States Collecting More Tax Revenues

State tax collections grew by 6.7 percent between 1994 and 1995, climbing over $400 billion for the first time, according to a new report from the Tax Foundation.(see chart http://www.taxfoundation.org/prstatetaxrateschart1.html). Economist Arthur P. Hall reports that: The three fastest growing categories of state collections were corporate income taxes (14 percent growth), property taxes (11.4 percent growth) and tobacco taxes (11.2 percent growth). But total state collections grew 0.26 percent faster than personal income between 1994 and 1995, compared with an inflation-adjusted average of 0.22 percent for 1985 to 1995. The states vary greatly in terms of what kinds of taxes are used to collect revenue. For example: Florida, Nevada, South Dakota, Tennessee, Texas and Washington rely on general sales and use taxes for a majority of their state revenue collections. But Alaska, Delaware, Montana, New Hampshire and Oregon get none of their revenue from sales taxes. Massachusetts, New York and Oregon rely on their state individual income tax for a majority of their state tax revenue. Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming collect no state individual income tax revenue. Using different measures, a state's tax burden can differ substantially. For example, Mississippi is ranked 39th in terms of tax burden per capita, but is ranked 9th in terms of tax burden per $1,000 of personal income. On the other hand, New Jersey is ranked 13th in per capita tax burden, but 42nd in terms of tax burden per $1,000 of personal income. Source: Arthur P. Hall, "State Tax Rates and 1995 Collections," Special Report No. 64, October 1996, Tax Foundation, 1250 H Street, NW, Suite 750, Washington, DC 20005, (202) 783-2760. For an online version of this Special Tax Foundation Report http://www.taxfoundation.org/prstatetaxrates.html.