1. Financing State Government

2. 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”

3. 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

4. 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

5. 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

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

7. 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

8. AZ Sources of Revenue
Tax Revenue

9. AZ Sources of Revenue
Revenue By Source

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

11. Local Revenues
City of Tucson