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.

Low-income taxpayers in New Jersey may get tax credit
TRENTON -- New Jersey is joining the growing number of states that are offering low-income taxpayers a tax credit.

Both the state's General Assembly and Senate overwhelmingly approved creation of a New Jersey Earned Income Tax Credit program. If signed into law by Gov. Christine Todd Whitman, New Jersey households earning $20,000 or less and receiving the federal earned income tax credit also will be eligible for the state credit.

The New Jersey earned income tax credit will be a percentage of the family's federal earned income tax credit and phased in over four years. Beginning this year, the credit would be 10 percent of the federal one, rising to 15 percent in 2001, 17.5 percent in 2002 and 20 percent in 2003 and each year thereafter.

Any New Jersey income tax owed by families with incomes between $15,000 and $20,000 in taxable year 2000 will be reduced by the state credit. If the credit pays the taxes in full, the balance will be paid to the family as a refund. In taxable years 2001 and beyond, when the minimum threshold for state income tax filing rises to $20,000, New Jersey families with zero tax liability will receive the full amount of their state credit as a refund.

Lawmakers say that based on information from other states with earned income tax credits, about 85 percent of New Jersey's eligible families are expected to participate in the program. At the federal level, the U.S. Treasury estimates that Garden State families will claim $669 million under the federal credit program this year.

Iowa lawmakers offer shoppers "early Christmas"
DES MOINES -- Iowa shoppers are getting what state officials have dubbed "Christmas in August" -- a two-day sales-tax holiday.

Beginning at 12:01 a.m. Aug. 4 and running until midnight Aug. 5, shoppers won't pay any sales tax, state or local, on most shoes or clothing priced at less than $100. There is no limit on the number of tax-free articles a shopper can purchase.

State lawmakers estimate the tax holiday will save Iowans $3 million in sales tax. A complete list of items exempt from sales tax is available at the state's tax division Web site.

State and local sales tax will be waived on back-to-school items, including school supplies, clothes, shoes, computers and some athletic equipment during the three-day buyers' weekend. Items placed on layaway or other deferred payment plans are not eligible for the tax break; neither are purchases that will be used in a business. Details on exempt and still-taxed items can be found at the state's department of revenue Web site.

South Carolina officials acknowledge their treasury will take a hit, but they anticipate that by luring shoppers into stores, the sheer sales volume -- including purchases of non-exempt items -- will counter lost tax collection. Chain retailers whose stores have experienced sales tax holidays in other states say they have, in some cases, seen double their usual business.

Plus, state officials hope that out-of-state neighbors will spend some of their cash in South Carolina stores during the sales-tax-free weekend.