Rockin' The USA: States Tax Federal Rebate?

I previously blogged about states taxing the rebate.

It seems this week we have a couple more states deciding what they want to do...

Ohio: Not taxing rebate. Congrats Ohio!!

Connecticut: Also not taxing...

AND, Ohio does us a favor and explains why some states may tax the rebate (thanks again Ohio!)

"Now, some states WILL tax the rebate.

Reason: those states allow their taxpayers to deduct federal income taxes paid. So, a rebate is a reduction of the federal income tax which the taxpayer (in such states) had previously deducted. A reduction of a deduction means that the taxable income (for that state) has now increased (over what that individual's taxable income in that state was prior to the receipt of the rebate)."

Results so far...

Taxing the Rebate
Alabama

Not Taxing the Rebate
Ohio
New York
Oregon
Connecticut

Another interesting thing to note is that Connecticut may we working on their own state tax rebate. See the full article here.