Tax Cuts, Paid Leave Key Issues in Summer 2024 State Legislative Update?

August 14, 2024

State legislatures concluded sessions result in impacts on small business.

Tax Cuts, Paid Leave Key Issues in Summer 2024 State Legislative Update?

What it means: State sessions and special sessions that yielded results for small businesses. Our take: From tax cuts to paid leave, NFIB members helped keep big labor at bay.

The details: The summer state legislative sessions included mandates on salary disclosures and prohibition on employer-sponsored meetings to taxes, paid leave, and unemployment insurance reform. While most state legislatures were out of session, actions on proposals impacting small business continued this summer, with several states having regular and special sessions.?? Tax Cuts: Arkansas and Kansas are the latest states to pass legislation cutting taxes. In Arkansas, Governor Sarah Huckabee Sanders signed legislation reducing the state’s top individual income tax from 4.4% to 3.9% and the top corporate tax rate from 4.8% to 4.3%. It is the third tax reduction legislation signed by the Governor since taking office in 2023 and is expected to provide up to $500 million in tax cuts in the first year. In Kansas, Governor Laura Kelly signed legislation that eliminates the lowest tax bracket and establishes a two-bracket tax system set at 5.2% for individuals earning up to $46,000 and 5.7% for individuals earning above $46,001 beginning in tax year 2024. The new law is expected to provide up to $2 billion in savings over the next five years.?? Prohibition on Employer-Sponsored Meetings: Over the past few months, Illinois, Hawaii, and Washington became the latest states to pass proposals prohibiting employers from holding meetings to discuss unionization, known as captive audience. Colorado Governor Jared Polis vetoed a captive audience measure in a major win for small businesses. Efforts to pass similar proposals also failed in Rhode Island, Virginia, Maryland, and Massachusetts.?? Salary Disclosure Mandates: Minnesota and Massachusetts became the latest states to pass salary posting requirements. Minnesota’s law requires employers with thirty or more employees to disclose salary ranges and benefits on job advertisements. Massachusetts’ law applies to employers with twenty-five or more employees.?? Unemployment Insurance Reform: In Louisiana, Governor Jeff Landry signed a proposal that?reduces the unemployment insurance (UI) benefits duration from 26 to 20 weeks and ties the UI benefits to the state’s unemployment rate. Qualified applicants would be eligible to receive up to 12 weeks of benefits if the state’s unemployment rate is below 5% and up to 20 weeks if the unemployment rate is at or above 8.5%. Conversely, several states considered proposals extending UI benefits for striking workers. In a big win for small businesses, Connecticut Governor Ned Lamont vetoed a proposal that would have allocated $3 million to striking workers. Similar proposals failed in California, Washington, Hawaii, and Minnesota.??? Paid Leave: Minnesota Governor Tim Walz signed a proposal increasing payroll tax deductions from 0.70% to 0.96%. The new law increases the contributions by 37% (an additional $300 million per year). In Connecticut, Governor Ned Lamont signed legislation expanding paid sick leave benefits to employers with fifty or fewer employees. As of August 2024, more than a dozen states have paid leave laws in place funded through payroll deductions.??

Topics:

Elections

Labor

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