On Jan. 1, eight states will reduce individual income tax rates, and Ohio will transition to a single-rate income tax, eliminating the higher rate for its top tax bracket, according to a new report from the Tax Foundation. They are among the 43 states that will experience notable tax changes in the new year.
Oklahoma, for its part, is condensing its tax bracket structure, reducing its top marginal rate and adding a 0% tax bracket.
The report noted that state tax changes generally take effect either on Jan. 1 or on July 1, the start of the fiscal year. Major tax rate changes are typically implemented effective Jan. 1, either prospectively or retroactively.
The Tax Foundation — a research group that believes lower, simpler taxes are good for the economy — said tax competition across the states is evident, following a wave of pro-growth tax reforms this year. States continue to embrace reforms intended to provide a competitive edge and promote continued economic growth in the years ahead, it said.
See the gallery for the states that will reduce individual income tax rates on Jan. 1.
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