Let’s look at State Inflation Tax Cuts

What is happening? States are cutting taxes to provide inflation relief to their residents, such as:

• Florida will have a tax holiday on its 25.3 cent-per-gallon tax on gasoline in October
• Georgia is not collecting its gas tax from March through August
• Tennessee is lifting sales taxes on groceries for the month of August
• Kansas and Virginia are eliminating their sales taxes on groceries
• Mississippi is reducing its income tax

Why is this important? States are also offering rebates like:

• Georgia is offering rebates up to $250 for single income tax filers or $500 per household
• South Carolina rebates ranged from $100 to $800, depending on the filer’s 2021 tax liability
• Colorado single tax filers will get a $750 rebate in August, while join filers are eligible for $1,500.

How will this be important? Economists are watching the impact on states that offer tax relief and those that do not.

Governing | Will Alabama Fall Behind Without Tax Relief to Offset Inflation?