May 18, 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.

Minnesota income taxes, vehicle fees lowered
ST. PAUL -- Minnesota taxpayers will be getting some cash back and will see a couple of state tax bills drop later this summer, thanks to legislation that goes into effect on July 1.

The comprehensive tax bill will provide $658 million in sales tax rebates, lower all of Minnesota's income tax rates by an average of 2.8 percent and reduce the cost of registering most vehicles.

Minnesota tax officials will use 1998 income tax returns to estimate the sales tax paid by each taxpayer and mail the refunds in late summer. The sales tax rebate is a continuation of last year's popular program. Tax estimators say the checks this year will be about 40 percent of the amount taxpayers received last year, ranging from $95 to $1,200 for single income tax filers and from $168 to $2,400 for joint income tax filers.

Under the new law, the state's vehicles will be taxed at 1.25 percent of their market value when they are new. In the auto's second year, the tax will be limited to $189. For years three through 10, the tax rate will be limited to $99 per year. After 10 years, vehicle registration will be a flat $35 per year.

As for state income taxes, singles earning less than $17,250 and couples earning less than $25,220 per year will be taxed at 5.35 percent instead of 5.5 percent when filing next year. Single earnings between $17,250 and $56,680, and couple earnings between $25,220 and $100,000, will be taxed at 7.05 percent, down from 7.25 percent. Single earnings of more than $56,680 and couple earnings greater than $100,000 will be taxed at 7.85 percent, down from 8 percent.

Low-income taxpayers in Illinois get break
SPRINGFIELD -- One segment of the Illinois tax base -- low-income earners -- will be getting tax relief thanks to a bill recently signed into law.

The state's new earned income tax credit is based on the federal program, which allows low-income workers to get back some or all of the federal income tax they paid throughout the year. The Illinois plan will pay qualified filers 5 percent of the federal credit.

The law takes effect in July, with the credit available for tax years 2000 through 2002. State tax officials estimate 270,000 Illinois workers will be eligible.

California governor wants to eliminate teachers' taxes
SACRAMENTO -- Gov. Gray Davis has proposed elimination of the state income tax for California's 280,000 public-school teachers.

Entry-level instructors who itemize deductions would see an annual tax break of about $500. Teachers earning around $50,000 a year would get about $1,350.

The governor also would like the state legislature to consider expanding the tax break to other credentialed public school personnel, such as counselors, librarians and administrators. Gray says his proposal would be paid for by California's booming economy, which has produced a treasury surplus of up to $13 billion.