The state tax refund is only included in income if you previously deducted it in 2017 as an itemized deduction on schedule A. If you either did not itemize in 2017 or chose to deduct sales tax rather than state income tax, then it is not reported and is ignored in 2018.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**