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Auto Accounts for 13 Percent of All State Tax Revenues, Study Finds

April 12, 2012

The production, sales and service and use of automobiles contributed $91.5 billion to state government tax revenues in 2010 and at least $43 billion to federal government tax revenues, according to a recent study conducted by the Center for Automotive Research (CAR).

Kim Hill, director of the Sustainability and Economic Development Strategies group at CAR and the study’s lead analyst, said the automotive industry accounts for 13 percent of all state government tax revenues.

The financial sources include income taxes paid by employees working in the automotive sector ($15 billion), taxes and fees on fuels, registrations and licenses paid by drivers ($89 billion), and corporate income taxes and licensing fees paid by automotive companies themselves ($750 million).

“This analysis furthers our understanding of how the automotive sector has a substantial impact on the U.S. economy by contributing to the fiscal stability of state and federal governments,” Hill said. “As economic conditions continue to improve, auto companies could see an increase in sales and employment that would generate additional state and federal tax revenues.”

The study also provides a detailed breakdown of automotive tax revenues for each U.S. state. The view the full report, click here.

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