State tax changes taking effect this year
States change their tax rules most years, and almost nobody hears about it until a paycheck looks different. Below is every change this site tracks for the current tax year, grouped by what it touches. Each one names the bill it came from, so you can go and read the law yourself if you want to. Most are cuts. A few are not.
Enacted changes to state tax law with effect in the current tax year, grouped by the provision affected and attributed to the enacting instrument. ⚠️ Coverage is not exhaustive: a state absent from this list has not been confirmed as unchanged, only as unsurveyed, and indexation adjustments are included only where a state publishes them as a discrete change. Amounts stated in each summary are as enacted and may be superseded by later legislation or by administrative guidance.
45 changes
Income tax rates and brackets
| State | What changed | Bill | Effect | In force |
|---|---|---|---|---|
| Arkansas | Adopted market-based sourcing and a $250,000 economic nexus threshold for non-resident corporations. | SB 567 | Changes the structure | 2026-01-01 |
| Indiana | Reduced the flat individual income tax rate from 3.00% to 2.95%. | HB 1001 | Cuts tax | 2026-01-01 |
| Kentucky | Reduced the individual income tax rate from 4% to 3.5%. | HB 1 | Cuts tax | 2026-01-01 |
| Louisiana | Repealed the capital stock (franchise) tax. | HB 3 | Cuts tax | 2026-01-01 |
| Mississippi | Reduced the top individual income tax rate from 4.4% to 4% as the final step of the scheduled phase-down. | SB 2001 | Cuts tax | 2026-01-01 |
| Missouri | Repealed the taxation of capital gains on the sale or exchange of specie (gold/silver currency). | HB 754 | Cuts tax | 2026-01-01 |
| Montana | Reduced the top marginal individual income tax rate from 5.9% to 5.65% and expanded the lower bracket. | HB 337 | Cuts tax | 2026-01-01 |
| Nebraska | Reduced the top individual income tax rate from 5.2% to 4.55% as part of the phase-down to 3.99% by 2027. | LB 754 | Cuts tax | 2026-01-01 |
| Nebraska | Reduced the corporate income tax rate from 5.2% to 4.55%. | LB 754 | Cuts tax | 2026-01-01 |
| North Carolina | Reduced the individual income tax rate from 4.25% to 3.99% — the final step of the flat-rate phase-down. | SB 105 | Cuts tax | 2026-01-01 |
| North Carolina | Reduced the corporate income tax rate from 2.25% to 2%. | SB 105 | Cuts tax | 2026-01-01 |
| Ohio | Moved to a flat 2.75% rate on nonbusiness income over $26,050. | HB 96 | Cuts tax | 2026-01-01 |
| Oklahoma | Consolidated six individual income tax brackets into three and reduced the top rate from 4.75% to 4.5%. | HB 2764 | Cuts tax | 2026-01-01 |
| Pennsylvania | Reduced the corporate income tax rate from 7.99% to 7.49%. | Act 2022-53 (SB 345) | Cuts tax | 2026-01-01 |
Standard deductions
| State | What changed | Bill | Effect | In force |
|---|---|---|---|---|
| Michigan | Allowed taxpayers born after 1952 and aged 67+ to claim both the standard deduction and the Social Security deduction (2026-2028). | HB 4961 | Cuts tax | 2026-01-01 |
Exemptions
| State | What changed | Bill | Effect | In force |
|---|---|---|---|---|
| Arizona | Excluded all veterans' pension payments from the income calculation for the exemption income cap. | SB 1749 | Cuts tax | 2026-01-01 |
| Arizona | Increased the business personal property tax exemption from $269,905 to $500,000. | SB 1749 | Cuts tax | 2026-01-01 |
| Indiana | Increased the business personal property tax exemption from $80,000 to $2 million. | HB 1427 | Cuts tax | 2026-01-01 |
| Ohio | Limited the joint filing credit and personal/dependent exemptions to taxpayers with MAGI of $500,000 or less. | HB 96 | Changes the structure | 2026-01-01 |
| Texas | Exempted $125,000 of business personal property appraised value from taxation. | HJR 1 | Cuts tax | 2026-01-01 |
Credits
| State | What changed | Bill | Effect | In force |
|---|---|---|---|---|
| Michigan | Created temporary income tax deductions for tipped income and overtime pay for tax years 2026-2028. | HB 4961 | Cuts tax | 2026-01-01 |
| Montana | Increased the earned income tax credit to 20% of the federal credit. | HB 337 | Raises tax | 2026-01-01 |
