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States Government Tax Collections Swelled In FY 1999

Puerto Rico would rank No. 2 in tax collections growth and No. 31 in per capita tax collections among 50 states


October 26, 2000
Copyright © 2000 CARIBBEAN BUSINESS. All Rights Reserved.

State government tax revenues increased by 5.2% from fiscal year (FY) 1998 to FY 1999, according to the latest estimates released by the U.S. Department of Commerce.

State governments collected $499.51 billion in tax revenues in FY 1999, compared with $474.99 billion in tax revenues in FY 1998.

For FY 1999, the major categories of state tax included: individual income taxes, selective sales taxes (such as those on motor fuels, insurance premiums, public utilities, and tobacco products), and license taxes (such as motor vehicle license, corporation license, and occupation & business license).

State tax collections from individual income taxes rose by 6.9% to $172.34 billion in FY 1999, compared with $161.25 billion in FY 1998.

Selective sales tax revenues amounted to $741.54 billion in FY 1999, 3.9% or $28.11 billion more, compared with $713.43 billion in FY 1998. Among the major selective taxes, tobacco products tax revenues raised the most (5.7%), followed by insurance premiums (4.6%), alcoholic beverages (3.5%), and motor fuels (3.1%).

Meanwhile, license tax collections edged up 2.4% to $304.04 billion in FY 1999, in comparison with $296.83 billion in FY 1998. Within that category, corporation license tax revenue increased the most (3.8%), followed by hunting & fishing licenses (3.7%), and motor vehicle license (2.9%).

Six states showed tax revenue decreases: Alaska (down 31%), Wyoming (down 5%), New Mexico (down 3%), Kansas (down 2%), Louisiana and Hawaii (down less than 1% each). The states with the largest increases in tax collections were Arkansas (up 12%), Nevada, Michigan and Virginia (up about 9% each), and Arizona (up 8%). According to the Commerce Department, the changes reflect changing economic conditions or alterations in the tax structure or rates, or both.

Although U.S. Department of Commerce estimates do not include Puerto Rico tax revenues, the Puerto Rico Planning Board does provide figures that allow us to compare the island with the 50 states.

Puerto Rico’s tax collections hit $6.51 billion in FY 1999. This represents a 10.2% or $604 million increase over the prior year, in which revenues totaled $5.90 billion. Therefore, Puerto Rico would rank No. 2 among the 50 states in terms of tax collections growth for FY 1999

Puerto Rico tax collections from individual income and excise tax sources totaled $3.78 billion in FY 1999, representing 58% of total tax collections.

In addition, Puerto Rico would rank No. 31 in tax collections per capita with $1,683, right behind Virginia with $1,682, and below the national level ($1,835).

State governments’ reliance on specific taxes varies considerably. Several states obtained most of their tax revenue from individual income and general sales taxes. Hawaii led this group with 79%, followed by Georgia (78%), Utah (76%) and Nebraska (75%).

On the other hand, these two revenue sources accounted for less than 50% of state government taxes in eight states: Texas (49%), Nevada (48%), North Dakota (44%), Wyoming (41%), Delaware (38%), Montana (35%), New Hampshire (6%), and Alaska, which did not impose either tax.

Nationally, per-capita taxes collected by states averaged $1,835 for every man, woman, and child, according to figures provided by the Department of Commerce. However, the range varied among individual states. For example; per capita taxes averaged highest in Connecticut ($2,932), Delaware ($2,695), Hawaii ($2,671), Minnesota ($2,614), and Massachusetts ($2,386).

Michigan, Wisconsin, California, Washington, New York, New Jersey, Maine, and New Mexico also had state government tax collections of more than $2,000 per capita.

The lowest per capita state taxes were in New Hampshire ($891), South Dakota ($1,185), Texas ($1,281), Tennessee ($1,311), Louisiana ($1,380), Alabama ($1,380), Alaska ($1,461), Colorado ($1,476), South Carolina ($1,499), and Montana ($1,547).

This Caribbean Business article appears courtesy of Casiano Communications.
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