Inversions have been in the news consistently this summer as multiple companies have looked for legal paths away from the U.S. corporate tax system. Burger King became the latest corporation to add to the list after they...
- Report: Forty-Five States Collected Less Revenue in 2009 ...
Report: Forty-Five States Collected Less Revenue in 2009 than in 2008
Many States Saw Double-Digit Drops Despite Enactment of Tax Increases
Washington, DC, May 13, 2010 -- State tax revenues fell 8.9 percent nationwide from fiscal year 2008 to 2009, with 45 states seeing a decline in state-level tax collections, according to a Tax Foundation analysis of new Census data. Sixteen states experienced double-digit drops.
Tax Foundation Fiscal Fact, No. 225, "State Revenue Changes from 2008 to 2009," compares tax revenues by state as well as tax revenue by type to identify sources of tax volatility. The Fiscal Fact is available online at http://www.taxfoundation.org/legacy/show/26297.html.
"Stable revenue is an important goal for state tax policy, and the year-to-year percentage change by tax revenue source can give us a rough idea of the volatility of certain taxes," said Tax Foundation Economist Kail Padgitt, Ph.D., who authored the report. "Corporate and individual income taxes have the greatest amount of volatility, while sales taxes tend to be more stable. Many states, however, have made their sales taxes more volatile by excluding groceries and other large areas of consumer goods and services."
From fiscal year 2008 to 2009, revenue increased in fives states: Iowa (1.3 percent), North Dakota (4.3 percent), Oregon (1.9 percent), South Dakota (0.9 percent) and Wyoming (13.9 percent). Sixteen states saw decreases of 10 percent or more: Alaska (51.9 percent), Arizona (19.7 percent), California (15.0 percent), Colorado (10.3 percent), Connecticut (12.1 percent), Florida (11.5 percent), Georgia (11.7 percent), Idaho (14.1 percent), Massachusetts (11.7 percent), New Jersey (11.9 percent), New Mexico (15.1 percent), North Carolina (10.6 percent), South Carolina (16.8 percent), Tennessee (10.0 percent), Utah (11.9 percent) and Virginia (12.8 percent).
The report also compares the percentage change in tax revenue by type of tax, including state-level property taxes (which in most states refers to personal property such as cars and boats), individual income taxes, corporate income taxes, general sales taxes and selective sales taxes. Nationally, corporate income tax revenue declined the most -- by 23.1 percent from 2008 to 2009.
Finally, the report examines year-to-year changes in tax revenue over the past decade, underscoring the volatility of corporate taxes, which have declined by as much as 24.7 percent from 2001 to 2002 and increased by as much as 21.3 percent from 2004 to 2005.
"Although state tax revenue decreased significantly during fiscal year 2009, the decrease is almost exactly matched by earlier years of major increases," Padgitt said. "Over the last decade, adjusting for inflation, state tax revenues have increased by 6.1 percent. When controlling for population, tax revenues are down about 1 percent."
The Tax Foundation is a nonpartisan, nonprofit organization that has monitored fiscal policy at the federal, state and local levels since 1937.
To schedule an interview, please contact Natasha Altamirano, the Tax Foundation's Manager of Media Relations, at (202) 464-5102 or email@example.com.
The Institute on Taxation and Economic Policy (ITEP) released a report last month titled Who Pays? A Distributional Analysis of the Tax Systems in All 50 States. The study...
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