Voters will have the opportunity to decide on high-stakes state and local tax (SALT) measures during the November 2026 election, ranging from a first-of-its-kind wealth tax in California to constitutional limits on income and property tax rates in several states.
Taken together, these measures reflect two competing visions of state tax policy: substantial increases in taxes on high-income and high-net-worth individuals, versus tax reductions or restrictions on future tax increases. Voters across several states will also consider measures aimed at lowering property taxes, which have risen sharply in recent years as property values have significantly increased.
California billionaire tax
Proposition 40
California voters will consider three interconnected measures addressing the state’s proposed wealth tax (colloquially known as the Billionaire Tax). Proposition 40 would impose a one-time tax on the net assets of certain high-net-worth individuals.1
However, two additional propositions, Propositions 41 and 42, are also before California voters.2 Propositions 41 and 42 are designed to block the implementation of Proposition 40. If Proposition 40 is approved and receives more “yes” votes than both Propositions 41 and 42, Proposition 40 takes effect and the countermeasures are voided. However, if either Proposition 41 or 42 receives more “yes” votes than Proposition 40, the Billionaire Tax does not take effect, even if Proposition 40 also passes.
Proposition 40 would impose a one-time 5% tax on a California resident taxpayer’s covered net assets exceeding $1 billion. Although the tax is limited to California residents, the residency determination is made as of Jan. 1, 2026.
Unlike an individual income tax, which generally applies to income earned or received during a taxable period, the proposed tax would apply to accumulated net wealth measured by reference to the value of the taxpayer’s covered assets, less specified liabilities.
The proposed tax base would encompass a broad range of assets, including:
- Publicly traded stocks and other marketable securities;
- Stock and other ownership interests in privately held businesses;
- Partnership and limited liability company interests;
- Venture capital and private equity investments;
- Intellectual property, including patents, trademarks, copyrights and similar intangible assets;
- Trust and beneficial ownership interests;
- Art, collectibles and other investment property (subject to the exclusions described below); and
- Other assets included within the measure’s definition of covered assets.
The initiative also provides exclusions or special treatment for specified assets. Directly held real property is excluded, as are most qualified retirement accounts (with Roth accounts capped at a value of $10 million). Tangible personal property, such as art, vehicles, and collectibles, would be subject to an exclusion of up to $5 million in value, and is otherwise excluded if the property is located outside California for at least 270 days during 2026.
The timing of the tax payment will be a critical consideration for affected taxpayers. The valuation date for assets potentially subject to tax would be as of Dec. 31, 2026. The tax is reported with the taxpayer’s 2026 California income tax return and would be due on April 15, 2027, unless the taxpayer elects to spread the payment over five years.
Further, all taxpayers would be required to certify on their 2026 return whether their net worth was above or below $1 billion as of the valuation date, and those subject to the tax would be required to submit a declaration of the amount owed along with supporting appraisals or other evidence of fair market value.
Propositions 41 and 42 would counter Proposition 40
Two additional measures, Propositions 41 and 42, are designed to block the implementation of the wealth tax contemplated by Proposition 40.
Specifically, Proposition 41 would require the California State Auditor to conduct pre-election and recurring audits of programs funded by new statewide special taxes, and, importantly, would prohibit new special taxes enacted after Jan. 1, 2026, from being excluded from the state’s constitutional spending limit.
Because Proposition 40 would qualify as a special tax, if Proposition 41 receives more affirmative votes than Proposition 40, Proposition 40 would then be nullified, even though the two measures address different subject matter on their face.
Proposition 42 would prohibit specified taxes on personal property and restrict certain retroactive tax law changes. Specifically, the measure would bar new state taxes on the ownership of financial assets, retirement accounts, business interests, intellectual property, and other personal property.
It would also prohibit new taxes applied retroactively based on a taxpayer’s past conduct, activities, or status — including residency status predating the tax’s effective date — for any such tax enacted or taking effect on or after Jan. 1, 2026. This measure would nullify Proposition 40’s tax base along with Proposition 40’s retroactive imposition of residency as of Jan. 1, 2026.
