The 2026 midterm elections brought major political changes that will impact public policy for years to come, but voters also weighed in on a wide range of state tax proposals on the November ballot.
The results were a mixed bag.
Voters approved tax limits and property tax breaks in several states, while other local tax measures failed.
Interestingly, in an election where affordability was often cited as a top issue, voters split on new taxes on high earners proposed in California, Colorado, and Washington state to fund public services.
Here’s more to know.
Midterm tax measures reflect competing priorities
For the November 3rd election, tax policy appeared on ballots in 16 states, with around 30 tax-related proposals up for a vote.
Property taxes were the most common subject, accounting for 15 measures in more than seven states. Other proposals addressed income taxes.
For example, in Iowa , voters approved a constitutional amendment requiring a two-thirds vote in both chambers of the legislature to raise individual or corporate income tax rates or establish certain new income taxes.
More than 61% of voters in Arizona approved Proposition 316 , a measure capping local grocery taxes at 2% and requiring voter approval before municipalities can impose or increase them.
About 62% of North Carolina voters approved a constitutional amendment lowering the maximum income tax rate the state can impose from 7% to 3.5%.
The change doesn’t automatically reduce the state’s income tax rate, which is scheduled to fall to 3.49% in 2027 under existing law.
Voters in the Tar Heel state also approved a separate measure requiring lawmakers to limit increases in local government property tax levies.
Speaking of property tax, as Kiplinger reported, Florida voters approved Amendment 3, expanding the homestead exemption for qualifying homeowners.
As a result, the additional exemption from non-school property taxes will increase from $50,000 to $150,000 in 2027 and $250,000 in 2028. Inflation adjustments begin in 2029.
Louisiana voters faced 10 proposed constitutional amendments, five of which involved property taxes.
Louisianans approved several changes, including authorizing local governments to provide an additional property tax exemption for qualifying homeowners age 65 and older.
The exemption can reach $30,000 in assessed value, depending on the homeowner’s age, but local governments must choose to offer it.
Voters there also approved raising the income limit for a property tax assessment freeze to $150,000 for eligible older homeowners, disabled veterans, and surviving spouses. Another new measure allows surviving spouses of disabled veterans to transfer their property tax exemption once when they move.
Meanwhile…several other high-profile tax measures raised questions about who should pay more.
Colorado Amendment 87 narrowly leads
Colorado voters considered a significant change to the state’s income tax structure.
If approved, Amendment 87 would replace the state’s flat 4.4% income tax with graduated rates, lowering taxes for taxpayers with taxable income below $500,000 and increasing them for those above that level.
The new rates would range from 3.7% on the first $25,000 of taxable income to 8.4% on taxable income above $1 million.
State officials say the additional revenue would fund K-12 education, healthcare, and early childhood care and education.
As of this writing, votes favoring Amendment 87 were narrowly ahead at 50.5%.
Washington millionaire tax stays
Washington voters favored keeping the state’s new 9.9% tax on annual income above $1 million , with approximately 58% of the vote.
Initiative 645 on the November 3 ballot would have repealed the tax and prohibited the state from imposing a broad individual income tax in the future.
The new tax, approved by state lawmakers earlier this year, is scheduled to take effect in 2028. The first tax returns and payments will be due in 2029. The levy is expected to raise billions of dollars for the state.
Note: Washington has long been one of the states without a broad individual income tax. However, it already taxes certain long-term capital gains .
California billionaire tax falls short
A majority of California voters cast ballots against Proposition 40 , which would have imposed a one-time 5% tax on the covered assets of residents worth more than $1 billion.
The proposal, also known as the California Billionaire Tax, was intended to raise money for healthcare and other public programs. As of this writing, the latest AP results showed that about 55% of voters opposed the measure.
Worth noting: Golden State voters approved Proposition 3 by nearly 59%, indefinitely extending the state’s existing higher income tax rates for top earners to fund education, which had been scheduled to expire in 2031.
Elections 2026: What the results mean for tax policy
Democrats’ historic gains could reshape tax policy at both the state and federal levels.
In states where the party gained full control of the governor’s office and legislature, Democratic leaders may have more room to pursue tax policies focused on family relief, healthcare support, and funding public services.
In Congress, this year’s Democratic victories will give the party control of both the House of Representatives and the Senate beginning in the new year — and a potentially stronger position to influence the federal tax debate.
That could put proposals to raise taxes on high-income households, change existing tax breaks , and expand certain tax credits back on the agenda.
However…with President Donald Trump still in the White House, any major tax legislation could face a difficult path. The two parties would have to find common ground to avoid a presidential veto.
Related
What to Know About Florida’s New Homestead Exemption
Types of Income the IRS Doesn’t Tax
Property Tax 101: What Homeowners Need to Know
