The 2022 state legislative sessions have come to an end in most states that were in session this year. While no state enacted major tax reform, many states enacted a wide variety of tax law changes impacting businesses and individuals. With states reporting revenues beyond prior estimates due both to surprisingly robust tax receipts and federal funding in response to the COVID-19 pandemic, the overarching theme of the changes was to provide tax relief to both individuals and businesses and to incentivize businesses and individuals to remain in, or move into, the state. This relief includes cutting tax rates (namely income tax), as well as targeted tax credits and incentives to support business development.

In addition, states are continuing their slow and steady move to single sales factor apportionment and market-based sourcing for corporate income tax purposes. At a faster pace, states are enacting elective pass-through entity taxes as a workaround to the federal limit on the state and local tax deduction and sales and use tax (or other transactional taxes) on peer-to-peer car sharing. They are also regulating and taxing sports betting.

The attached Tax Alert provides a summary of select state legislative changes enacted in 2022.

———————————————

Published by NTD’s Tax Technical Knowledge Services group; Jennifer A Brittenham, legal editor

———————————————
ATTACHMENT

SALT Legislative Roundup