Income tax initiatives
California Proposition 3
California voters will also consider Proposition 3, a constitutional amendment that would make permanent the top marginal personal income tax rates of 10.3%, 11.3%, and 12.3% (first approved in 2012 by Proposition 30 and extended in 2016 by Proposition 55).3
The measure would not increase existing rates; rather, it would remove the 2031 sunset date designated for the elimination of these rates. If Proposition 3 fails, the rates for these brackets would revert to 9.3% for tax years beginning on and after Jan. 1, 2031. Note that the measure does not affect the separate 1% Mental Health Services Tax surtax on taxable income over $1 million, resulting in a combined top marginal rate of 13.3%.
Colorado Propositions 87 and 136
Colorado voters will consider competing measures that would move the state’s income tax structure in opposite directions. Specifically, the competing proposals present Colorado voters with a direct choice between implementing a graduated income tax rate structure and maintaining the current maximum rate of 4.4%.
Proposition 87 represents a substantial departure from Colorado’s existing single-rate structure, replacing Colorado’s 4.4% uniform income tax rate with graduated rates.4
The initiative’s rate structure begins with the lowest applicable rate of 3.7% on income up to $25,000 (determined by federal taxable income) and rises to 8.4% on income over $1,000,000. This rate structure would be applicable to individuals, trusts, estates, and C corporations. If enacted, the rate changes would be effective starting with the 2027 tax year. Further, this measure would strike the Colorado Taxpayer’s Bill of Rights (TABOR) uniform tax rate requirement.
Proposition 136, in contrast, would cap both the corporate and individual income tax rates at 4.4%.5 If both measures are approved, their conflicting provisions would be resolved according to which measure received the higher number of “yes” votes.
Iowa Amendment 1
Iowa voters will consider Amendment 1, a proposed constitutional amendment that would require a supermajority vote for any future increases in individual or corporate income tax rates.6 If approved, the amendment would place a constitutional constraint on future efforts to increase either individual or corporate income tax rates and require a two-thirds vote in both the Iowa House and Senate. Currently, Iowa imposes a 3.8% individual income tax rate and a graduated corporate income tax with a top rate of 7.1%.
North Carolina Senate Bill 1080
North Carolina voters will consider a legislatively referred constitutional amendment (Senate Bill 1080, Session Law 2026-4) that would reduce the maximum income tax rate from 7% to 3.5%.7 The amendment would lower the constitutional maximum rate on individual and corporate income from 7% to 3.5%, effective for taxable years beginning on or after Jan. 1, 2027, if approved. The measure follows a 2018 constitutional amendment that lowered the maximum rate from 10% to 7%.
Note, the amendment would not affect current income tax rates, which are already below the proposed cap (the individual rate is scheduled to fall from 3.99% to 3.49% in 2027, with possible future reductions if certain revenue targets are met).
Property tax initiatives
Florida Amendment 3
Property tax relief remains a prominent issue in many states, and Florida’s Amendment 3 represents one of the most significant property tax measures appearing on the 2026 ballot.8 The legislatively referred constitutional amendment would take effect Jan. 1, 2027, if approved by at least 60% of voters.
The amendment would increase the homestead exemption applicable to nonschool property taxes from $50,000 to $150,000 in 2027, rising to $250,000 in 2028, with the exemption amount indexed to inflation beginning in 2029. School district property taxes would not be affected by the increased exemption.
The amendment also would impose a residency limitation for the increased exemption. Individuals who establish a Florida homestead on or after Jan. 1, 2027 would initially qualify only for the current $50,000 exemption amount (adjusted for inflation), rather than the increased $150,000/$250,000 exemption.
New Florida residents would need to maintain their Florida homestead for five years before becoming eligible for the full increased exemption. Individuals who were already established Florida homestead residents before the cutoff date would not be subject to this phase-in and would receive the increased exemption immediately upon its effective date.
