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tax revenue

17 Percent Of State Tax Revenue Comes From Auto Sources

A new report from a leading industry research group reveals that more than 17 percent of Arizona’s total tax revenue is generated by the auto industry and from the state’s drivers and auto owners.

In a nationwide study released this week, the Center for Automotive Research in Ann Arbor, Michigan found that in 2010 the State of Arizona collected more than $1.74 billion from car owners, dealers, drivers and auto industry workers, totaling a full 17 percent of the total tax revenue for the state. Arizona ranks in the top third of all states in percentage of tax revenues generated by the auto industry. The national average is 13 percent.

“This study confirms that the U.S. auto industry has a huge economic impact in Arizona and across the nation,” said Mitch Bainwol, President and CEO of the Alliance of Automobile Manufacturers. “Between taxes and fees paid by auto owners, income taxes paid by auto industry workers, fuel taxes paid by drivers, and corporate taxes paid by dealerships and other auto related businesses, the automotive sector is contributing a very significant share of revenue to the budgets of every single state.”

“In Arizona, families and businesses paid $723 million in sales taxes on new and used vehicles, service and parts,” said Bobbi Sparrow, President and CEO of the Arizona Automobile Dealers Association. “Add in another $201 million in registration and license fees, and Arizona drivers are kicking in a major share of the state’s tax base every year.” Specifically, in calendar year 2010, the State of Arizona collected:

• $382 million in new vehicle sales taxes
• $240 million in used vehicle sales taxes
• $101 million in sales taxes on auto parts and services
• $797 million in taxes from fuel sales
• $201 million in registration, licensing and title fees
• $19 million in business and employee taxes from dealerships, manufacturers and suppliers

The production and sale of cars is a massive economic driver for the US economy. National revenues from car sales alone totaled over $564 billion in 2010, an increase of 17 percent from the previous year. The manufacture and sales of parts, along with repairs and service, account for another $173 billion in economic activity. So, automobiles drive more than $735 billion into the economy each year.

“In this country, 8 million people are employed directly and indirectly as a result of the manufacture, sale and repair of automobiles,” added Bainwol. “Those 8 million people earn $500 billion in compensation. These are American families living all over this country. In many communities, they form the backbone of local and even state economies. And as jobs are added, these numbers will climb. So auto policy is central to the economic vitality of virtually every state.”

For more information on the Center for Automotive Research’s report, visit their website at cargroup.org.