May 11, 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.

Alabama taxpayers get their own champion
MONTGOMERY -- Alabama taxpayers have a friend in the tax collector's office.

Kerry W. Brown assumed the post of Alabama Taxpayer Advocate on May 1, 2000. In his newly created position, Brown has the power to set aside wrongly assessed taxes and issue refunds that were erroneously denied.

Before the advocate bill became law, an incorrectly taxed Alabaman had to challenge the assessment within a certain time frame. If no challenge were filed, the tax became final, even if the revenue department later learned that the tax was incorrect. The only recourse for the taxpayer was to pay the wrong tax and then request a refund.

Brown, a 27-year career state employee, now can immediately reverse such tax department errors. As Alabama's taxpayer advocate, he also can waive penalties if a taxpayer shows reasonable cause and eliminate interest charges that were created by state tax office delays.

The taxpayer advocate law requires that all advocate actions be on public record and open to inspection. The advocate also has to submit an annual report to the Alabama legislature.

Florida takes lead in simplifying communications taxes
TALLAHASSEE -- The nation's first consolidated communications tax is on its way to Florida's governor to be signed into law.

Beginning Oct. 1, 2001, the new simplified Florida tax will appear on communications bills in just two lines, reflecting state and local taxes. The state portion will include sales tax and the gross receipts tax. The local tax will contain charges from the municipal utility tax, cable and telecommunications franchise fees and the local option sales tax for cable and telecommunications services.

This will be a welcome change for customers used to wading through line after line of tax charges. The measure will not affect the $2.08 billion now collected annually. But legislation supporters say the consumer tax burden could eventually be eased because the bill's restructuring creates a broader tax base by allowing the state and local governments to tax companies' bundled services and new technology products.

Florida revenue officials will re-examine the various communications taxes -- from landline phones to wireless devices, from cable to satellite television -- and set local rates next year. That process will likely raise taxes on some services, but lower them on others.

For businesses, the bill will dramatically ease the work of company accountants. Under the new measure, companies will send state and local taxes only to the Florida Department of Revenue. State officials then will distribute the local portion to counties and municipalities. Previously, businesses separately paid taxes and fees monthly to each of Florida's more than 450 local governments.

Even more appealing, say industry representatives, the tax change should make it easier for companies to combine services, enter agreements with other services providers and offer advances in technology, such as interactive paging and wireless Internet service.

The simplified communications tax concept originated with a 1997 Governor's Task Force recommendation for a unified tax to take the place of all local and state taxes. The bill represents a consensus reached between lawmakers and the telecommunications and cable industries. Congress is working on a similar proposal to simplify the billing jurisdiction for wireless communications taxes.

Kentucky's horse tracks get tax breaks
FRANKFORT -- Fusaichi Pegasus took the 2000 Derby honors, but starting this summer Kentucky racetracks will be the biggest winners. Heavy lobbying at the close of the Kentucky General Assembly resulted in cuts in the excise taxes that horse tracks must pay on money bets.

The state's larger tracks, Churchill Downs and Keeneland, have been paying excise taxes of 3.5 percent on bets placed. The rate for smaller tracks is 1.5 percent. Beginning July 1, 2000, the two larger tracks' tax rate will drop to 3 percent, and will fall again next year to 2.5 percent. The lower rate for the smaller tracks will remain at 1.5 percent. Track officials estimate that when the reduced tax rate is fully phased in, it will save Churchill Downs $1.4 million and Keeneland $600,000 in taxes.

The General Assembly also eliminated the excise taxes on bets placed for the Breeders' Cup, which will return to Churchill Downs on Nov. 4, 2000. In 1998, the last year the Breeders' Cup was held at Churchill, $13.4 million was wagered at the track, generating $315,000 in taxes.

Also passed during the legislative session's final hours: a bill giving Kentucky racetracks more than $2.5 million in tax relief for economic development and a tax credit of $228,000 over the next two years for Prestonsburg's trotting track.