Second installment in the nonpartisan 50-State Scan research series explores impacts of tax policy on state economies

LEXINGTON, Ky. (Oct. 2, 2025) — The Council of State Governments (CSG) released “Surveying the Tax Policy Landscape: A 50-State Review,” the second installment in its nonpartisan 50-State Scan research series. The report examines how tax policy decisions at the federal, state and territorial levels directly shape household budgets, business investment and the long-term stability of state economies.

With more than 40 states and U.S. territories enacting tax reforms this year, the new report builds on earlier state tax system studies to inform state officials about shifting economic conditions, rising costs of living and evolving budget priorities. It also features maps and charts comparing tax systems across the four CSG regions, providing a clearer view of trends and strategies emerging in states facing similar challenges.

“The CSG 50-State Scan gives policymakers a clear, comparative view of how their colleagues across the country are responding to policy challenges,” said David Adkins, executive director/CEO of The Council of State Governments, a former chair of the Kansas House of Representatives’ Committee on Taxation. “It’s one more way CSG helps state officials learn from one another and strengthen governance in every state.”

Launched earlier this year with a report on government efficiency and accountability, the CSG 50-State Scan is a four-part series providing nonpartisan, state-by-state analysis of today’s top policy priorities. Each installment offers timely, transparent insights into the tailored strategies states are developing to strengthen governance.

This second installment of the CSG 50-State Scan highlights key tax policy findings, including:

• Individual Income Taxes: Twenty-eight states have cut rates since 2021, with many shifting to flat taxes.
• Corporate Taxes: States such as Louisiana, Nebraska, North Carolina and Pennsylvania lowered corporate rates, while others raised them or established specialized fees.
• Sales Taxes: States including Alabama, Kansas and Oklahoma reduced or eliminated grocery taxes. Others, such as Florida and California, expanded sales tax holidays or exemptions.
• Targeted Relief & Incentives: Multiple states expanded credits and deductions to ease household costs and spur economic growth, including Rhode Island’s retirement income exemption, New Mexico’s health care worker credit, and New Jersey’s technology investment incentives.
• Revenue Burden & Stability: Tax burdens vary from under $3,000 per capita in Alaska to over $12,000 in New York and Connecticut.

The report also explores emerging themes, including aligning tax systems with local economic conditions, assessing the impact of federal policy changes, planning for fiscal stability and weighing trade-offs, such as the effects of flat income taxes.

To access the full CSG 50-State Scan series, click here.