April 13, 2000 -- 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.

Tax victory for some New York City commuters
ALBANY -- The cost of commuting to New York City just got cheaper for some workers.

The New York Court of Appeals unanimously ruled April 4 that the city's commuter tax is unconstitutional because it had been applied since last summer to out-of-state workers but not to residents of New York state who work in the city.

The state's Division of Taxation and Finance is preparing pamphlets explaining how neighboring workers can get a refund of commuter taxes they have paid since July 1, 1999. That day was when the New York legislature ended commuter tax collection on state residents.

The refund guides will be distributed as soon as the state's highest court issues the official order of its ruling. Employers also will get notices advising them to cease commuter tax withholding from employee paychecks.

The refund of an estimated $100 million in taxes is necessary because New York City continued to collect the taxes even as the legal challenge moved through the courts. Most of the refunds will go to commuters from New Jersey and Connecticut.

Tax filing options for out-of-state residents who must file New York income tax returns are:

• File for an extension in order to complete the city tax refund paperwork
• Amend a previously filed tax form to account for the city tax refund
• Amend any estimated state tax payments to account for the city tax refund

Additional information on the ruling and which forms to file can be found at the state's taxation Web site.

A bill passed the last day of the state's legislative session in March has been signed into law by Gov. Cecil Underwood.

Beginning Jan. 1, 2001, up to $30,000 of a veteran's military pension will not be taxed by the state.

The partial income exemption was a compromise with lawmakers who sought a constitutional amendment exempting all veterans' pensions from state income tax.

Hawaii pushing high-tech tax incentives
HONOLULU -- State legislators have proposed several tax breaks they hope will entice high-technology companies to set up shop in Hawaii. The proposals would:

• Provide income tax credits to companies that provide technology training for employees.
• Expand state tax credits for high-tech research and development.
• Allow qualified high-tech companies to sell as much as $500,000 of operating losses to another taxpayer.
• Increase the state research and development tax credit from 2.5 percent to 20 percent
• Allow biotechnology companies to sell operating losses that are carried over from one year to the next to other biotechnology companies for tax purposes
• Exempt businesses involved in development and production of genetically engineered biotechnology products from the state's excise tax.
• Broaden state tax benefits for "high-technology research" to include music CDs, videos and computer animation.