Beyond the homestead exemption, the amendment would reduce the annual assessment cap applicable to non-homestead property, such as rental and commercial real estate, from 10% to 5%, effective on Jan. 1, 2027. It would also restrict counties and municipalities to spending property tax revenue only specific categories including public safety, education, infrastructure, natural resource and flood control projects.
The current proposal is narrower than an earlier regular-session version, which would have phased in a path toward eliminating non-school homestead property taxes entirely; lawmakers instead adopted a fixed $150,000/$250,000 exemption structure during a June 2026 special session, and the ballot summary language was subsequently revised following an August 2026 court order finding the original wording misleading.
Oklahoma State Question 847
Oklahoma voters will consider State Question 847, a legislatively referred constitutional amendment that would lower the annual caps on increases in a property’s assessed “fair cash value,” beginning with the 2027 tax year.9 The cap for homestead and agricultural property would drop from 3% to 1.75%, while the cap for other real property, including commercial and rental property, would drop from 5% to 4%.
The measure would not directly reduce property tax bills or rates but would instead slow the rate at which taxable value, and corresponding tax liability, would increase each year. It would also restructure the existing senior property tax freeze, retaining the full freeze for seniors at or below the HUD-determined county income threshold while creating a new tiered cap, ranging from 0.35% to 1.75%, for seniors whose income exceeds specific thresholds.
Wyoming Proposition 1
Finally, Wyoming voters will consider Proposition 1, a proposal to exempt 50% of the assessed value of a qualifying homeowner’s primary residence from property taxation.10
Commentary
Unlike prior years, where SALT ballot measures were rather tame in asking voters to adopt wide-ranging changes to existing SALT legislative policies, this election cycle is markedly different, with several initiatives dominating the headlines. By far, the measure with the most coverage and the largest potential impact on SALT policy is the California Billionaire Tax, which illustrates both sides of the broader national debate over whether to raise taxes on wealth and high incomes or to constitutionally constrain future tax increases.
Proposition 40 would introduce an entirely new tax regime built around accumulated net wealth rather than a tax on income, receipts, or property ownership. That novelty is itself significant, but several specific features of the measure are likely to generate the most scrutiny.
The first relates to the retroactive aspect of the initiative. Because residency is determined as of Jan. 1, 2026, roughly ten months before the November 2026 vote and well before potential voter approval of the tax, individuals who were California residents on that date could become subject to this novel tax upon enactment.
Pairing a retroactively applied residency determination with the inherently fact-intensive nature of residency and domicile determinations is likely to invite disputes, particularly for individuals with homes, business interests, or personal connections in multiple states, and may be a focal point of any legal challenge to the measure.
The second is the breadth of the proposed tax base. In addition to publicly traded securities, the tax base includes amorphous categories such as intellectual property, partnership and LLC interests, and private-company stock that can be notoriously difficult to value. Publicly traded stock, and to a lesser extent artwork, can generally be valued by reference to established markets or comparable sales.
Private-company stock and intellectual property present a fundamentally different problem: in the absence of a market transaction, both taxpayers and the state would effectively need to construct a valuation from assumptions about future earnings, discount rates, marketability, and control, an exercise that is inherently subjective and likely to produce appraisal disputes between taxpayers and the state.
The third is implementation. No state currently imposes a wealth tax of this kind, let alone a one-time wealth tax. Accordingly, the measure raises practical questions that no state has ever addressed.
Specifically, how will California identify and verify billionaire status? Will it develop an in-house valuation team for what is designed as a one-time tax, or instead engage outside valuation firms to appraise the asset values reported by taxpayers? With passage of the initiative, California’s approach in this area would have immediate administrative cost implications and may set the stage for longer-term controversy and litigation costs.
