State by State News

Iowa

Interest rate – Effective January 1, 2024, the annual interest rate for overdue taxes and refunds in 2024 will be 10% and the monthly interest rate will be at 0.8%. The interest rate was 6% for 2023.

Tax brackets – Effective with tax year 2024, there are two sets of individual income tax brackets. One set applies to married taxpayers filing jointly, and the other set is for all other taxpayers. For each of these two sets there are three tax brackets, as follows:

For married taxpayers filing jointly:

• Over $0 but not over $12,420, the tax is $0 plus 4.40% of the excess over $0;
• Over $12,420 but not over $62,100, the tax is $546.48 plus 4.82% of the excess over $12,420; and 
• Over $62,100, the tax is $2,941.06 plus 5.70% of the excess over $62,100.

For all taxpayers other than married taxpayers filing jointly:

• Over $0 but not over $6,210, the tax is $0 plus 4.40% of the excess over $0;
• Over $6,210 but not over $31,050, the tax is $273.24 plus 4.82% of the excess over $6,210; and 
• Over $31,050, the tax is $1,470.53 plus 5.70% of the excess over $31,050.

Under current law, Iowa will phase down over the next two years to a single tax rate for all taxpayers; there will be two brackets in 2025 with a top rate of 4.82% and a single flat rate of 3.9% for all levels of income effective with tax year 2026.

Georgia

Fuel Tax Suspension – Citing ongoing inflation and uncertain economic conditions, Georgia Governor Brian Kemp signed an executive order that extends the state’s suspension of the collection of motor fuel and diesel taxes and the collection of the state sales tax on locomotive fuel until November 11, 2023 unless otherwise renewed.

Kansas

Corporate tax rate reduction – The corporate tax rate for 2024 will be 3.5% with a 3% surtax on Kansas taxable income for every corporation doing business within or deriving income from Kansas. This is in accordance with legislation effective February 10, 2022, that allows a reduction to corporate income tax rates under certain circumstances. When a qualified business commences construction on a qualified business facility under the Attracting Powerful Economic Expansion (APEX) act and the activity is certified by the Secretary of Commerce, the normal tax rate will be reduced by 0.5% for one year. The Secretary of Revenue received this certification during tax year 2023, which affects the 2024 rate.



Sales tax reduction on food and food ingredients – Effective January 1, 2024, the state sales tax rate on food and food ingredients will be reduced to 2%. Starting on January 1, 2025, the state sales tax rate on food and food ingredients will be reduced to 0%. Retailers of food and food ingredients should make any necessary changes to their point-of-sale systems and other recordkeeping to properly charge the new rate. Any local sales tax rate in effect for the sale of food and food ingredients does not change. 

Massachusetts

On October 4, 2023, Governor Maura Healy signed a tax relief bill that makes a number of changes retroactive to January 1, 2023, except as noted below:

Short-term capital gains rate –The current 12% tax rate on short term capital gains has been reduced to 8.5%.

Estate tax threshold –The tax threshold for estate tax is increased from the current $1 million to $2 million. The tax will now be imposed on revenue above the $2 million threshold. 

Millionaire's tax loophole closed – The law requires married couples that file a joint federal tax return to also file a joint return for their Massachusetts state taxes, closing a potential loophole that could allow married filers to file separately and avoid the 4% surtax on their aggregate income over $1 million.

Child and dependent tax credit – The law combines the Child Care Expense Credit with the Dependent Member of Household Credit and increases the new combined child and dependent tax credit from $180 to $310 per dependent for the current fiscal year and to $440 in fiscal year 2024 onward. 

Student loan repayment assistance –The law exempts employer assistance for student loan repayment from taxable income.

Single sales factor apportionment. Effective January 1, 2025, Massachusetts companies will be subject to a single sales factor apportionment formula based solely on their sales receipts as opposed to the current tax law that subjects businesses to a three-factor apportionment based on location, payroll, and receipts. 

North Carolina

Reduced personal income tax rates – Beginning in 2024, the state’s personal income tax rate will be reduced until it reaches 3.99% in 2026. The 2023 rate is 4.75%, and will move to 4.5% in 2024. Future year rates can be found at the state’s Department of Revenue website by clicking here.

Wisconsin

Conformity to Internal Revenue Code – For taxable years beginning after December 31, 2022, "Internal Revenue Code " means the federal Internal Revenue Code as amended to December 31, 2022, with several exceptions. For taxable years beginning after December 31, 2020, and before January 1, 2023, "Internal Revenue Code " means the federal Internal Revenue Code as amended to December 31, 2020, with certain exceptions. 

For more about State and Local Tax visit MizeCPAs.com