States cut taxes in 2024

Fifteen states are reducing either individual or corporate income taxes this year, with some states trimming both individual and corporate taxes, among 34 states starting the year with significant tax changes.

The Tax Foundation reported that most of the major tax changes take effect on Jan. 1, although for some states they take effect with the beginning of their fiscal year on July 1.

The dozen states with individual income tax rate reductions taking effect in 2024 include Arkansas, Connecticut, Georgia, Indiana, Iowa, Mississippi, Montana, Nebraska, New Hampshire (interest and dividends income only), North Carolina, Ohio, and South Carolina. Ohio and Montana will consolidate some of their tax brackets, while Georgia will adopt a flat tax.

Sometimes tax changes go in the other direction, up, and Michigan taxpayers will be facing a higher individual income tax this year than last year. 

Among other notable state tax changes, Montana and Massachusetts have codified their filing status requirements, while Missouri has essentially exempted Social Security payments from being taxed.

On the business side, six states — Arkansas, Iowa, Kansas, Nebraska, New Jersey and Pennsylvania have reduced their corporate income tax rates. In Connecticut, pass-through business owners can now opt to pay their individual income taxes at the entity level or as individuals, as the state has now gotten rid of the unique requirement to pay taxes at the entity level. Florida business taxpayers are getting a lower tax rate on rent payments. Ohio increased its gross receipts threshold for the Commercial Activity Tax, while Texas is doubling the "no tax due" threshold for its franchise tax. New Hampshire has decided to decouple its state tax code from Section 167(j) of the Internal Revenue Code. 

When it comes to property taxes, five states are offering tax relief for personal and business property owners, homeowners, and/or renters, including Colorado, Indiana, Pennsylvania, Texas and Wisconsin.

There are also some changes on excise taxes in a handful of states, with Oregon and Utah increasing the excise tax rate for motor fuel, Kentucky levying a new tax on electric vehicles, Maine and Hawaii updating their excise taxes on tobacco and/or e-cigarettes.

For the full list of changes and rates state by state, see the Tax Foundation website.