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.

California grants head of household status to gay partner
SACRAMENTO -- A California woman who supports her lesbian partner and their child has been granted head of household tax filing status.

Tax and legal observers say the decision could expand the legal definition of a parent for unmarried heterosexual, gay and lesbian couples.

Head of household status is a more beneficial way than single to file if the taxpayer is supporting a child. However, filers must meet specific support and relationship standards. The July ruling by California's State Board of Equalization is the first time the panel has allowed head of household status to be used by someone who is not a child's biological or adoptive parent.

Thanks to the ruling, Helmi Hisserich and Tori Patterson, who have been together 14 years, will save about $3,100 a year on taxes. Hisserich has been the main wage earner since Patterson gave birth to their daughter three years ago.

Hisserich first filed her state tax as head of household in 1997. The Franchise Tax Board, California's tax collection agency, told her that because she is not the biological parent and not married to the parent, she did not qualify for head of household status. Rather, the board viewed the girl as "a friend's child," even though Hisserich and Patterson have registered as domestic partners and Hisserich is in the process of adopting the child.

Hisserich said she found that the parent-child relationship was not clearly defined under California tax law and took her case to the State Board of Equalization, which is the appellate body for franchise and income tax appeals. During the appeal, she focused on her and Patterson's intent to have a child and raise it together.

The board voted 3-2 in favor of Hisserich's appeal. A written explanation of the decision is expected in about two months, at which time the board will vote again to approve the written decision.

Arizona tax-limit measure suffers setbacks
PHOENIX -- Arizona taxpayer efforts to eliminate the state's individual and corporate income taxes have been dealt setbacks.

Backers of Proposition 107 want the measure on the November ballot where, if approved by voters, it would amend Arizona's constitution to phase out state income taxes over four years.

The proposal, dubbed the Taxpayer Protection Act of 2000, also would require voter approval of any legislative moves to increase taxes and would allow federal office candidates to note on ballots that they support elimination of federal income taxes.

But the proposal's multiple goals are part of its problem, according to a county Superior Court judge, who has ordered that the initiative be kept off the state's ballot because it violates the Arizona constitution's "single subject" rule. The rule is designed to prevent "logrolling," a practice in which unrelated amendments are combined into one to force voters to vote for or against the entire package.

The judge acknowledged that all three parts of Proposition 107 deal with taxes, but ruled they are separate subjects because one part could stand without the other. The lawsuit to kill the ballot initiative was brought by critics who say Arizona would face a financial crisis if the measure passed since income taxes account for nearly half of the state's budget.

Supporters of the ballot initiative plan to appeal the circuit court ruling to the state's Supreme Court.

But the court battle is not the proposal's only problem. Arizona's elections director has told county officials across the state that they must review thousands of signatures on petitions submitted in support of Proposition 107. That means every signature must be individually verified in whichever of Arizona's 15 counties it was collected.

Random sampling by the Secretary of State's office is projecting that 148,501 valid signatures were gathered, about 97 percent of the minimum 152,463 signatures needed to get the measure on the November ballot.

Election officials said the signature verification process would continue unless the state Supreme Court upholds the lower court ruling and removes the proposal from the ballot.

New Jersey sales tax break expanded for farmers
TRENTON -- Legislation expanding New Jersey's sales tax exemption was enacted in January, but exactly how the exemption applies to farmers is just now being addressed.

The state's Division of Taxation has proposed guidelines elaborating on the sales tax exemption's "farm use" provision. At issue was language calling for farm equipment to be "incorporated into" a structure before it could be free from New Jersey's 6 percent sales and use tax.

The proposed regulations now will allow farmers the exemption for equipment such as milking machinery, animal feeding and watering equipment, and egg incubators.

"Permitting an exemption for necessary farm production equipment, without regard to whether it needs to be permanently affixed and thus 'incorporated into' a structure, now gives farmers a benefit similar to that enjoyed by manufacturers," the Taxation Division said in a statement on the impact of the proposed rules.

The farm equipment regulations also would allow sales tax exemptions for materials used to construct single-use agricultural structures, such as silos and manure handling equipment; production and conservation services; post-production handling and preservation equipment; and containers.

Before the regulations become final, the state must accept public remarks. Comments are due by Sept. 6 and should be sent to Nicholas Catalano, Regulatory Services Branch, Division of Taxation, 50 Barrack St., P.O. Box 269, Trenton, N.J. 08695-0269.