According to Stateline, a nonpartisan new service of the Pew Charitable Trusts, Indiana and Rhode Island businesses saw a drop in their corporate tax rates July 1. Maryland increased its tax credits for companies working on cybersecurity, biotechnology and research and development. Idaho eliminated its sales tax on people and companies purchasing software through the cloud.

Governors and legislators are taking advantage of their states' improved revenue, hoping that tax breaks will encourage businesses to move to and expand hiring within their states, the news source explained. Considering the upcoming election, it is also possible that politicians are banking on tax breaks to curry public favor ahead of this November.

"In 2010, we really saw a lot of tax and fee increases to bring revenues into cash-strapped state coffers," Brian Sigritz, director of state fiscal studies at the National Association of State Budget Officers, told Stateline. "This year was the first year (since then) governors actually proposed tax and fee decreases. We've definitely seen a movement to try to reduce taxes and fees and encourage job growth."

Not all analysts agree that cutting taxes is a wise move for encouraging growth, however. Joshua Smith, senior policy analyst at the Economic Policy Institute, explained to the news source that most states have no way of knowing whether a tax cut is having an effect on hiring. In any case, Smith said one state's gain is another's loss. He advocates using the extra money to fund infrastructure building and repair to create jobs and make states more appealing to employers.

In a July 1 speech from the Georgetown Waterfront, President Obama echoed Smith's sentiments, calling for more investments in infrastructure and fewer tax cuts.

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