News Briefings - State Taxes

The following article was taken from the 11/10/2008 issue of State & Local Taxes Weekly.

11/10/08 -- Voters decide tax-related state ballot questions

by Matthew G. Pickelle, Esq. (RIA)

Taxpayers in various states voted on tax-related ballot questions on November 4, 2008. The unofficial results, as of the time of this publication, are listed below:

Alabama. Alabama voters approved Amendment No. 3, a proposal to amend the Alabama Constitution of 1901 to authorize the levy of an ad valorem tax for public school purposes in the portion of the City of Madison located in Limestone County. This tax is intended to equalize the tax rate in that portion of the city within Limestone County with that portion of the city within Madison County. The amendment also establishes the manner of conducting elections with respect to the tax.

Arizona. Arizona voters approved Proposition 100, a proposal to amend the Arizona Constitution to prohibit the state or any county, city, or town from directly or indirectly imposing any new tax, fee or other assessment on the sale, purchase, transfer or other conveyance of any interest in real property.

California. Los Angeles voters approved Measure R, which authorizes a 0.5% increase in the sales tax in Los Angeles County to fund transportation improvements over the next 30 years. The 0.5% increase will raise Los Angeles County's sales tax from the current 8.25% to 8.75%, when it takes effect July 1, 2009. Under current law, the Los Angeles County Metropolitan Transportation Authority (MTA) is authorized to impose transactions/use tax at a rate of 0.5% for six and one-half years or less. Measure R was placed on the ballot as a result of the state signing into law L. 2008, A2321, which required voter approval by a two-thirds majority of voters.

Sacramento voters approved Measure O, which replaces the Telephone User Tax with a Communications User Tax. The changes reduce the tax imposed on cellular phone service and land-line service from 7.5% to 7%, but expands the services tax at the 7% rate to include additional telecommunications services not previously taxed, including voice, audio, video, and data services such as Voice Over Internet Protocol (VoIP), text messaging, and instant messaging, regardless of the technology or mode of transmission, including by public switched network, fiber optic, coaxial cable, power line, broadband, digital subscriber line, and wireless transmission, and ancillary telecommunication services such as voice messaging, directory assistance, and conference-bridging services.

Colorado. Colorado voters rejected Amendment 51, an initiative that would have increased the state sales and use tax to fund long term services for persons with developmental disabilities.

Voters rejected Amendment 52, an initiative that would have amended the allocation of revenues from the state severance tax imposed on minerals and mineral fuels other than oil shale that are extracted in Colorado for tax years beginning on or after July 1, 2008.

Voters rejected Amendment 58, a proposal to eliminate a property tax deduction utilized by the oil and gas industry against the state's severance tax.

Voters rejected Amendment 59, a ballot proposal requiring that any income tax revenue Colorado would otherwise be required to refund to taxpayers pursuant to the constitutional limit on state fiscal year spending be instead allocated to the state education fund.

Florida. Florida voters approved Amendment 3, which authorizes the Florida Legislature to prohibit the consideration of improvements and changes to property that increase resistance to wind damage, as well as the installation of renewable energy source devices when assessing the property's value for ad valorem taxation.

Voters also approved Amendment 4, which (applicable to property taxes beginning in 2010) will exempt land that is permanently set aside for conservation from all property taxes and will allow land that is being used for conservation purposes, but which has not been permanently set aside, to be taxed according to its conservation use.

Voters approved Amendment 6, which amends the Florida Constitution to provide that the ad valorem tax assessment of waterfront property will be based on its current use. This includes land used primarily for commercial fishing purposes, land used for vessel launches to which the public has access, marinas and drystacks that are open to the public, water-dependent marine manufacturing facilities, and marine vessel construction and repair facilities.

Voters rejected Amendment 8, which would have amended the Florida Constitution to require the legislature to authorize local option sales tax levies for counties, require these levied ad valorem taxes to go towards community college funding, and require counties to get voter approval of the levies.

Georgia. Georgia voters approved a constitutional amendment (HR 1276, Res. 702) allowing the General Assembly by general law to preserve, conserve, and protect the state's forests through the special assessment and taxation of certain forest lands. With this approval, H1211, The Georgia Forest Land Protection Act of 2008, signed by Governor Perdue on May 8, 2008, also becomes effective.

Georgia voters also approved a constitutional amendment (SR 996, Res. 777) allowing school districts to change how education tax dollars are used.

