Surrounding States Implementing Tax Changes

Provided is a recap of some of the tax-related changes that has taken place in surrounding states:

Virginia - Virginians saw several changes in state tax laws go into effect on July 1 as a result of the sweeping budget and tax reform compromise adopted with bipartisan legislative majorities in 2004. On July 1, 2005, the state sales tax on food was cut by 1.5 percent (from 4 percent to 2.5 percent), and the tax on cigarettes went up by 10 cents per pack. In addition, all Virginians now are able to claim higher exemptions, deductions, and thresholds for filing their tax returns beginning January 1, 2006. Click to read a release from Governor Warner: http://www.governor.virginia.gov/Press_Policy/Releases/2005/Jun05/0629.htm

Ohio - On June 30 Governor Bob Taft signed the FY06-07 state budget, which includes a sweeping overhaul of Ohio’s tax code. Among the tax changes are:
      - Cut personal income tax by 21 percent across-th­e-board over five years
      - Cut the sales tax to 5.5 percent, effective July 1, 2005
      - Phase out the corporate franchise tax over five years
Click to read more information - http://governor.ohio.gov/releases/063005BudgetBill.htm

Kentucky - Earlier this year Governor Ernie Fletcher signed House Bill 272, legislation that reformed Kentucky’s "outdated and unfair tax system." Key among these changes is a provision that will reduce the top income tax rate on corporations, currently 8.25 percent.  This tax rate will be cut to 7 percent this year and then down to 6 percent in 2007. Click to read a press release from Governor Fletcher:
http://governor.ky.gov/mediaroom/pressreleases/050318taxmodsign.htm

Pennsylvania - Governor Edward G. Rendell has proposed a Fiscal Year 2005-06 budget that holds true to his long-standing commitments to continue to modernize the Commonwealth’s business tax structure. The Governor has proposed a dramatic, revenue neutral, reduction in Pennsylvania business taxes based on recommendations from the Business Tax Reform Commission, created last year to study Pennsylvania’s business tax structure.  This budget proposal – along with continuing the phase out of the Capital Stock and Franchise Tax from its current rate of 5.99 percent to 4.99 percent beginning January 2006 – also reflected many of the Commission’s recommendations including reducing the Corporate Net Income tax rate to 7.99 percent.  This would be a 20 percent reduction in the rate of corporate taxation.