Thinking Arizona
Facts to Inform the Public Discourse
Different Strokes For Different States
February 1, 2011
Oregon relies on its personal income tax to provide more of its revenue – 83 percent – than any other state. The tax rate is 11 percent, tops in the country, but voters there do not want a sales tax.
Florida does the opposite. It does not have a personal income tax. Instead it relies on the sales tax to provide more of its revenue – 76 percent – than any other state.
New Hampshire gets 22 percent of its revenue, more than any other state, from the corporate income tax. That coupled with a high percentage of other taxes means it taxes neither sales nor personal income.
Alaska avoids both of those taxes as well. With rich oil and gas reserves, it relies largely on severance taxes. They provide the bulk of other taxes that constitute 91 percent – more than any other state – of Alaska revenue.
Arizona is more of an equal opportunity taxer. It uses them all but doesn’t stand out particularly in any one category.
That said, the emphasis is on sales tax. Even prior to the increase of a percentage point in the tax rate, Arizona took in 41 percent of its revenue from that source. That’s the 10th highest reliance on sales tax in the country.
Personal income tax represents 29 percent of the state’s revenue. By comparison with other states, that’s the 37th highest reliance on that revenue source.
Corporate income tax provides 5 percent of revenue. That ranks 23rd in reliance although fully half of the 50 states fall into the 4 to 6 percent range.
Buoyed by the transfer of other taxes into the general fund, what is categorized as “other taxes” provided 25 percent of Arizona’s revenues in fiscal 2010. That is 19th highest in the country.
State by state comparison of revenue percentage by source.
