State & Local Government Taxation

State & Local Government Taxation

The two most important taxes for state and local governments are sales taxes and property taxes. Sales taxes are the primary source of income for state governments. Property taxes are the primary source of income for local governments. State and local governments also receive a significant amount of revenue from the federal government.

U.S. State and Local Government Receipts by Category
(Billions of dollars)
Fiscal Year[2]
Total
General Revenues[3]
Property Taxes
Sales & Gross Receipts Taxes
Individual Income Taxes
Corporation Net Income Taxes
Revenue from the Federal Government
All Other Revenues
2001-2002
1,685
279
324
203
28
361
490
2000-2001
1,647
264
320
226
35
324
478
1999-2000
1,541
249
309
212
36
292
443
1998-1999
1,434
240
291
189
34
271
410
1997-1998
1,366
230
275
176
34
255
396
1996-1997
1,289
219
261
159
34
245
371
1995-1996
1,223
209
249
147
32
235
351
Source: Economic Report of the President, Feb. 2005





When federal, state, and local government taxes are added together, the overall tax structure in the U.S. is almost proportional.