no significant net changes to their taxes. However, after the November elections there could be some dramatic changes in state taxes.
In California voters will decide on three separate ballot measures, including a proposal that would result in large, broad-based tax increases that could yield up to $10 billion in new revenues, while a third would cut business taxes.
“Revenues are slowly growing but not enough that states are willing to commit to a tax relief except in a handful of states,” according to Mandy Rafool, author of the report. “A lot depends on what happens in the November elections and in Europe.”
The report found that the major tax themes among the states revolved around a focus on high-income earners, changes to inheritance and estate taxes, and the use of incentives to hire veterans and attract new businesses.
Thirteen states cut personal income taxes, while three states raised it.
Maryland raised personal income taxes on higher-income taxpayers by increasing rates and lowering exemptions to generate about $250 million in revenue.
West Virginia extended personal income tax withholding requirements to include lottery winnings for an additional $7 million in revenue.
California’s ballot measures will contain personal income initiatives.
Thirteen states decreased their general sales and use taxes, while three raised them. The tax cuts included reducing sales tax on food, eliminating sales tax on energy used in manufacturing processes, and scaling back rates on jet fuel.
Georgia and Tennessee lawmakers separately approved measures that would allow some retailers to collect taxes on remote sales, as the U.S. Congress has been considering legislation to require out-of-state retailers to collect and remit online sales taxes.
Rhode Island extended its sales tax to include a handful of previously exempt items.
In addition, 12 states increased various fees for a net increase of $330 million, while no states cut them. Indiana raised 911 fees on wireless phones, prepaid wireless and land lines to generate an additional $22 million. Washington, Virginia and Vermont all raised motor vehicle-related fees.
Overall, the 50 states made tax, fee and other revenue changes that will result in an anticipated $1.5 billion decrease in total revenues for fiscal 2013, the NCSL report said.