State and Local Tax Policy: What are the sources of revenue for state governments?
States collected general revenues totaling nearly $1.4 trillion in 2006. Nearly one-third of that revenue came as transfers from the federal government and, to a much smaller degree, from local governments. The remainder came from state taxes, fees, and miscellaneous receipts.
- States received about $420 billion in intergovernmental transfers in 2006, which accounted for 31 percent of their general revenues.
- Sales and gross receipts taxes were the largest source of states’ own tax revenues in 2006, totaling about $333 billion or one-fourth of general revenues.
- Individual and corporate income taxes accounted for one-fifth of state general revenues in 2006. The individual share totaled $246 billion and the corporate share about $47 billion.
- Other taxes, charges, fees, and miscellaneous receipts totaled $340 billion in 2006, about one-fourth of general revenues.
