The Tax Foundation is the nation’s leading independent tax policy research organization. Since 1937, our principled research, insightful analysis, and engaged experts have informed smarter tax policy at the federal, state, and local levels.
The Tax Foundation is the nation’s
leading independent tax policy
research organization. Since 1937,
our research, analysis, and experts
have informed smarter tax policy
at the federal, state, and global
levels. We are a 501(c)(3) nonprofit
©2020 Tax Foundation
Creative Commons CC-BY-NC 4.0
Editor, Rachel Shuster
Designer, Dan Carvajal
1325 G Street, NW, Suite 950
Washington, DC 20005
Tax Trends at the Dawn of 2020
• State tax changes are not made in a vacuum. States often adopt policies after
watching peers address similar issues. Several notable trends in tax policy
have emerged across states in recent years, and policymakers can benefit
from taking note of these developments.
• The enactment of the federal Tax Cuts and Jobs Act (TCJA) in late 2017
expanded many states’ tax bases and drove deliberations on tax conformity.
By the end of 2019, all but four states with individual or corporate income
taxes (or, in the case of Texas, a gross receipts tax that relies on federal
definitions) updated their conformity date to reflect a post-TCJA version of
the Internal Revenue Code.
• Many states incorporate the new federal tax on Global Intangible Low-Taxed
Income (GILTI) by default, which often positions them to meaningfully tax
international income for the first time and, in many cases, raises serious
constitutional questions. In 2018, few states had issued guidance on their
approach to GILTI, but by the end of 2019, 17 states taxed GILTI and had
issued guidance to that effect, and another seven states and the District of
Columbia may tax GILTI but have yet to offer guidance to taxpayers.
• Five states cut corporate income taxes in 2019, and another two have
reductions effective on, or which will be backdated to, January 1, 2020.
• Six states cut individual income tax rates in 2019, three of them retroactive
to 2018 and designed as a response to the base-broadening provisions of the
• The U.S