November 2nd was a big day for state taxes. There were several state tax initiatives on the ballot in many different states. Here are the results of the more significant state tax initiatives for 2010.
Washington Income Tax Initiative 1098
Washington state's initiative 1098 failed with 65% of people voting no. Initiative 1098 was one of the more widely known and controversial initiatives on state ballots this year. This proposed law would have imposed an income tax of 5% on individuals making $200,000 or more and couples making $400,000 or more (9% for individuals making $500,000 or more and couples making $1 million or more). The millionaire tax initiative would have also reduced Washington’s high property taxes and business and occupation taxes (a type of income tax) for small businesses. The extra tax revenue would have gone to a special trust fund for education and health services.
This would have been a major change for Washington, a state without an income tax, and was met with stiff opposition. The opposition flooded airwaves with advertisements that used a part of the Washington state constitution to claim that lawmakers could make the income tax applicable to everyone after two years. This may have been a major reason for the measure’s failure, despite the fact that initiative 1098 expressly stated, “The excise tax rates…of this act may not be increased for any income level without a majority vote of the legislature and submission of the changes to the people for approval.” (WA initiative 1098, section 1004).
Other Washington State Initiatives
- Washington Initiative 1053 passed. This initiative reinstates the supermajority requirement for tax increases.
- Washington Initiative 1107 passed. This initiative repealed state taxes on candy, bottled water, and a temporary tax on soda.
California State Tax Initiatives
California’s Proposition 19, which would have legalized and taxed marijuana, was another state tax proposal that was heavily talked about and highly controversial. But California actually had three other significant tax proposals on the ballot as well:
- Proposition 19 failed. This proposed law would have legalized and taxed marijuana.
- Proposition 24 failed. This legislation would have repealed corporate tax breaks that were slated to go into effect in 2010 and 2012.
- Proposition 25 passed. This new law allows budgets and related legislation to be passed with a simple majority of the state legislature instead of two-thirds. This law also requires state legislatures to forfeit their pay in years when they have not passed a budget in a timely manner.
- Proposition 26 (or the Stop Hidden Taxes Initiative) passed. This law requires a two-thirds supermajority vote in the state legislature for several types of fees, charges, and tax revenue allocations.
Colorado State Tax Initiatives
Colorado’s proposed tax changes, called the “evil three” by opponents who argued they would cripple the state and hurt public education, all failed.
- Amendment 60 failed by an overwhelming 75% to 25%. This was an amendment to the Colorado state constitution which would limit property tax increases and reverse past tax increases.
- Amendment 61 failed. This Colorado state constitutional amendment would have prohibited borrowing by state and local governments and would have required local governments to obtain voter approval for their debt
- Proposition 101 failed. This proposition would have lowered the state's income tax to 4.5%, then eventually lower it to 3.5%. This proposed law also would have made vehicle leases and rentals tax exempt, reduced car registration, license, and title fees to $10 per year, and repealed the alternative minimum tax.
Massachusetts State Tax Initiatives
Massachusetts had two major state tax initiatives on the ballot:
- Question 1 passed. This eliminated state sales taxes on alcohol and alcoholic beverages if that alcohol or its importation into the state was already subject to a separate excise tax under state law.
- Question 3 failed. This would have reduced the sales tax from 6.25% to 3%.
Missouri State Tax Inititatives
Missouri had three major state tax initiatives on the ballot:
- Amendment 2 passed. This provided that Missouri former prisoners of war who use their home as their primary residence are completely exempt from property taxes. The veterans must also have a complete service-related disability.
- Amendment 3 passed. This amendment to Missouri’s constitution prohibits the state or localities from imposing a tax, including a sales tax, on any sale or transfer of real estate.
- Proposition A passed. This law limits local income taxes and requires voter approval to renew them
Virginia State Tax Initiatives
Virginia voters passed a law allowing localities to create their own income limitations for property tax exemptions for the elderly, as well as these two tax initiatives:
- Question 2 passed. Virginia’s state constitution will now be amended to require the state to provide a real property tax exemption for veterans who have a 100% service-connected permanent and total disability. Note that this does not apply to Virginia’s personal property tax (also known as the car tax).
- Question 3 passed. This new legislation increases the state’s rainy day fund from 10% to 15% of average annual tax revenue from income and sales taxes.
More information: use the map on Ballotpedia.com to check the results of your state’s tax initiatives.
Source: Ballotpedia.com and the Tax Foundation. The election results in this article may not be final and could be subject to change.