States take action on tax rebates

June 7, 2022

Keith Goble


Tax relief in the form of rebates continues to be a topic in states around the country to provide relief from higher costs for goods and services.

Colorado takes action

Gov. Jared Polis announced recently that the state would soon send out rebate checks to many residents.

Colorado law limits the amount of revenue the state can retain and spend. Surplus revenue must be refunded to taxpayers.

The governor initially announced that Colorado taxpayers would receive $400 this summer. Joint filers would collect $800. He has since stated that taxpayers actually would receive a minimum of $500. Joint filers would receive at least $1,000.

The increase is attributed to higher state revenue estimates.

“People are paying more for everyday items like gas, groceries and rent through no fault of their own,” Polis said in a news release.

To be eligible for a rebate check, full-time residents must have filed their 2021 tax returns by June 30, 2022. All eligible income tax filers will receive their rebate directly in the mail in August or September.

Fuel tax relief

The Democratic governor previously signed into law a bill to delay an upcoming fuel tax increase.

One year ago, Polis signed into law a massive transportation funding deal that included a new 2-cents-per-gallon fee on gas and diesel. The fuel tax increase was scheduled to take effect on July 1.

Polis said earlier this year that “now is not the time” to increase fuel taxes.

At the governor’s urging, HB1351 was approved by state lawmakers to delay implementation of the new tax for six months to Jan. 1.

Delaying implementation of the new fuel tax is estimated to result in a $29.9 million hit to state revenue.

North Carolina

The pursuit of a tax rebate also is underway at the North Carolina statehouse.

Sponsored by multiple Senate Democrats, the bill would provide money for licensed adult drivers in the state.

The bill, SB897, reads that a gas tax rebate would be provided “to assist families to pay for the high costs of gas and increased food prices associated with the increased fuel costs.”

Rebates in the amount of $200 would be sent to residents over age 18 with a valid North Carolina driver’s license. The rebates would be issued as a check or a debit card.

Sen. Michael Garrett, D-Greensboro, said the bill would provide much-needed relief.

“We’re all seeing rising costs everywhere we turn, from the grocery store to the gas pump,” Garrett posted on social media. “This proposal would give every N.C. driver a gas tax rebate for about what an average driver will pay in state gas taxes from July to December. That comes out to $200.”

The cost of the rebates for eligible drivers is estimated at $1.3 billion. An expected $4.2 billion budget surplus in the state would be tapped to cover the expense.

Republican leaders at the statehouse say they would rather see longer-range tax cuts than a one-time option. A reduction in personal income tax has been mentioned as an option.

Tax rebates elsewhere

A New Mexico law provides a gas tax rebate.

Approved during a special session, the legislation gives single tax filers a $500 rebate check. Joint filers will receive $1,000.

The money will be made available in two separate payments, with the first payment by June 30. The second check will follow in August.

Illinois Gov. J.B. Pritzker signed the state’s $46.5 billion budget for the next year. Included in the budget are tax rebates.

Checks will range from $50 to $400. The state is expected to send out the money later this year.

The governor also signed a number of tax policy changes that include a freeze to the state’s 39.2-cent gas tax rate and 46.7-cent diesel rate.

A 2-cent cost-of-living adjustment set for July 1 will be delayed for six months.

In Georgia, lawmakers approved tax rebates of $250 for single filers and $500 for joint filers.

Rebates also are, or soon will be, available for filers in Idaho, Indiana and Maine. Amounts range from $75 to $850.

Ongoing pursuit to provide tax relief is found in states that include California, Hawaii, Maine and New Jersey. LL

More state trends

Keith Goble, state legislative editor for Land Line Media, keeps track of many trends among statehouses across the U.S. Here are some recent articles by him.