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.

Two tax breaks get legislature's OK
CONCORD -- The New Hampshire Senate has approved a bill repealing the state's legacies and succession tax.

The bill was passed by the House last June and sent to the Senate in January, which amended it so the repeal would not take effect until July 2001. The bill would eliminate New Hampshire's 18 percent inheritance tax, at an estimated cost of $30 million per year to the state. The state's 18 percent inheritance tax is the third highest in the nation.

However, the estate tax, which brings in about $17 million a year, remains in effect.

Meanwhile, the New Hampshire House increased exemptions in the interest and dividends tax. It now goes to the Senate for approval. The bill would increase the exemption from $2,400 to $5,200 and remove $11 million from the general fund.

Third try for Tennessee income tax?
NASHVILLE -- Gov. Don Sundquist says he will again propose a state income tax to cover a projected $382 million shortfall in his budget. The tax rate would be 3.75 percent.

Last year's attempts to enact an income tax failed twice -- in April and November -- in special legislative sessions called by the governor specifically to deal with tax reform.

Assembly leaders contend that the votes still aren't there for any major tax reform, especially when it comes to an income tax. An alternative to the tax under discussion is a 1 percent sales tax on items and services that are not taxed under Tennessee's 6 percent sales and use laws. Among the services that might be taxed if the law were expanded are physician and attorney services, prescription medicines and newspaper sales.

Income tax carrying West Virginia operations
CHARLESTON -- Individual income tax is paying for more of the state's operations, with other types of tax collections declining, according to a report delivered Jan. 18 to the Senate Finance Committee.

"Personal income tax is the star," said Tax Department research director Mark Muchow, adding that the state's personal income tax collections are growing at a much faster rate than people's wages.

Personal income tax revenues have grown an average of 6.5 percent every year since 1996, he said, and is expected to grow by 4 percent next year. Meanwhile, the average West Virginian's wage growth was 2.7 percent in 1997 and 2.2 percent in 1998.

West Virginians also are taxed on other earnings, like stock market dividends and pensions, while other tax collections -- business and occupation taxes, estate taxes, cigarette taxes and sales taxes -- are down, according to the report.

Despite the report, Finance Committee Chairman Oshel Craigo said substantial tax reform this year is unlikely.

E-filing option for Pennsylvanians
HARRISBURG -- Taxpayers can file early but pay at the last minute under a new electronic filing system unveiled by the Pennsylvania Department of Revenue.

The free online service, known as "pa.direct.file," is available on the state's Department of Revenue Web site.

Under the new program, taxpayers don't have to buy special tax filing software. Using the Web site, they can plug in the information from their W-2 forms and seek immediate refunds. In fact, they don't even have to send in their W-2. Instead, taxpayers can complete the online Schedule W-2 when they fill in the rest of their state return.

Those who owe can fill out the return anytime, but may wait until the April 17 deadline to send the money.

All residents who filed tax returns in 1999 have been mailed a tax voucher with a personal identification number to ensure secure electronic filing, officials said.

Florida governor wants tax cuts, revenue office wants sales tax
TALLAHASSEE -- Florida Gov. Jeb Bush's fiscal 2001 budget includes recommendations for $578 million in tax cuts.

A prime target is the state's intangibles tax on the value of an individual's stock holdings. The governor wants to eliminate the tax over a two-year period.

Meanwhile, the Florida Department of Revenue is reminding residents that if Internet, telephone or mail order retailers don't collect sales taxes, buyers still are obligated to send that money to the state. In the 1998-99 budget year, only 1,813 people -- mostly Department of Revenue employees -- complied with the law.

Revenue officials admit that enforcement efforts are non-existent, but they hope that if people know they owe the taxes, they'll send them in. A copy of the proper form to pay the taxes can be downloaded from the department's Web site. Florida residents also can check the blue pages of their phone books for a list of the department's 25 service centers.

Push to raise N.D. income tax is stalled
BISMARCK -- State lawmakers who wanted to raise North Dakota's income tax to increase teacher salaries have backed away from that plan.

The 10 legislators, five Republicans and five Democrats, who originated the tax hike plan say they'll look instead for other ways to increase teacher pay. On average, North Dakota teacher salaries rank near the bottom in state-by-state comparisons.

The plan would have increased the state income tax rate from 14 percent to 17 percent. The percentage is calculated against what a taxpayer pays in federal income taxes. It was abandoned because an agreement couldn't be reached on how to spend additional money the increase would have produced.

The higher tax would have raised an estimated $81 million over two years. The initiative suggested dividing the money equally to finance teacher pay increases and local property tax reductions. Other school district employees would have been eligible for pay raises as well.

Representatives of North Dakota's teachers and school board members said the two sides deadlocked on how the "salary share" of the money would be handled.

Alaskan permanent fund payments under attack
JUNEAU - A cherished part of Alaska living, the permanent fund from which residents get an annual dividend, is under attack by a state senator.

Senate Majority Leader Jerry Mackie wants to make one last big payout to Alaskans, then use the remainder of the account to balance the state's budget. The 1999 payment was a record $1,769 dividend to more than 575,000 people.

Mackie wants to use about half of the fund's current $27 billion value to pay a $25,000 dividend to residents in 2001. The existing dividend program would be abolished, and the earnings from the remaining fund would be dedicated to inflation-proofing and balancing the budget.

The plan requires an amendment to the state constitution, so it must be approved by two-thirds majorities in both the House and Senate and a statewide vote in November.

Gov. Tony Knowles and many lawmakers seemed intrigued by the plan's possibility to balance the budget in a single stroke. But getting voter support may be harder. In a September advisory election, 84 percent of voters opposed any plan to decrease the dividend and use some of the fund's earnings to balance the state's budget.

The Senate Finance Committee is planning meetings on Mackie's plan in early February.