Michigan lawmakers looking to increase sales taxes to fund road repairs

increase sales taxes

increase sales taxes

Michigan to increase sales taxes to fund transportation

Michigan looks at increasing sales tax to fund road repairs.

Michigan’s roads are in need of major repairs and the state government is considering ways to pay for these renovations. One idea that is gaining popularity with state lawmakers is to increase sales taxes. The current proposal is to increase Michigan’s tax rate from 6 percent to 7 percent. Increasing sales taxes would help the state raise the needed revenue without cutting spending in other areas like education.

This proposal has bipartisan support as both Republican and Democratic lawmakers are working with the state’s governor on this plan. Lawmakers were hoping to get this plan ready by the end of the August session so the tax increase could go to a state vote by November. This doesn’t appear likely so Michigan’s sales tax rate should stay the same for the rest of 2013.

Virginia increased sales tax rate to help pay for roads

increased sales tax rate

increased sales tax rate

Virginia increased sales tax rate to help pay for roads

Virginia increased its sales tax from 5% up to 5.3% to fund new road construction.

Virginia increased sales tax rate from 5% up to 5.3% to fund new road construction. Virginia’s new transportation bill has increased sales taxes across the state to help pay for new roads to relieve traffic congestion. This bill increases taxes by more in Northern Virginia than in Southern Virginia because traffic problems are worse in the north.

The state tax rate increased from 5% up to 5.3%. The bill increased the tax rate in Northern Virginia by an extra 0.7% so the tax rate in Northern Virginia is now 6%. However, the tax rate for food sales will stay the same as the bill made an exception for these sales.

This bill also reduced gas taxes which should cause gas prices to drop by about 6 cents a gallon this summer.

Read more at INSIDENOVA

 

Arkansas increases sales tax rate to help pay for highway improvements

Arkansas increases sales tax rate

Arkansas increases sales tax for road repairArkansas increases sales tax rate by 0.5%. This moves the state rate up to 6.5% from 6.0% and is the first time Arkansas has changed its sales tax rate since 2004. The increased tax rate went into effect July 1st. The state has begun mailing notices to businesses that have not yet adjusted to the correct rate.

Arkansas voters passed this measure so the state would have more money for highway repairs. 70% of the extra sales tax revenues will go towards building and maintaining 4-lane highways while the rest of the money will go towards local city and county construction projects.

Beyond this tax increase, the Department of Finance and Administration made a couple important sales tax notes for Arkansas residents. First, the state will continue its annual sales tax holiday for back to school purchases. This will be held August 3-4. Second, the state has made three new sales tax exemptions: purchases for nonprofit blood donation charities, repair parts and labor for pollution control machinery, and bailing wrap, twine, and a few other products made by farmers.

Compromise on Kansas sales tax increase proposed

Kansas sales tax

Kansas sales tax

Kansas lawmakers continue to negotiate over the upcoming sales tax increase. The Kansas sales tax is set to increase from 5.7 % to 6.3 % in July. The Senate and Gov.  Sam Brownback both want this full increase to go through to pay for a reduction in the state income tax rates. Republicans in the House are opposed.

This week, House Republicans proposed a compromise that would reduce the proposed sales tax increase to 6 %, dropping the total increase by half. House Democrats still oppose any increase to the state’s sales tax rate and want to fund the government with higher income tax rates. House Republicans have locked them out of negotiations so far.

Senate Republicans are currently reviewing this compromise before returning to negotiate with the House. If the two sides can agree on a new rate, it will then go up for an official vote in the House and Senate.

Read more at The Wichita Eagle

Kansas may consider keeping increased sales tax rates

Kansas increased sales tax rates

Kansas increased sales tax rates

The Kansas legislature is likely to revisit plans to repeal the “temporary” sales tax increase enacted two years ago when it comes back into session in mid January.  This means they may keep the increased sales tax rates.

In 2010 then-governor Mark Parkinson and the Kansas legislature increased sales taxes by a half percent to 6.3 percent to avoid having to make cuts to funding for schools and social services. The sales tax increase may become permanent however because income tax cuts set to take effect Jan. 1 will leave the state with a nearly $300 million budget shortfall for 2013.

The proposal, whether it is tied to income tax cuts or not, would face strong opposition from Democrats and Republicans alike because a sales tax freeze could be considered  the equivalent of a tax hike. Lawmakers say shifting the tax burden from income to sales will favor the wealthy and place a disproportionate burden working families because it raises the cost of groceries, clothing and other basic necessities.

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