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.

Lower Colorado taxes, but when will extra money appear?
DENVER -- Colorado's income tax rate has been lower since Jan. 1. But state residents didn't see an extra cent until Aug. 2. And some Coloradans won't get any extra cash from the tax break until next year.

The confusion is thanks to the convoluted timetable approved by Colorado lawmakers this spring when they OK'd lowering the state's income tax rate from 4.75 percent to 4.63 percent. The bill made the lower taxes retroactive to Jan. 1, but the law wasn't officially on the books for seven full months. And state tax officials have until Jan. 1, 2001, to update state wage withholding tables that employers use to calculate how much to take from workers' paychecks.

Some employers have opted to start withholding at the new lower rate immediately by using privately designed computer programs that are now available. Workers who don't see more money in their paychecks now should get bigger refunds of their state taxes next April.

State economists say the lower tax rate averages out to $41 per year for each of the state's 3 million taxpayers.

Ohio's good economy gives taxpayers a break
CINCINNATI -- A booming economy has allowed Ohio's chief executive to cut the state's 2000 income tax rates, meaning smaller tax bills next April.

Ohio's fiscal year ended June 30 with a surplus of more than $856 million. That extra treasury cash allowed Gov. Bob Taft to sign an executive order cutting the state's 2000 personal income tax rates by 6.9 percent.

The governor's order shifted $610 million of the state's year-end surplus into Ohio's Income Tax Reduction Fund. Since the fund's inception in 1996, Ohio's permanent tax rates have been reduced according to the amount of money in the account. Taxpayers see the effect of the surplus each April when they file state tax returns using the new, lower tax rates.

Over the last four years, tax cut rebates have totaled $1.6 billion, according to Ohio revenue officials. The 2000 cuts are almost double last year's 3.6 percent cut. Ohio's largest variable tax break came in 1998, when personal income tax rates were reduced by 9.3 percent.

Next April, a family of four with an income of $50,000 can expect a state income tax cut of $96, according to the Ohio Department of Taxation.

The problem is that many who work in the national capital live in the adjacent states. When they leave their jobs and drive home, they take their income tax payments with them. Both Maryland and Virginia collect income taxes based on where a taxpayer lives, not where money is earned. State officials also have successfully fended off all D.C. efforts to institute a commuter tax, common in many cities that have a large number of suburban workers.

This year, however, members of Congress -- who decide the operating budget for the District of Columbia -- have included a provision in the city's 2001 funding bill calling for a $100,000 study to determine just how much money rides across District borders each work day.

Rep. Ernest J. Istook (R-Okla.), chair of the House Appropriations Subcommittee on the District of Columbia and author of the provision, says it's a matter of simple tax fairness. Once everyone knows exactly how much in taxes the District loses to Maryland and Virginia, Istook's measure calls for the jurisdictions to work out reciprocity arrangements where the money could be equitably allocated.

D.C.'s Tax and Revenue Office says the numbers that it's already compiled show that city income taxes are levied on only 34 percent of the wages earned within its borders. The rest is taxed primarily by Maryland and Virginia, both of which have larger wage tax bases. Thus, according to D.C. officials, Maryland's wage tax base is 117 percent of the wages paid to workers in the state and Virginia's is 105 percent.

The House Appropriations Committee has approved the District's 2001 funding bill. It is awaiting consideration by the full House and then must go to the Senate for approval.