![]() Illinois suspended sales taxes on groceries for one year ( S 157), Tennessee authorized a one-month food tax holiday, and Idaho approved an increase in the state grocery tax credit ( S 509). Kansas enacted a measure to phase out the grocery taxes by 2025 ( H 2106) and Virginia eliminated the state’s reduced 1.5% grocery tax ( H 30) as well. Of the 13 states that applied sales tax to grocery purchases going into 2022, several reduced or eliminated for such taxes. The state reduced the gross receipts tax rate by a quarter of a percent (5.125% to 4.875%). In addition to income tax cuts, there are several other broad categories of individual tax relief states have pursued in 2022: Sales Tax ReductionsĪt least 14 states proposed cutting sales tax rates in 2022, but New Mexico ( H 163) has been the only one to enact a reduction. Utah ( S 59): Reduced the personal and corporate income tax rates from 4.95% to 4.85%.Virginia ( H 30): Did not reduce rates but provided for an increase in the standard deduction from $4,500 to $8,000 for individuals between January 20, with the full reduction contingent on revenue growth exceeding a specified amount.Provides for additional 0.1% rate reductions each year until the rate reaches 6%, starting with tax year 2023, contingent on revenue triggers being met. South Carolina ( S 1087): Consolidates the number of brackets from six to three and cuts the state’s top individual tax rate from 7% to 6.5% for tax year 2022.New York ( S 8009): Accelerated planned tax cuts for low- and middle-income earners.Nebraska ( L 873): Gradually reduces the marginal income tax rate to 5.84% from 6.84% by 2027, and reduces the corporate rate to 5.84% as well. ![]() Mississippi ( H 531): Eliminated its lower income tax brackets to establish a flat rate and reduced the marginal rate from 5% to 4% by 2026.Kentucky ( H 8): Reduced the state flat income tax rate to 4.5% from 5% and provided for gradual elimination of the tax contingent one the state meeting a specified threshold of general fund receipts.Indiana ( H 1002): Reduced the state flat income tax rate from 3.23% to 3.15%.Provides for a reduction in the corporate income tax rate from 9.8% to 5.5%, contingent on revenue triggers being met. Iowa ( H 2317): Gradually reduces the personal income tax rate to 3.9% from 8.5% by 2026.Idaho ( H 436): Consolidated individual income tax brackets from five to four, lowered the marginal rate being from 6.5% to 6% for both personal and corporate income taxes.Georgia ( H 1437): Creates a flat tax rate and gradually reduces the rate from 5.75% to 4.99% by 2029.These income tax rate reductions have been enacted in 2022: Another recent, noteworthy trend is that three of these states (Georgia, Iowa, and Mississippi) are moving from graduated structures to a flat tax rate. ![]() In many cases, the cuts that have been approved will be phased in over several years or are contingent on revenue triggers being met. Nebraska and Mississippi also enacted tax cuts that will cost over half a billion dollars. Several states, including Kentucky, Georgia, Iowa, South Carolina and Virginia enacted tax reductions that will each exceed $1 billion annually once fully phased in (ranging from 1% to over 5% of the previous year’s total revenue collections, depending on the state). In 2022 thus far, at least 10 states have enacted Income tax rate cuts.
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