From the Tax Foundation comes this analysis of what states have done as a result of unexpectedly good revenue during the pandemic:

Commentary from the Tax Foundation follows:

As states emerge from the COVID-19 pandemic, many have significantly more revenue on hand than most ever thought possible in the early days of the pandemic. Taxable income grew over the past year, partly due to time-limited federal infusions, but largely because longer-term economic trends continued almost unabated.

States are emerging from the public health crisis not only with adequate revenue, but in many cases with robust growth, and so far, many have responded by returning extra revenue to taxpayers in a manner that also improves the structure of their tax code.

Many policymakers, moreover, have seen tax reform and relief not just as an opportunity but as a necessity, a way of demonstrating their state’s commitment to tax and overall economic competitiveness in an increasingly mobile world.