US State Revenues Up 3.9 Percent
December 1, 2010 Taxation in USA
State tax revenues across the USA rose by an overall figure of 3.9 percent in the last quarter, becoming the third consecutive quarter of growth.
On November 30th the Nelson A. Rockefeller Institute of Government released its latest quarterly report on state tax revenues across the USA. According to the release, overall tax revenues in the July-to-September quarter rose by 3.9 percent, if compared to the same period in 2009. Even in inflation-adjusted terms, revenues were still up by 2.6 percent for the quarter against the previous year.
The latest quarter’s revenue results represent the third consecutive period of improved tax collection results in the USA, with similar growth levels being unseen since the fourth quarter of 2007. According to the preliminary tax data in the report, the overall personal income tax revenue figure for the surveyed states rose by 4.7 percent. The revenues from sales taxes grew by 4.1 percent. However, corporate income tax collections contracted for the 5 quarter in a row, with a current rate of 2.5 percent.
Data was made available on the tax revenues from 48 states, with 42 showing revenue growth. North Dakota had the greatest revenue growth figure, at 29.5 percent. Alaska reported the greatest revenue drop, at an overall figure of 48.1 percent. Hawaiian tax revenues fell by 13.6 percent, the second most significant in the country, due heavily to an 85.9 percent drop in corporate income tax.
The report explained that the increasing revenue figures can be attributed to revised state tax regulations, which are explicitly increasing collections. However, the Institute’s research indicates that the growth can also be partially attributed to a slowly recovering economy. While the latest revenue figures are an improvement over those recorded for the year 2009, the report still warns that USA state governments can expect to face continued budgetary challenges and pressure. The report also says that state revenue figures are still far below pre-recession years, and will likely stay low for years to come.
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