00:00The July 1st Tax Reckoning
00:02What you need to know, July 1st, 2025, ushered in a wave of tax policy shifts across the United
00:09States. This date, significant as the start of the fiscal year for most states, brought a fresh
00:15set of financial realities for both individuals and businesses. The changes were widespread,
00:20touching everything from the pump to your paycheck, and even your online activities.
00:25Let's begin with a look at excise taxes, which saw some of the most prominent adjustments.
00:30This is a significant expansion of the sales tax base. Maryland also saw increases in vehicle
00:36excise tax, cannabis tax, and sports betting tax, along with a new tire fee and the extension of
00:43the state's 6% sales tax to vending machine sales. Colorado expanded its sales tax base to include
00:50interstate telephone and telegraph services, reversing a previous exemption. Kansas discontinued
00:56state property tax levies for specific educational and institutional building funds, now funding
01:02these through the state general fund. This represents a shift in how those services are financed.
01:08Conversely, they created a new sales tax exemption for medical marijuana for lower-income individuals.
01:15New Mexico saw its cannabis tax rate automatically increase from 12% to 13% as part of a multi-year
01:21fee. Staying informed about these changes is crucial for financial planning, whether you're a consumer
01:27or a business owner. Tennessee began taxing vapor products at 10% of the wholesale price,
01:32and Washington notably increased its estate tax exemption, but established a progressive rate
01:38structure with a top rate of 35% for estates exceeding $9 million, making it the state with the highest
01:45tax rate in the nation. In Iowa, unemployment insurance tax system reforms reduced the taxable
01:51wage base and lowered the maximum UI tax rate. Alabama increased its state excise taxes on gasoline
01:58and undyed diesel, and the income tax exemption for overtime pay expired. This means more of your
02:04hard-earned overtime is now subject to state income tax. In California, the cannabis excise tax rate
02:11jumped significantly, and tobacco product taxes other than cigarettes also rose. Gas tax rates were
02:17adjusted, primarily increasing the state excise tax. Illinois imposed higher taxes on sports wagering
02:23and dramatically increased the excise. Tax rate on e-cigarettes from 15% to 45% of the wholesale price.
02:30They also expanded the definition of taxable tobacco products to include certain nicotine products.
02:36And if you're using short-term rentals, prepare for the hotel operator's occupation tax,
02:41to apply to those as well. A particularly noteworthy change occurred in Maryland, which applied a 3%
02:47sales tax to various business-to-business services, including data and IT services. For those watching
02:53their grocery bills, Mississippi brought some good news by reducing its state sales tax rate on groceries
02:59from 7% to 5%. However, the state's excise tax rate on gasoline increased by 3 cents per gallon.
03:07Electric vehicle owners in New Jersey will now find their purchases subject to the general sales tax,
03:13as the exemption for zero-emission vehicles was entirely eliminated and registration fees for EVS
03:19also increased. Hawaii introduced a new road usage charge for electric vehicles, either 0.8 cents per
03:26mile or a flat $50 option for registration renewal. Beyond sales and excise taxes, other areas saw
03:34adjustments. Property tax changes were less common but impactful where they occurred. Finally,
03:40some states adjusted to new markets. These July 1st tax changes underscore a continuing trend of states
03:46adapting their revenue streams to evolving economies, new technologies, and shifting social priorities.
03:52money expires.
03:53money expires.
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