North Carolina took legislative action to prevent an automatic rate reduction to its motor fuel tax at the beginning of the year.Arizona, Montana, and New Jersey newly legalized recreational marijuana and set up a preliminary tax structure for when legal in-state sales begin.Colorado and Oregon increased their cigarette taxes Colorado, Georgia, and Oregon created new taxes on vapor products.Connecticut began the phaseout of its capital stock tax Illinois and Mississippi are continuing their phaseout processes and New York’s capital stock tax has been completely repealed.For example, nonprofits that fulfill certain requirements are granted tax-exempt status by the IRS, preventing them from having to pay income tax.

Connecticut, Vermont, and the District of Columbia will see adjustments to their estate tax exemption A tax exemption excludes certain income, revenue, or even taxpayers from tax altogether.

Arizona and Illinois made changes to their economic nexus laws governing sales and use tax collection requirements for remote sellers.

The Hall Tax, which previously taxed interest and dividend income but not wage income, has been completely phased out.

Tennessee joins seven other states that do not levy any individual income tax.

There are seven federal individual income tax brackets the federal corporate income tax system is flat. In a progressive individual or corporate income tax system, rates rise as income increases.

Arkansas reduced its top marginal individual income tax rate by eliminating the top income tax bracket A tax bracket is the range of incomes taxed at given rates, which typically differ depending on filing status.

Though barely 100 years old, individual income taxes are the largest source of tax revenue in the U.S. The Federal Income Tax was established in 1913 with the ratification of the 16th Amendment. imposes a progressive income tax where rates increase with income.

Arizona and New Mexico increased their top marginal individual income tax An individual income tax (or personal income tax) is levied on the wages, salaries, investments, or other forms of income an individual or household earns.

A broad tax base reduces tax administration costs and allows more revenue to be raised at lower rates. A narrow tax base is non-neutral and inefficient. Rates and made other substantive changes to their corporate income tax base The tax base is the total amount of income, property, assets, consumption, transactions, or other economic activity subject to taxation by a tax authority. Many companies are not subject to the CIT because they are taxed as pass-through businesses, with income reportable under the individual income tax. Arkansas and Iowa reduced their corporate income tax A corporate income tax (CIT) is levied by federal and state governments on business profits.Twenty-six states and the District of Columbia had notable tax A tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities.Retroactive Tax Changes Adopted in 2020.Tobacco, Vapor, and Marijuana Tax Changes.

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