In claiming the state refund, what matters is itemizing in the prior year, not the current. If you itemized in 2015, and claimed state income tax as a deduction, the state tax refund you got in 2016 is taxable.
If you choose not to itemize in 2016, the state refund would not be taxable in 2017. If you itemize in 2016, and use the state sales tax instead of the income tax, then your state tax refund is also not taxable the next year.