The income tax measures facing voters in several states generally track each state’s particular political landscape. Republican-leaning legislatures in Iowa and North Carolina are proposing constitutional caps on income tax rates, while Democratic-leaning California is moving in the opposite direction with Proposition 3 making its top marginal rates permanent. Colorado, whose eight-member U.S. House delegation is evenly split, is presenting dueling measures to the electorate.
The results will provide important feedback on whether voters in these states generally follow the same voting patterns that have been seen in prior cycles, with North Carolina voters choosing lower income tax rates and California voters choosing to maintain higher ones. Colorado may be the most telling result of all, which may indicate the direction a relatively divided electorate leans when presented with income tax rate hikes.
Property tax relief is the common thread linking Florida’s Amendment 3, Oklahoma’s State Question 847, and Wyoming’s Proposition 1, each of which responds to rising assessments and housing costs. Florida’s measure deserves particular attention because of the state’s tax structure: Florida has no personal income tax, which leaves local governments especially reliant on property tax revenue to fund schools, public safety, and other services.
A significant expansion of the homestead exemption, layered on top of a lower assessment cap for non-homestead property, could meaningfully constrain local budgets precisely because there is no state income tax to absorb the pressure or offset the lost revenue through other means.
That dynamic raises several issues worth monitoring. Florida’s new residency-based phase-in for the increased exemption could itself become a source of disputes, mirroring (on a smaller scale) the residency-timing concerns raised by California’s Proposition 40. Such a provision also complicates planning for individuals relocating to the state.
However, the residency requirement may also face a similar line of attack that taxpayers raised against New York City’s pied-à-terre tax and Rhode Island’s non-owner-occupied second-home tax. There, challengers are asserting, amongst other claims, discrimination-based constitutional challenges by claiming these taxes improperly burden nonresidents.
The new restriction on how counties and municipalities may spend property tax revenue could also constrain local budgeting flexibility even where overall revenue is adequate. And because all three states are pursuing relief through caps and exemptions rather than rate cuts, local governments may respond by leaning more heavily on fees, sales taxes, or other revenue sources to make up any shortfall, a trade-off taxpayers should watch for even as their property tax bills decline.
Ultimately, the 2026 election cycle can be viewed as a referendum on broader state tax policy trends. The results may provide an indication of whether voters favor additional taxation of wealth and higher income tax rates on higher-income taxpayers, or instead prefer constitutional and statutory constraints designed to limit future tax increases and provide greater predictability to taxpayers and businesses from a tax perspective.
1 California Proposition 40, Imposes One-Time Tax on Certain Taxpayers (Nov. 3, 2026), available in California Secretary of State, Voter Information Guide.
2 California Proposition 41, Prohibits New State Taxes That Exclude Revenues from State Spending Limit. Requires Audits for New State Special Taxes (Nov. 3, 2026), available in California Secretary of State, Voter Information Guide; California Proposition 42, Prohibits New State Personal Property Taxes and Certain Retroactive State Taxes (Nov. 3, 2026), available in California Secretary of State, Voter Information Guide.
3 California Proposition 3, Provides Permanent Funding for Schools and Health Care by Extending Existing Tax on High Incomes (Nov. 3, 2026), available in California Secretary of State, Voter Information Guide.
4 Colorado Proposition 87, Establish Graduated Income Tax and Dedicate New Revenue to Education, Healthcare, and Childcare Initiative (Nov. 3, 2026).
5 Colorado Proposition 136, Income Tax Rate Limit Initiative (Nov. 3, 2026).
6 Iowa Amendment 1, Two-Thirds Majority Vote for State Tax Law Changes (Nov. 3, 2026).
7 N.C. S.B. 1080, Session Law 2026-4, Income Tax Rate Limitation Constitutional Amendment.
8 Florida Amendment 3, Homestead Tax Exemptions, Property Assessments, and Spending Restrictions Amendment (Nov. 3, 2026).
9 Oklahoma State Question 847 (Nov. 3, 2026).
10 Wyoming Proposition No. 1, Homeowner's Primary Residence Property Tax Exemption Initiative (Nov. 3, 2026).
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