Today’s Monday Map shows which states benefit from the federal income tax deduction for state taxes. Taxpayers can elect to deduct either state income or sales taxes, but not both; in most states, the income tax deduction is worth more. New Yorkers deducted state taxes worth 6.16% of their income, to take the top spot. Alaska, where state income and sales tax deductions amounted to only 0.26% of the state’s income, comes in last. (Alaska has no income tax, no state sales tax, and small local sales taxes.)
Click on the map to enlarge it.
View previous Monday maps here.
Georgia Governor Nathan Deal (R) had this to say in his 2012 State of the State Address:
First, I am proposing the elimination of the sales tax on energy used in manufacturing, a move that will align us with many of our top competitors. This will have a dramatic impact on manufacturers’ overall cost structure and vastly improve the competitive position of our producers.
Secondly, I am proposing sales and use tax exemptions for construction materials used in projects of regional significance, giving us an important tool when competing with other states for projects creating large numbers of jobs.
A third piece, we are proposing to restructure Georgia’s Job Tax Credits and Quality Jobs Tax Credit programs. The programs now in place was created in 1994, at a time when the competitive landscape was far different than the one our businesses operate in today. We will modernize our job tax credits to better incentivize small business growth and to help every Georgia community compete with their regional peers.
The first two steps are good moves.