| New York | Increased the child tax credit to $1,000 per child under 3 and $500 per child aged 4-16 for 2026-2027. | A 3009 | Raises tax | 2026-01-01 |
| Pennsylvania | Began the phase-up of the NOL carryforward cap to 50% of taxable income for post-2024 losses. | SB 654 | Cuts tax | 2026-01-01 |
Sales tax
| State | What changed | Bill | Effect | In force |
|---|---|---|---|---|
| Arkansas | Exempted food and food ingredients from state sales tax (local sales tax still applies). | HB 1685 | Cuts tax | 2026-01-01 |
| Illinois | Eliminated the 1% statewide sales tax on groceries (local replacement taxes permitted). | HB 3144 | Cuts tax | 2026-01-01 |
| Illinois | Eliminated the 200-transaction economic nexus threshold for remote sellers, keeping the $100,000 sales threshold. | HB 2755 | Changes the structure | 2026-01-01 |
| Maine | Increased the cigarette tax from $2.00 to $3.50 per pack, smokeless tobacco from $2.02 to $3.54, and nicotine/vapor tax from 43% to 75% of cost. | LD 210 | Raises tax | 2026-01-05 |
| Maine | Decreased the adult-use cannabis excise taxes (flower $335 to $223/lb) and increased the cannabis sales tax from 10% to 14%. | LD 210 | Changes the structure | 2026-01-01 |
| Michigan | Increased the gasoline and diesel fuel tax from 31 to 51 cents per gallon. | HB 4183 | Raises tax | 2026-01-01 |
| Michigan | Exempted motor fuel from state sales and use tax. | HB 4180 | Cuts tax | 2026-01-01 |
| Minnesota | Increased the gasoline and diesel excise tax from 31.8 to 32.6 cents per gallon. | statutory indexation | Raises tax | 2026-01-01 |
| Minnesota | Increased the cigarette sales tax from 78.6 to 84.0 cents per pack (total with excise $3.826 to $3.880). | statutory indexation | Raises tax | 2026-01-01 |
| Ohio | Repealed several sales and use tax exemptions (loaner car rentals, refrigerated vending machine food, advertising materials, electronic publishing property, call center telecom services). | HB 96 | Changes the structure | 2026-01-01 |
| Oregon | Increased the fuel tax from 40 to 46 cents per gallon and made diesel subject to the motor vehicle fuel tax. | HB 3991 | Raises tax | 2026-01-01 |
| Rhode Island | Imposed a new 5% tax on short-term rentals of whole homes and increased the statewide hotel tax from 1% to 2%. | H 5076 | Raises tax | 2026-01-01 |
| Tennessee | Replaced the 6% retail sales tax on hemp-derived cannabinoids with a wholesale tax (2 cents/mg, $50/oz flower, $4.40/gal liquid). | HB 1376 | Changes the structure | 2026-01-01 |
| Utah | Decreased the gasoline and diesel tax from 38.5 to 37.9 cents per gallon. | statutory indexation | Cuts tax | 2026-01-01 |
| Washington | Increased the sales and use tax on rental cars from 5.9% to 11.9% and imposed an 8% luxury vehicle tax on vehicles over $100,000. | SB 5801 | Raises tax | 2026-01-01 |
| Washington | Subjected oral nicotine products to the 95% tobacco products tax. | SB 5814 | Raises tax | 2026-01-01 |
Local tax
Everything else
| State | What changed | Bill | Effect | In force |
|---|---|---|---|---|
| Alabama | Imposed a new 10% excise tax on permissible consumable hemp products. | HB 445 | Raises tax | 2026-01-01 |
| Michigan | Imposed a new 24% wholesale tax on cannabis. | HB 4951 | Raises tax | 2026-01-01 |
| Nebraska | Expanded the alternative nicotine products tax to nicotine analogues at 20% of purchase price. | LB 9 | Raises tax | 2026-01-01 |
What this list does not tell you
A state missing from this page has not been checked and found unchanged. It has simply not been checked. And a change listed here is what the law said when it passed — read the bill, or your state's revenue department, before relying on it.
Absence from this list indicates the state was not surveyed, never that it was surveyed and found unchanged — the distinction matters because the two are indistinguishable in a table of this shape. Each entry reflects the instrument as enacted; subsequent amendment, litigation or departmental guidance is not tracked here, and the state revenue authority remains authoritative over this page.
Source: State legislature bill text, cross-referenced against Tax Foundation's January-1 state tax change compilation · as of 2026-01-01 ·view