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.

Kentucky governor's plan includes some tax hikes
FRANKFORT -- Gov. Paul Patton's tax proposal would increase the amount that high earners pay, raise the state's gasoline tax and apply sales tax to the cost of labor for repairs of personal property.

The plan, which would go into effect next year, also would reduce taxes for more than 1 million Kentuckians in the lower tax bracket, phase out the state property tax on cars and boats, and give new car buyers credit on sales tax for the value of their trade-ins.

The state would adopt the federal income tax's personal exemption of $2,800 and raise the standard deduction to match the higher federal tax code figures. This generally would help lower-income taxpayers and those with larger families. But an accompanying new state alternative tax -- to be applied generally to people with higher incomes who claim numerous deductions -- would cause some Kentuckians to pay more.

The increased deduction would cost the state money. To make it up, the governor wants to apply the 6-cent sales tax to the cost of labor for repairs of personal property. This includes labor for repairs of vehicles, computers and other personal property. But it would not be applied to labor for repairs on real property -- such as roofing or heating-system repairs in a home.

Kentucky would get more money from increasing the state's 16.4 cents-a-gallon gas tax to 20.4 cents this July 1, and by 3 more cents -- to 23.4 cents -- a year later. This money goes to the state's road fund, since that fund also would lose money with the sales tax credit proposal.

People buying new cars, or people buying any kind of car from out of state, would get credit for the value of their trade-in when the sales tax is applied. Patton said it is unfair for a person buying a new $30,000 vehicle to pay the sales tax on the entire $30,000 if he is trading in a car valued at $20,000.

Patton's plan also has a three-year phase out of the state's portion of the property tax on motor vehicles; replaces several existing state and local taxes on telephone and cable-television companies with a new 6 percent excise tax; and expands the current sales-tax exemption for prescription drugs bought at pharmacies to include drugs dispensed by doctors and other health-care providers.

Home taxes for older residents might be frozen
PHOENIX -- A generational tax battle is brewing in Arizona thanks to state House members who want to freeze the taxable value of the homes of most seniors as long as they live in them.

Rep. Dean Cooley, the leader of the effort, said his plan would give seniors on fixed incomes a break but acknowledged that the lost property taxes would have to be made up by other homeowners.

An Arizona House committee passed the senior home tax freeze bill, which says that that once a person 65 or older lives in a home for at least two years, the assessed valuation is frozen at that level until the property is sold. The income limit is $23,232 for a single person and $43,450 for a couple, with both partners required to be age 65 to get the tax break.

The rapid rise in most Arizona home values is behind the legislation. With the higher values come higher property taxes, a problem for some elderly Arizonans on fixed incomes, bill supporters say.

Meanwhile, Rep. Jerry Overton wants the resident tax break to be extended to every Arizona homeowner. But that approach dismays business owners, who fear the tax burden will then be shifted in their direction.

Pima County Assessor Rick Lyons dislikes both plans, and argues that the state's existing partial property tax exemptions for widows and widowers and the disabled already provide property tax relief. These laws exempt the first $30,000 of a $100,000 home from taxes.

Minnesota politicians want state surplus to go to taxpayers
ST. PAUL -- Leaders of Minnesota's Democratic-Farmer-Labor party want to use the state's projected $1.6 billion surplus for one-time taxpayer cash rebates and permanent tax cuts. What's left after that, the party says, would go to education, health care, transportation and capital improvement projects.

Gov. Jesse Ventura agrees with some of the proposals, already asking the legislature to enact a second round of sales tax rebates that would total $500 million. This rebate would be about $250 per taxpayer, $400 less per person than last year.

The Democratic-Farmer-Labor plan includes:

• Refunds or rebates to students to offset rising tuition costs.
• Another sales tax rebate.
• A 25-percent across-the-board cut in motor vehicle license fees.
• An undetermined reduction in local property taxes for schools.
• An undefined income tax cut.

Senate Majority Leader and Democratic-Farmer-Labor member Roger Moe said his party won't put numbers on their proposal until the Minnesota Finance Department makes its next revenue forecast in late February.