Most states' temporary tax hikes have expired

Most states' temporary tax hikes have expired

URBANA — Most of the temporary tax increases enacted by states since December 2007 have been allowed to expire, according to research by the Institute of Government and Public Affairs at the University of Illinois.

It's unclear for now if that will be the outcome of an increase in both individual income tax rates and corporate tax rates that was approved by Illinois lawmakers in January 2011. The individual rate, now 5 percent, is scheduled to drop to 3.75 percent on Jan. 1, 2015. The corporate rate, now 7 percent, is scheduled to become 5.25 percent.

Seven of the 11 state tax increase packages that already have reached their sunset date have expired, said IGPA researchers Andrew Crosby and Davis Merriman. Those were sales tax increases in Arizona, California and North Carolina, and income tax increases in California, Maryland, New Jersey, North Carolina, Ohio and Oregon.

Of the four states that kept their taxes up — Delaware, Kansas, Nevada and New York — all but Nevada made modifications to the original phase-out. Kansas, for example, had scheduled a sales tax rate drop from 6.3 percent to 5.7 percent, but instead dropped the rate to only 6.15 percent. At the same time it agreed to gradually lower income tax rates.

Illinois' income tax increase has meant about $5 billion more a year in revenue to the state, according to the IGPA.

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Sid Saltfork wrote on October 29, 2013 at 10:10 am

Come on, Tom, give the existing tax rates for the surrounding states.  Your article is misleading.  Sure, some states dropped their temporary taxes; but what are their current rates?  Wanna bet that they are higher than Illinois' "temporary tax"?

More media propaganda brought to you by the one, and only newspaper that encourages the theft of the elderly, public employees earned pensions.  Has the News Gazette no shame?