Financing State Government

Tax Revenue 3 Constitutional limits on taxes States cannot tax goods or products that move in or out of the state or country States cannot tax federal property States cannot use taxing power to deprive people of “equal protection of the law”

Tax Revenue The Sales Tax Sales taxes account for about half the total tax revenue of state governments General Sales Tax – Broad range of taxable goods Excise Tax – Selective sales tax imposed on certain items i.e. gas, liquor, cigarettes

The State Income Tax Tax on the earnings of individuals and corporations Accounts for roughly 30 percent of state revenue Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming do not have state income taxes

Other Taxes Professional License fees (doctors, realtors, lawyers, electricians. . .) Service License fees (bus lines, amusement parks, etc.) Severance taxes – tax on removal of natural resources Many smaller less known: state property tax, estate tax

Other Sources of Revenue Borrowing Bonds Lotteries Congress passed legislation permitting lotteries in 1963 States generally receive about 45 percent of the money

Other Sources of Revenue Intergovernmental Revenue 20 Percent of state funding comes directly from the federal government Federal Mandates Orders by the federal government to state and local government to receive money

AZ Sources of Revenue Tax Revenue

AZ Sources of Revenue Revenue By Source

Local Revenues County Property Tax Sales Tax Intergovernmental Transfers Fines and fees

Local Revenues City of Tucson