The United States enacted significant federal tax reform, titled The Tax Cuts and Jobs Act, effective January 1, 2018. Because states incorporate provisions of the federal tax code into their own codes to varying degrees, federal tax reform has implications for state tax revenue (beyond any broader fiscal effect of the reform).
Eighteen states and Washington, D.C. have “‘rolling,” or automatic, conformity with the Federal Internal Revenue Code. Nineteen states must update their fixed-date conformity to adopt the new provisions. The remaining states conform selectively. States conform for a variety of reasons, but mostly to reduce the compliance burden of state taxation, since conformity allows both the state and taxpayers to rely on federal rulings, statutes, and interpretations.
Many states have taken the 2018 calendar year to analyze the impacts of the tax reform and decide which elements to conform to. In particular, where states previously conformed to the federal personal exemption (now eliminated), the standard deduction (now nearly doubled), and itemized deductions (now limited), the states have had to make decisions about whether to continue following the federal regulations or create their own.