Alaska received the largest share of its general revenue — 88.5% — from non-tax sources in 2021, according to the Census Bureau. Wyoming and New Mexico received 70.6% of general revenue from non-tax sources, and Louisiana received 67.7%.
The Census Bureau calculates states’ general revenue based on four categories:
- Tax revenue
- Intergovernmental revenue (money from federal or local governments)
- Current charges (revenue from operating airports, educational institutions, hospitals, parking facilities, and more)
- Miscellaneous general revenue (investment earnings, sale of property, and other general revenue)
It does not include revenue from government-owned utilities, government-owned liquor stores, or social insurance trusts.
How do states collect revenues outside of taxes?
States receive revenue from a range of sources other than taxes, including funding from the federal government, fees, and other transactions like property sales and earnings on interest.
In 2021, the federal government provided $987.7 billion to states, accounting for 36.7% of all state general revenue that year.
Service charges and other non-tax sources of revenue accounted for 15.7% of states’ general revenues. These sources include any money generated by operating parking facilities, airports, hospitals, highways, parks and recreation, higher education institutions (including tuition and fees), natural resources, waste management, and more.
Which states collect the highest proportion of non-tax revenue?
All but eight states generated more than half of their general revenue from non-tax sources in 2021. In particular, Alaska, Wyoming, and New Hampshire had the largest proportions of non-tax revenue.
Where does Alaska collect revenue?
The federal government was the largest contributor to Alaska’s general revenue in 2021, providing 57.2% of the state’s general revenue. Alaska got 11.5% of its general revenue from taxes, and the remaining 31.2% came from charges and miscellaneous fees.
Alaska doesn’t have an individual income tax or state sales tax; instead, it collects a large portion of its annual budget from the petroleum industry. According to the Alaska Department of Revenue, in 2021, petroleum revenues were 23.5% of state revenue subject to appropriation. That figure includes revenue from taxes — including severance[1], property, and corporate income taxes — and royalty payments paid to the state-owned Alaska Permanent Fund Corporation for petroleum extraction, along with dividends from the fund paid out to residents each year.
Where does Wyoming collect revenue?
Wyoming collected 48.5% of its general revenue from the federal government in 2021. Less than a third of the state’s revenue — 29.4% — came from taxes. Among tax revenue, sales taxes were Wyoming’s largest tax category, amounting to $927 million and 14.5% of state general revenue. Interest on investments was the state’s largest non-tax revenue category aside from federal contributions, at 14% of general revenue.
Wyoming doesn’t collect an individual or corporate income tax. It relies on five categories of revenue from within the state: sales taxes, severance taxes, federal mining royalties, property taxes, and investment income.
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Where does New Hampshire collect revenue?
In 2021, New Hampshire received 40.3% of its general revenue from the federal government. Charges and other non-tax revenues amounted to 19.5% of general revenue, including the 5.7% of general revenue from charges on higher education like tuition and fees, student housing, bookstore sales, and related transactions.
New Hampshire does not collect general sales or individual income taxes, except on interest and dividends. Still, over one-third of the state’s revenue (35.4%) came from taxes in 2021. That includes the 10.8% of general revenue earned from selective sales taxes on products like gasoline, alcohol, and tobacco, and the 11.1% from corporate income taxes.
Which states collect the lowest proportion of non-tax revenue?
California had the lowest share of non-tax revenue in 2021, bringing in 39.6% of its revenue came from non-tax sources. Minnesota was next, with 40.2%, followed by Illinois (43.0%), Connecticut (43.3%), and Nevada (44.2%).
How did the pandemic affect state revenue?
Total state general revenues rose in 2020 and 2021, driven by increases in federal funding. In 2020, state tax revenues declined slightly from 2019, while money from the federal government increased 18.0% (adjusted to 2021 dollars). Federal dollars for pandemic relief provided by the CARES Act increased eight states’ federal funding by more than 50%.
In 2021, revenue from the federal government increased another 15.4%, while tax revenues increased a similar 15.3% (adjusted for inflation). States received $987.7 billion in general revenue from the federal government and $1.3 trillion in tax revenues.
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[1] Severance taxes are imposed distinctively on removal (severance) of natural resources (e.g., oil, gas, coal, other minerals, timber, fish, etc.) from land or water and measured by the value or quantity of products removed or sold.
