Don't Mess With Taxes

Things are brighter for residents of 12 states where taxes were lowered this year. (Photo by NASA on Unsplash)

Most states operate on a fiscal year that starts on July 1, so many of their law changes take effect in the summer.

But in some cases, state lawmakers set the start of a new year as enactments day for new laws. That makes things easier for resident, especially when the changes are tax-related, since tax years typically align with the January-to-December calendar.

That's the new tax law case in 34 states, according to research from the Tax Foundation.

Lower state taxes in 2024: The changes are particularly notable by residents in the dozen states that now have lower individual income tax rates, according to a recent article by the Washington, D.C.-based tax policy nonprofit.

The 12 states where 2024 starts with lower personal tax rates are Arkansas, Connecticut, Georgia, Indiana, Iowa, Mississippi, Montana, Nebraska, New Hampshire, North Carolina, Ohio, and South Carolina.

A quick note about New Hampshire. The Granite State only taxes individuals who get interest and dividends income, and is phasing out that tax collection. It scheduled for full repeal scheduled on Jan. 1, 2025.

Other notable state income tax changes are the consolidation of some tax brackets in Ohio and Montana, and Georgia's new flat tax.

Older Missouri taxpayers get a new break. The Show Me state is showing them a tax change that effectively exempts Social Security benefits from taxation.

Michigan taxpayers, however, now have a higher individual income tax than they did in 2023.

Wide array of other state tax changes: The Tax Foundation's review of state tax systems also looks at changes to the full spectrum of state taxes. They include sales and use taxes; property taxes; excise taxes; and corporate income tax rates and other business taxes.

Texas, which doesn't have a personal income tax, gets coverage in the business tax area. Lone Star State lawmakers doubled the "no tax due" threshold for the state's franchise tax, meaning more of my fellow Texas business owners now will just have to file an informational return.

All these changes earn the Tax Foundation's article by Manish Bhatt, a Senior Policy Analyst with the organization's Center for State Tax Policy, and Center intern Benjamin Jaros this weekend's Saturday Shout Out, the first of the new year.

In addition to the breakouts by tax categories, the Tax Foundation piece lets us look at the 2024 tax changes by state.

Check it out so you won't be surprised by what your state's taxes have in store for you this new tax year.

You also might find these items of interest:

• State Tax Departments directory
• Florida kicks off 2024 with a sales tax holiday
• 17 states & D.C. collect an estate or inheritance tax

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