States Decouple from Trump Tax Cuts, Drawing GOP Backlash

State income taxes often reflect federal policies, but several jurisdictions have moved to keep the latest Republican changes out of their codes. Even before Congress passed a broad tax cut last July, Colorado excluded a new deduction for overtime pay from its income tax; Delaware barred new federal business breaks; and the D.C.

Council voted to exclude several of the new federal tax cuts. The law revived or created a range of tax breaks for businesses and individuals, including versions of President Trump’s campaign promises not to tax tips or overtime pay. Because most states use federal definitions of income as a starting point, those federal breaks can reduce state revenues, and some states are proactively decoupling to protect their coffers.

Republicans in the House passed a resolution forcing the District of Columbia to adopt the federal tax cuts despite warnings from Mayor Muriel E. Bowser and other officials that a sudden change would upend filing season.

United States, Colorado, Delaware, District of Columbia

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