State Tax News

June 27, 2005

Interesting tax news is unfolding in Hawaii, Michigan and Washington.

In Hawaii, according to the Honolulu Advertiser:

Gov. Linda Lingle has told lawmakers she may veto a bill that would increase the state excise tax to pay for a multibillion-dollar Honolulu transit project and transportation projects on other islands unless she receives assurances that the state won’t get a share of those revenues.

Hawaii’s sales tax system currently ranks 47th in the Tax Foundation’s State Tax Business Climate Index.

Michigan lawmakers are currently studying ways to fix the state’s faltering business climate (see here):

House leaders likely will lay out their plans to restructure business taxes and boost the state’s stagnant economy. An announcement this week would make the Republican-controlled House the last to officially propose plans to reform Michigan’s business tax structure.

Governor Granholm released her plan to fix the state’s Single Business Tax (the only Value Added tax in the country) in January, and other proposals are also on the table. See the Tax Foundation’s analysis of the Michigan situation in a recent fiscal fact.

An increase of 9.5 cents of Washington’s gas tax has created a battle in the state, the Seattle Times reports:

A group called Nonewgastax.com is sponsoring Initiative 912, which would repeal a 9.5-cent gasoline tax passed by the Legislature this year. An opposition group, Keep Washington Rolling, quickly formed to take them on.

A large increase of Washington’s gas tax likely will prove damaging to the state’s already poor sales tax system. According to the Index Washington already has the worst sales tax system in the country.


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