Massachusetts Gov. Healey signs into law the state’s first tax cuts in two decades. The $1 billion tax relief plan will make the state’s child and dependent tax credit the largest in the country, increasing it from $180 per dependent to $310 in tax year 2023 and to $440 in 2024 and beyond. Residents will also receive a uniform tax estate tax credit of $99,600 and the tax will not apply to estates worth less than $2 million. The state’s earned income tax credit will also increase, climbing from 30 percent to 40 percent of the federal credit.
Ohio’s House Democrats want the state legislature to pass a new tax credit. Two state representatives want action on the “Thriving Families Tax Credit” legislation. The bill would establish a tax credit to offset the lapse in pandemic-era benefits. The credit would amount to $1,000 per year per child ages 0 to 5, and $500 annually per child ages 6 to 17. The full benefit would be available to families with an annual household income of up to $65,000. The amount would decrease for those earning between $65,000 and the top eligible income amount of $85,000 per year. The sponsors estimate that 986,000 urban, suburban, and rural families would qualify for the credit.
Arkansas tax revenue comes in 6.9 percent above forecast. Total tax revenue from July through September 2023 was $2.057 billion. Although that’s down 1.1 percent from the first quarter of the prior fiscal year, it’s still above what state forecasters expected.
Should taxes be withheld from all online sports bet winnings? Now that three dozen or so states and Washington, DC sanction some form of sports gambling, TPC’s Tax Hound Renu Zaretsky explores whether there’s a better way to tax winnings and encourage more responsible betting behavior.
Italy’s windfall tax on banks may not generate as much revenue as expected. The country’s proposed law, which would levy a 40 percent tax on banks’ net interest margins, would give banks the option of using cash to keep their balance sheet healthy in lieu of paying the tax. Reuters reports that banks could set aside reserves equal to as much as 2.5 times the proposed tax. Although this could reduce the revenue Italy could collect, experts say the provision would improve the financial footing of banks that use the option.
And in Sweden: Temporary tax on bank profits blocked. The nationalist Sweden Democrats, the country’s second largest political party are blocking a proposal to levy a temporary tax on Swedish bank profits. A spokesman for the Swedish Democrats, which supports the plan, told Bloomberg that the proposed tax on lenders was not in the budget bill we were involved in and negotiated.
Tax policy changes in Portugal and Iceland will have an impact on some newcomers. Portugal’s government, plans to end its tax break for new residents in an effort to help address its affordable housing crisis. In 2024, the country will no longer offer lower tax rates for residents in their first ten years after moving to Portugal. Meanwhile, Iceland’s government released more details on its plans to levy higher taxes on tourists to protect the local environment. The tax in 2024 will target cruise ship passengers and hotel stays. Draft legislation is expected soon.
For the latest tax news, subscribe to the Tax Policy Center’s Daily Deduction. Sign up here to have it delivered to your inbox weekdays at 8:00 am (Mondays only when Congress is in recess). We welcome tips on new research or other news. Email Renu Zaretsky at [email protected].
