State and Local Tax Decisions Abound

No gas tax holidays in Oregon or Washington, but maybe one in Pennsylvania.  Governors Kate Brown of Oregon and Jay Inslee of Washington will not pause local and state fuel taxes. However, Pennsylvania’s Senate Democrats did call for a three-month gas tax holiday. President Biden asked states to suspend their fuel taxes to align with his proposed  three-month federal gas tax holiday

Illinois will suspend its grocery tax for one year. The 1 percent tax on groceries will be halted starting on July 1 and could save consumers $400 million through July 1, 2023. 

Massachusetts’ millionaires’ tax can be on the ballot in November. The state’s high court ruled this week that the referendum’s description of the Massachusetts Income Tax for Education and Transportation Amendment is not misleading, so the measure can appear on the ballot in November. It would levy an additional 4 percent tax on taxable income over $1 million. Opponents argued the ballot question did not fairly inform voters of how revenue from the tax would be spent. 

Los Angeles developers fight a tax on multimillion-dollar properties. The Los Angeles City Council approved a November ballot initiative to increase the current transfer tax rate from 0.45 percent to 4 percent on the sales of residential and commercial properties valued at between $5 million and $10 million. Sales exceeding $19 million would be taxed at 5.5 percent. The local real estate industry argues that the tax will make housing less affordable in the nation’s second-largest city.

Austin repeals its tampon tax. The Austin City Council voted to repeal the sales tax on menstrual products and diapers, which it says “are necessary to daily life for millions of Texans, and these taxes create an undue and inequitable burden on those who purchase them.” The city will try to convince the Texas legislature to scrap the tax statewide.  

In case you missed it: TPC’s Bill Gale testified on taxes and growth. He appeared before the House Select Committee on Economic Disparity and Fairness in Growth and highlighted two major conclusions. First, tax cuts in general, and tax cuts for high-income households in particular, have very small impacts on economic growth. Second, there are sound ways to reduce economic disparities without slowing growth. They include taxing capital gains at death, eliminating the section 199A deduction on pass-through business income, converting the estate tax to an inheritance tax, and raising funding for the IRS.


For the latest tax news, subscribe to the Tax Policy Center’s Daily Deduction. Sign up here to have it delivered to your inbox weekdays at 8:00 am (Mondays only when Congress is in recess). We welcome tips on new research or other news. Email Renu Zaretsky at

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