Kansas. Kansas voters in Johnson County approved county ballot Question No. 2, which creates the Johnson County Education Research Triangle Authority and imposes a 0.125% retailer's sales tax in the county for the purpose of supporting projects and programs related to: (1) medical education and life sciences and cancer research programs at the Johnson County locations of the University of Kansas Medical Center; (2) research and education programs in animal health and food safety and security at the City of Olathe location of Kansas State University; and (3) undergraduate and graduate programs at the Edwards campus of the University of Kansas in the City of Overland Park, with the revenue from the tax being distributed in equal shares to the three institutions and used for building construction, academic and research program development and growth, facility and staff recruitment and retention, and operation and maintenance.

Louisiana. Louisiana voters rejected Proposed Constitutional Amendment No. 4, which would have increased the maximum amount of severance tax revenue from natural resources (other than sulphur, lignite, and timber) that is remitted to the parish governing authority where the severance occurs to $1,850,000 from $850,000 effective July 1, 2009, and additionally to $2,850,000 effective July 1, 2010.

Voters also narrowly rejected Proposed Constitutional Amendment No. 5, which would have authorized the transfer of the special assessment level for property tax purposes on property that is sold to or expropriated by a federal, state, or local governing authority or political subdivision to new property acquired by the owner who was entitled to the special assessment level and met certain conditions.

Maine. Maine voters approved a People's Veto that repeals the recently-enacted syrup and soft drink tax; repeals increases in taxes on wine, hard cider, and malt liquor tax; and repeals a health access surcharge on paid claims. The provisions that imposed these taxes and tax increases were enacted earlier this year by L. 2008, H1608.

Maryland. Maryland voters in Prince George's County rejected county ballot Question F, which would have increased the sales and use tax on gross receipts from telecommunications service within the county from 8% to 11% to increase funding available to the Prince George's County Board of Education.

Massachusetts. Massachusetts voters rejected Question 1, a law proposed by Initiative Petition, which would have reduced the state personal income tax rate to 2.65% for all categories of taxable income for the tax year beginning on or after January 1, 2009, and would have eliminated the tax for all tax years beginning on or after January 1, 2010.

Minnesota. Minnesota voters approved a constitutional amendment to increase the state's sales tax by 0.375% to pay for environmental and cultural programs. The tax increase takes effect on July 1, 2009 and expires June 30, 2034.

Missouri. Missouri voters approved Proposition A, which increases the casino gambling tax from 20% to 21% on adjusted gross receipts received from gambling games.

Montana. Montana voters approved a referendum that will extend the property tax levy that supports the state university system, effective on January 1, 2009 and terminating January 1, 2019.

Nevada. Nevada voters approved ballot question No. 3, which requires the legislature to find the social and economic purpose and benefits of property tax or sales and use tax exemptions before allowing them and requires that any exemption will expire on a specific date.

Nevada rejected ballot question No. 4, which would have authorized the legislature to amend or repeal any provision of the Sales and Use Tax Act without voter approval whenever necessary to carry out any federal or interstate agreement for the administration, collection, or enforcement on certain aircraft and aircraft components.

North Dakota. North Dakota voters rejected Constitutional Measure No. 1, which would have established a permanent oil tax trust fund from oil and gas tax revenue exceeding $100 million per biennium, adjusted for inflation.

Voters rejected Initiated Measure No. 2, which would have lowered corporate income tax rates by 15% and the adjusted state individual income tax rates by 50% for tax years beginning after December 31, 2008.

Oklahoma. Oklahoma voters supported State Question 735, and thus established an exemption for household personal property of disabled veterans and their surviving spouses. The injured veteran must have been honorably discharged from active service, be an Oklahoma resident and the head of the household, and have a disability that resulted from military action, accident, or disease that occurred or was contracted in active service. The U.S. Department of Veterans Affairs must certify the disability.

Voters also approved State Question 741 to require that property tax exemption applications be filed in the year for which the exemption is requested. The change is designed to prevent retroactive exemption claims that could cause judgments against counties and concomitant property tax increases to satisfy those judgments.

Oregon. Oregon voters approved ballot measure No. 56, which amends the Constitution to provide that May and November property tax elections are to be decided by a majority of the voters voting.

Oregon rejected ballot measure No. 59, which would have allowed an unlimited deduction for federal income taxes on individual taxpayers' Oregon income-tax returns.

Washington. Washington voters in King, Pierce and Snohomish counties approved Proposition No. 1, which increases sales and use taxes in these counties by an additional 0.5%.

Learn more about our State and Local Tax Research product line.