Some states still face tight budgets after years of recession and slow recovery. Increasingly, they are turning to tax hikes to make up for the shortfalls. If you live in one of these states, the taxes will hit you in different places — at the pump, in the store, or on your tax return.
In Connecticut, sales of clothing and shoes under $50 are no longer exempt from the state’s 6.35% sales tax, and sales of yachts and other luxury items will now be taxed at 7.75%, up from 7%. High-income residents will be hit hardest by the tax changes, as the state added two new top income tax brackets and increased the highest rate to 6.9%.
Kansas has increased its sales tax by 0.35 percentage point to 6.5% in an effort to close a $400-million budget gap. Coupled with local sales taxes, Kansas now leapfrogs California to have the eighth-highest sales tax in the U.S., according to the Tax Foundation. Kansas residents also pay more for cigarettes following a 50-cent increase on each pack of 20.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Vermont aims to close a $100-million budget shortfall by lowering the amount millionaires can deduct on income tax returns. The Green Mountain State also raised the cigarette tax by 33-cents a pack and removed an exemption for soft drinks from the 6% sales tax.
Struggling to get enough money from Congress to repair crumbling roads and bridges, many states are turning to gasoline taxes for funding. South Dakota, Utah, Idaho, Iowa and Nebraska are all raising their gas taxes by between 5 cents and 10 cents per gallon. More states are sure to follow in the years ahead.
There are plenty more states where taxes are going up. See if yours is one of them.
-
Three Critical Tax Changes Could Boost Your Paycheck in 2026Tax Tips The IRS predicts these tax breaks may change take-home pay in 2026. Will you get over $1,000 in tax savings?
-
What’s the New 2026 Estate Tax Exemption Amount?Estate Tax The IRS just increased the exemption as we enter into a promising tax year for estates and inheritances.
-
IRS Updates 2026 Tax Deduction for People Age 65 and OlderTax Changes Adjustments to the extra standard deduction can impact the tax bills of millions of older adults. Here are some new amounts to know for 2026.
-
IRS Reveals New 2026 Child Tax Credit and other Family Credit AmountsTax Credits Key family tax breaks are higher for 2026, including the Earned Income Tax Credit and the Adoption Credit. Here's what they're worth.
-
Standard Deduction 2026 Amounts Are HereTax Breaks What is the standard deduction for your filing status in 2026?
-
Claiming the Standard Deduction? Here Are Five Tax Breaks for Retirement in 2025Tax Tips If you’re retired and filing taxes, these five tax credits and deductions could provide thousands in relief (if you qualify).
-
New Tax Rules: Income the IRS Won’t Touch in 2025Income Taxes From financial gifts to Roth withdrawal rules, here’s what income stays tax-free under the new Trump 2025 tax bill, and some information on what’s changed.
-
Three Popular Tax Breaks Are Gone for Good in 2026Tax Breaks Here's a list of federal tax deductions and credits that you can't claim in the 2026 tax year. High-income earners could also get hit by a 'surprise' tax bill.
