Because the federal income tax is the biggest and usually the first tax we see listed on our pay stubs, we naturally tend to focus on it.

But state government takes a bite out of our spending money, too. Bankrate will help you stay on top of what your localities are collecting -- income, sales, personal property or investment taxes, or often a combination of all.

Here's a look at some recent tax actions across the nation.

Virginia Senator looks to end state marriage penalty
VIRGINIA BEACH -- State Senator Edward Schrock has introduced legislation to eliminate Virginia's marriage penalty, a peculiarity in the tax code that sometimes results in couples paying more taxes than singles.

Schrock proposes increasing the deduction married couples take from their state income to $6,000, from $5,000. That would be twice the exemption amount single filers are allowed.

Schrock did not know how much the bill would cost the state in tax revenues. However, he said he submitted the bill because it's more important to promote a tax code that's fair to couples. If passed, the bill would take effect in the 2001 tax year.

Despite early bipartisan support, state legislature observers say it is too early to tell how the bill will fare. The state marriage penalty has often been discussed in Richmond, but this is the first time legislation to address the issue has been introduced.

The bill may be hampered, too, by a filing option available to Virginia's married couples. They may file separately, as if single, on a combined form.

Virginia's state income tax is based on a taxpayer's federal adjusted gross income. A federal marriage penalty provision was part of a Congressional tax package vetoed in September by President Clinton. In the federal version, the combined income of a married couple can put them in a tax bracket that costs more in taxes than they would have paid if they were unmarried, although many couples experience just the opposite. Some couples find themselves with a "marriage bonus," according to the Congressional Budget Office.

New Jersey local income tax under discussion
FREEHOLD -- A committee of mayors and municipal officials is resurrecting the idea of a local income tax to cover public school costs.

The new panel set up by the League of Municipalities, called the Government Efficiency and Responsiveness Committee, held its first meeting Dec. 15 in Freehold. Its goal is to propose ways of easing property taxes by suggesting alternative revenue sources as well as cost-cutting moves that municipal governments could follow.

Searching for ways to ease the burden of local property taxes, Chatham Borough Mayor Barbara Hall said the income tax idea, which was initially proposed by a similar panel three years ago but quickly faded, resurfaced this month at the first meeting of a group of 28 mayors and local administrators and finance officers.

Committee members stressed that the re-examination of the tax proposal is tentative and not a priority issue. But this is the second time in three years that such a tax has been explored. In 1996, a similar group of lawmakers examined school funding and proposed a local income tax to finance school budgets. That earlier plan proposed a tax at a uniform statewide rate, collected as a surcharge on state income taxes that would then be returned to the school district in which each taxpayer resides.

Any local income tax would need the approval of the legislature and governor. Presently, the state provides $5 billion annually in aid for education, but school costs still account for an average of 50 percent of local property taxes. The legislature also is debating a proposal that would mandate that $11.5 billion in state and local revenue be spent for school construction.

Wyoming business fee changes suggested
CHEYENNE -- Secretary of State Joe Meyer has proposed replacing Wyoming's myriad business registration fees with either a flat fee or a system based on property tax assessments.

Current law sets different fees for limited liability companies, limited partnerships and corporations, even though their functions are nearly identical. The existing structure provides special advantages for limited liability corporations and limited partnerships, which may pay fees based on their stated capital. A company may list its stated capital as $1 while holding millions of dollars in assets and virtually escape the fee, according to Meyer.

Under the property tax proposal, business would pay an initial filing fee of $125. Then the business would pay more based on the 11.5 percent property tax paid on the business' assessed property value.

If the property tax is less than $50,000, the company would pay an added $25 annually; between $50,000 and $100,000, $50 a year; $100,000 to $500,000, $100 a year; and $500,000 to $1 million, $200 annually. Each million thereafter would cost $200, not to exceed $50,000.

This method would boost state revenue $422,417 a year, according to Meyer.

With the flat-fee approach, a company would pay a flat fee of $125 a year after an initial $125 filing fee, which would raise an additional $905,917 annually.

Louisiana groups want more taxes for schools
BATON ROUGE -- Higher income and liquor taxes are among suggestions Gov. Mike Foster has received from his request for ideas on how to pay the state's teachers.

The Public Affairs Research Council suggests the income tax increase to pay the estimated $150 million to $250 million it would cost to give teachers higher salaries to meet the average in Southern states.

The Louisiana Alliance to Prevent Underage Drinking recommends higher liquor taxes. The group says a 10-cent tax on single servings of drinks would bring in about $164 million a year.

Last month Foster sent out letters asking for ideas to fund teacher raises during a year when state money is tight. He has received 34 responses so far -- 17 from people with no apparent ties to any civic organizations or other special interests, nine from people with ties to various organizations and eight from legislators.

Mark Drennen, Foster's commissioner of administration, said those groups' suggestions would be reviewed and considered when Foster and his staff draw up plans for an education special session. But an income-tax increase is not likely, Drennen said.

Gas tax cut in Pennsylvania
ERIE -- Nearly 2.5 million Pennsylvanians began the new century with a tax cut.

Those Keystone State residents use natural gas, and on Jan. 1, Pennsylvania's 5 percent tax on the fuel was eliminated. The tax had been automatically added, as the Gross Receipts Tax, to the monthly bills of consumers who get their natural gas through public utilities. Its elimination will save families an average of $55 a year.

Natural gas is a primary heating fuel for Pennsylvanians. Of the state's nearly 5 million housing units -- including houses, condominiums and apartments -- nearly 50 percent use natural gas as a heating source, according to the Pennsylvania Utility Commission.