Written By: Lynly Lumibao
Taxes are a major source of revenue for state governments in the United States, representing nearly half of state government revenue over the last 10 years. Along with taxes, other general revenue activities for state governments include intergovernmental revenue (such as shared taxes and grants from other governments), operational revenue (charges for services or products), and miscellaneous revenue (all other general revenue).
Fiscal year 2012 marked the second consecutive year of state tax collection growth, bringing in revenues of $794.6 billion for state governments, an increase of $34.3 billion from 2011. Is this a sign that the fiscal health of state governments is improving?
Statistics released today by the Census Bureau provide a look at the tax collections of U.S. state governments. These data, coming from the 2012 Annual Survey of State Government Tax Collections, serve as one of the indicators of a state’s fiscal health. Additionally, this survey is our first look at finance data from the 2012 Census of Governments. One of the functions of the 2012 Census of Governments is to provide authoritative benchmark data on public finance, including taxes.
So how do we define these tax revenues? Presented in the infographic available here is a definition of the five broad categories of taxes, including property taxes, sales and gross receipts taxes, license taxes, income taxes, and other taxes. Below the definitions of the five tax categories, we show a breakdown of the total percentage of state tax revenue. The different categories of tax revenue show us the foundation of a state’s resources.
In 2012, the largest category of state government tax revenue is sales and gross receipts, at $374.8 billion (47.2 percent). Sales and gross receipts taxes is distinguished between general sales and selective sales. Other drivers of state tax revenue were income taxes, which represented $322.1 billion (40.5 percent) of total state tax collections and license taxes measured at $54.0 billion (6.8 percent of total state tax revenue).
Although these new statistics provide a positive reflection of state tax collections, it is still not enough data to determine whether state government revenues will continue to increase. Between 2001 and 2006, total state tax revenue increased by 27.9 percent from $559.7 billion to $716.0 billion—a rapid rate of growth. Between 2007 and 2012, we see that rapid growth decline, and total state tax revenue increased slightly by 4.9 percent, a decline of 23 percentage points from 2001 to 2006. Before 2009, total state tax collections experienced an increase each year. In 2009, states began to see a decline in their tax revenue receipts. Total state tax collections only started to report positive growth again in 2011. While this continued growth in tax revenue for 2012 is good news for state governments, the pace of growth is still moderate.
For more details, please see the 2012 Annual Survey of State Government Tax Collections page.
These data are also now in American FactFinder, the first survey from the Census Bureau’s Governments Division included in this online data search program.
Read the news release.
For more information on the 2012 Census of Governments, please see the 2012 Census of Governments page.