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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
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State Tax Changes Effective
July 1, 2020
• Nineteen states had notable tax changes take effect on July 1, 2020.
Indiana had the lone corporate income tax change, with the rate decreasing
from 5.5 to 5.25 percent.
• Two states, Louisiana and Mississippi, began requiring marketplace facilitators
to collect sales and use taxes.
Illinois now requires remote sellers to collect state and local sales taxes,
rather than use taxes.
• North Carolina now requires marketplace facilitators to collect local meals
• New sales tax exemptions took effect in Virginia and Washington.
• As part of a gradual phaseout, New Jersey reduced the sales tax rate on
• Utah, Virginia, and Wyoming have newly begun taxing vapor products, and
Kentucky’s new vapor tax is scheduled to take effect on August 1.
• Virginia doubled its cigarette tax from 30 to 60 cents per pack.
• Three states—California, South Carolina, and Virginia—increased their
statutory excise tax rate on motor fuel.
Iowa reduced its excise tax rate on certain ethanol-based motor fuels.
• Colorado, North Carolina, and Virginia modified various transportation-
related user fees.
Senior Policy Analyst
TAX FOUNDATION | 2
Although the majority of state tax changes take effect at the start of the calendar year, some are
implemented at the beginning of the fiscal year. Nineteen states had notable tax changes take
effect on July 1, 2020, which is the first day of fiscal year (FY) 2021