The new federal tax law (see “Bottom Line,” p. 24) will have varied effects on carriers' state tax burdens. In general, states with income taxes use the federal definition of income.
But more and more states require taxpayers to depreciate equipment under less generous rules than the federal government now permits. Unless the economy picks up, more states will be turning to increases in taxes and fees to offset their falling revenues.
However, the new tax bill also provides a one-time grant of $20 billion to states and localities. That will ease the budget crisis enough that some governors now say they will not need to raise taxes this year.