Tax Day has come and gone, and most of us won’t return to thinking about our obligations to the government until early next year. But a quieter tax event just took place that has implications for residents in several states.
On July 1, around a dozen states implemented tax changes to mark the beginning of their fiscal year, according to the Tax Foundation. These changes will affect everything from corporate and individual income taxes to gasoline and nicotine product purchases.
Some of these moves are good for taxpayers, but others will cost consumers. Following are states where taxes are changing in the middle of summer.
Effective July 1, Idaho has created a tax rebate fund, and the state will distribute a one-time refund to taxpayers. The amount of the refund will be whichever of the following two options is greater:
- 9% of a taxpayer’s 2019 individual income taxes paid
- $50 per taxpayer and dependent
In addition, tax rate reductions that lower both the corporate tax rate and top individual income tax rate from 6.925% to 6.5% have been made retroactive to the beginning of the year.
Utah now imposes excise taxes on additional nicotine products.
The tax on nontherapeutic nicotine device substances and prefilled nontherapeutic nicotine devices, such as electronic cigarettes, is 56% of the manufacturer’s sales price. This tax rate is equivalent to the state and federal taxes on traditional cigarettes, the Salt Lake City Tribune reports.
Meanwhile, the tax on alternative nicotine products like patches and gum is $1.83 per ounce.
These changes were made by Senate Bill 37: Electronic Cigarette and Other Nicotine Product Amendments, which was part of a series of anti-vaping state laws created in 2020, Salt Lake City’s Fox 13 reported.
As of July 1, Florida has joined many other states in requiring most types of remote sellers and marketplace facilitators to collect and remit the state’s sales taxes when a business’s annual sales to customers in Florida exceed $100,000. In other words, Floridians should expect to be charged sales tax more often when shopping online.
That leaves Missouri as the sole state without such rules at present. However, the Show-Me State has adopted legislation that will put such rules into effect in 2023.
Kansas also has a new law for remote sellers and marketplace facilitators that went into effect this month. It requires such businesses to collect state and local sales taxes when they have more than $100,000 in annual gross receipts from sales coming into the state.
As is the case in Florida, the new statute essentially means that folks in Kansas should expect to be charged sales tax more often when shopping online.
Vermont-based marketplace facilitators now must collect and remit the state’s universal service charge on sales of prepaid wireless telecommunications services.
The universal service charge tax rate is 2.4%, according to Vermont’s Department of Taxes. This tax is paid by the consumer and is in addition to the state sales tax.
A slew of changes have occurred to New Mexico’s sales tax. The biggest change is that the tax for most goods has gone from being origin-sourced (with the local sales tax rate based on the seller’s location) to destination-sourced (with the rate based on the delivery location).
The motor fuel tax in South Carolina has risen from 24 to 26 cents per gallon. The increase is part of a six-year phased-in gas tax hike that will end when the tax reaches 28 cents per gallon in July 2022.
Technically known as a motor fuel user fee, this tax on fuels like gasoline is levied on the consumer. Fuel suppliers then must report and remit the tax to the state.
Old Dominion has authorized all counties to levy cigarette taxes at a top rate of 40 cents per pack. Under prior law, only certain counties could levy a cigarette tax.
In addition, Virginia’s gas tax has increased by 5 cents to 26.2 cents per gallon. It is the second of two 5-cent gas tax rate increases that began last year. Starting next year, this tax will increase annually based on inflation.
New Jersey is phasing out sales taxes associated with medical marijuana. In July 2020, the rate dropped from 6.625% to 4%.
This month, the rate fell to 2%. It will vanish altogether — like a puff of smoke — in July 2022.
Businesses are catching a break in the Hoosier State. The corporate tax rate fell from 5.25% to 4.9% this month. This is the final reduction in a gradual process that began in 2012.
A new Bayou State tax on sports wagering that applies to net gaming proceeds now is in effect. The tax rate is 10% for brick-and-mortar establishments and 15% for online sports betting platforms.