A Review of Significant State Tax Changes During 2009

Tax Foundation ^ | December 21, 2009 | Joseph Henchman

[reaganaut1]

State Changes to Individual Income Taxes

Increases

California in May added 0.25% to each income tax bracket, retroactive to January 1, 2009 and expiring December 31, 2010.

Connecticut in September added a new top bracket of 6.5% on income over $500,000, retroactive to January 1, 2009.

Delaware in June added a new top rate of 6.95% on income over $60,000 retroactive to January 1, 2009.

Hawaii in May added three new brackets retroactive to January 1, 2009: 9% on income over $150,000; 10% on income over $175,000; and 11% on income over $200,000.

New Jersey in June added three new brackets retroactive to January 1, 2009 and expiring 12/31/09: 8% on income over $400,000; 10.25% on income over $500,000; and 10.75% on income over $1 million.

New York in May added two income tax brackets retroactive to January 1, 2009 and expiring December 31, 2011: 7.85% on income over $200,000 and 8.97% on income over $500,000.

North Carolina in August imposed a tax surcharge of 2% on those with incomes over $60,000 and 3% on those with incomes over $150,000, retroactive to January 1, 2009 and expiring December 31, 2010.

Oregon in July approved the addition of two new brackets retroactive to January 1, 2009 and expiring 12/31/11: 10.8% on income over $125,000 and 11% on income over $250,000. After 2011, the former bracket will become 9.9% and the top bracket will be eliminated.

Wisconsin in June added a new top bracket: 7.75% on income over $225,000.

Reductions

Louisiana in 2008 reduced rates on some incomes by adjusting the bracket structure beginning January 1, 2009. The 6% bracket that formerly kicked in at $25,000 now begins at $50,000.

[reaganaut1]

I wonder how many of the tax increases set to expire ever will. More details are at the Tax Foundation site. Other states reducing income taxes, at least for some people, were Maine, North Dakota, Ohio, and Vermont.

[Graybeard58]

The Illinois legislature wanted to raise the income tax from 3% to 4.5% and they called it a 1.5% increase.

Aren’t democrats special?

[allmost]

Bump. Busy little legislative leeches in most cases.

[ladyvet]

Retroactive = GOTCHA!

[dearolddad]

Retroactive = GOTCHA!

didn't there used to be something called "ex post facto" laws?

[Grumpybutt]

Though Texas does not have an income tax, for Texas businesses, we all received nice little letters from the Texas Workforce Commission (state unemployment insurance) about a tax rate “increase” - our unemployment tax rate went from .26% to .72% effective 1/1/09 - and the sad thing is, we’re on the LOW end of the rate. I’ve heard some estimates of business owners having to pay hundreds per employee because of their history with lay off’s, etc.

[Buckeye McFrog]

the Pennsylvania Constitution still forbids a graduated, progressive income tax (despite Fast Eddie’s best efforts)

[reaganaut1]

the Pennsylvania Constitution still forbids a graduated, progressive income tax (despite Fast Eddie’s best efforts)

Interesting. I wish the Constitution had a similar provision

[ridesthemiles]

Another tidbit from Wisconsin:

A friend in Madison told me this last week that he just got his property tax bill and his ONE YEAR increase was 11.03% over his prior amount. No changes to his house or property to instigate this increase, either.

Wisconsin has a 7.75% income tax, and their sales tax isn’t low.

My family wonders why I won’t move back there......Ha Ha.

[PMAS]

ping