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November 2024 State Tax Measures To Watch Out For

It’s almost November.

Cities, counties and states all have ballot measures impacting a variety of taxes (usually property tax or city taxes). Berkeley, CA has multiple measures including an extension of its sugary beverage tax.

Here are some major state income tax ballot measures to watch out for.

 

CALIFORNIA TAX PROPOSAL

California has a hidden tax proposal on the November ballot.

Prop 5 is called a bond measure. If passed, Prop 5 allows local bonds for affordable housing for low- and middle-income Californians, or for public infrastructure including roads, water, and fire protection to be approved by 55% of voters, rather than current two-thirds approval requirement.

If passed, Prop 5 allows local governments to assess property taxes above 1% to repay affordable housing and infrastructure bonds if approved by 55% of voters instead of current two-thirds approval requirement.

 

WASHINGTON TAX PROPOSAL CAPITAL GAINS TAX

 

Initiative 2109 if passed would repeal the capital gains excise tax imposed on long-term capital assets by individuals with capital gains over $250,000. As a reminder, Washington has no personal income tax.

 

WASHINGTON TAX PROPOSAL LONG-TERM CARE (LTC) TAX

 

Initiative 2124 if passed will allow all employees and self-employed individuals to opt out of paying the mandatory long-term care tax and receiving benefits under Washington Cares, the state's long-term services health care program.

Currently, Washington is the only state with mandatory LTC insurance. Washington initially exempted individuals with their own private long-term care insurance for this tax but this exemption has expired.

CA, NY and PA have proposed a similar tax but these laws did not pass.

In California, unscrupulous insurance agents have been telling their clients that California has a similar tax. It got so bad that the California Insurance Commissioner released this press release “The Department condemns these tactics and will take all steps it deems appropriate to curtail these ploys, up to, and including, legal action. These tactics are not only unfair to the insurers and agents who are acting honestly and ethically, they are also illegal.”

 

 

OREGON TAX PROPOSAL CORPORATE TAX AND PERSONAL TAX REBATES

In Oregon, corporations pay either the corporate income tax or the minimum tax based on gross receipts (not income), whichever is higher.

If Measure 118 is passed, it would increase the minimum tax on corporations with Oregon sales by enacting a 3% tax on sales greater than $25 million in addition to the minimum tax amount already required by law

This tax would be in addition to the Oregon Commercial Activity Tax (CAT) which is also a gross receipts tax.

The measure if passed would authorize the Oregon Department of Revenue to distribute the additional revenue from the corporate tax equally to eligible residents every year. An eligible resident would need to reside in the state for a total of 200 days of the eligibility year.

 

ILLINOIS TAX PROPOSAL

 

Illinois has an income tax advisory question (which is essentially a survey).

The question advises state officials on whether to amend the Illinois Constitution to create an additional 3% tax on income greater than $1 million for the purpose of dedicating funds to property tax relief.

Income isn’t defined as personal income or corporate tax in the measure. However, most commentators believe it is intended for personal income tax.

Illinois has a 4.95% flat tax rate for individual income.

 

COLORADO FIREARMS TAX PROPOSAL

 

If Proposition KK passes, Colorado will levy a 6.5% excise tax on firearms and ammunition manufacturing and sales to be imposed on firearms dealers, manufacturers, and ammunition vendors to be used to fund crime victim services programs, mental and behavioral health programs for children and veterans, and school security and safety programs.

Note this is in addition to the 10 or 11% federal excise tax which depends on the type of firearm. The federal excise tax was first introduced in 1919.

 

The Colorado excise tax is paid by the seller but to avoid a loss of profit, you should expect all sellers to raise their prices on firearms and ammunition by 6.9225% (6.5% percent higher sales price would then be subject to the 6.5% excise tax) 

 

This tax is clearly modeled after California’s recent 11% tax that was effective July 1, 2024.

 

GEORGIA TAX COURT PROPOSAL

 

If Amendment 2 passes, Georgia Amendment 2 would transfer the role of the Georgia Tax Tribunal, which is housed in the executive branch, to the Georgia Tax Court, which would be housed in the judicial branch. If passed, the Georgia Tax Court would have concurrent jurisdiction with superior courts.

 

 

SOUTH DAKOTA SALES TAX PROPOSAL

If Measure 28 passes, the state would prohibit state sales taxes on anything sold for human consumption (i.e. groceries), not including alcoholic beverages or prepared food.

South Dakota is one of three states that tax groceries at the full sales tax rate. As a reminder, South Dakota has no personal income tax.

 

Richard Pon CPA, CFP