ADVISORY COMMISSION ON INTERGOVERNMENTAL RELATIONS 

April 1986 

Private Citizens 

James S. Dwight, Jr., Arlington, VA 

Daniel J. Elazar, Philadelphia, PA 

Robert B. Hawkins, Jr., CHAIRMAN, Sacramento, CA 

Members of the United States Senate - 

David Durenberger, Minnesota 

William V. Roth, Delaware 

James R. Sasser, Tennessee 

Members of the U.S. House of Representatives 

Sander M. Levin, Michigan 

Robert S. Walker, Pennsylvania 

Theodore S. Weiss, New York 

Officers of the Executive Branch, Federal Government 

William E. Brock, 111, Secretary, U.S. Department of Labor 

Mitchell E. Daniels, Jr., Assistant to the President for Political 

and Governmental Affairs 

Edwin Meese, 111, Attorney General, U.S. Department of Justice 

Governors 

John Carlin, Kansas 

Ted Schwinden, Montana 

John H. Sununu, VICE CHAIRMAN, New Hampshire 

Richard L. Thornburgh, Pennsylvania 

Mayors 

Ferd Harrison, Scotland Neck, North Carolina 

William H. Hudnut, 111, Indianapolis, Indiana 

Robert Martinez, Tampa, Florida 

Joseph P. Riley, Jr., Charleston, S.C. 

State Legislators 

John T. Bragg, Deputy Speaker, Tennessee House of Representatives 

Ross 0. Doyen, Kansas State Senate 

David E. Nething, Majority Leader, North Dakota State Senate 

Elected County Officials 

Gilbert Barrett, Chairman of the Board, Dougherty County, Georgia 

Philip B. Elfstrom, County Commissioner, Kane County, Illinois 

Sandra R. Smoley, Supervisor, Sacramento County, California 
Tax Capacity of the States 

AN INFORMATION REPORT 

ADVISORY COMMISSION ON 

INTERGOVERNMENTAL RELATIONS 

WASHINGTON, D.C. 20575 

APRIL 1986 

M-I 48 

PREFACE 

Over the years, the Advisory Commission on Intergovernmental Relations (ACIR) has been concerned 

with developing a yardstick for measuring the capacity 

of individual states to raise revenues that would be 

more sophisticated and more accurate than the per capita personal income measure most frequently used. Our 

continuing work with the Representative Tax System 

(RTS), the measure developed by ACIR for such a purpose, is presented in this report. 

In March 1982, ACIR adopted the following resolution: 

The Commission finds that the use of a single index, 

resident per capita income, to measure fiscal capacity, 

seriously misrepresents the actual ability of many governments to raise revenue. Because states tax a wide 

range of economic activities, other than the income of 

their residents, the per capita income measure fails to 

account for sources of revenue to which income is only 

related in part. This misrepresentation results in the 

systematic over and under-statement of the ability of 

many states to raise revenue. In addition, the recent 

evidence suggests that per capita income has deteriorated as a measure of capacity. Therefore, 

The Commission recommends that the federal 

government utilize a fiscal capacity index, such 

as the Representative Tax System measure, 

which more fully reflects the wide diversity of 

revenue sources which states currently use. The 

Commission also recommends that the system be 

further developed so as to improve the accuracy 

of the underlying data and the consistency of the 

methodology, and that Congress authorize sufficient funds and designate an appropriate agency 

to periodically prepare the tax capacity estimates. 

More recently, part of a report prepared by the U.S. 

Department of the Treasury (to be published as Studies 

of Federal-State-Local Fiscal Relations) has highlighted 

the continuing interest-and controversy-in measuring fiscal capacity. Per capita personal income is criticized as only a partial (and thus flawed) indicator. The 

report develops a new measure of fiscal capacity, Total 

Taxable Resources, that is based on the economic definition of comprehensive income. It also points out that in 

allocating grant funds, measures of fiscal capacity 

should be coupled with indicators of the cost of government services. 

In order to provide the basis for the best possible 

formulas for grants in aid, the Commission has initiated 

a comprehensive study of formula design, including 

measures of fiscal capacity and their use in allocating 

funds. The present volume (including the experimental 

alternatives to the standard RTS) should be viewed as 

the first step in ACIR's expanded program of research in 

this area. In future research, ACIR will be expanding its 

work on formulas and measures of fiscal capacity in its 

continuing effort to improve grant design by making 

grant formulas more responsive to interstate differences 

in tax bases. 

This information report, 1983 Tax Capacity of the 

Fifty States, presents the estimates for 1983 of tax capacity and tax effort among the states. It represents an 

attempt to provide elected officials, analysts, and citizens with factual and comparative data on the Representative Tax System and the relative tax policies and 

abilities of the individual states. We hope the information in this report will meet this objective. 

Robert B. Hawkins, Jr. 

Chairman 

ACKNOWLEDGMENTS AND 

RELATED REPORTS 

This report was prepared by Carol E. Cohen and Mark 

David Menchik, with technical assistance provided by 

Robert Lucke of the Congressional Budget Office. The 

ACIR is grateful to Mr. Lucke, formerly of ACIR, for his 

generous contribution. The research was conducted 

under the general supervision of Lawrence A. Hunter, 

research director. Full responsibility for the content and 

accuracy rests, of course, with the Commission and its 

staff. 

The RTS has a long history. In 1962 the Commission 

published its first estimates in an information report, 

followed by a 1972 report extending the measure to 

include certain classes of local government. The third 

Commission report on the subject, Tax Capacity of the 

Fifty States: Methodology and Estimates (M-134) was 

issued in March 1982; it contained estimates for 1979. 

The 1982 report analyzed the differences between the 

personal income measure, the Representative Tax System method, and other methods for measuring fiscal 

capacity. It remains the basic document explaining the 

RTS method and its value. 

In June 1982, 1980 estimates were released in mimeograph form. In September 1983, ACIR published 1981 

Tax Capacity of the Fifty States (A-93), containing the 

1981 estimates and the Commission recommendation 

about measuring fiscal capacity. The report 1982 Tax 

Capacity of the Fifty States (M-142), contains the 1982 

figures and also includes experimental alternatives to 

the standard RTS, which are further developed in the 

present volume. 

John Shannon 

Executive Director 

CONTENTS 

Introduction ............................................................. 1 

The Representative Tax System Defined .................................... 1 

The RTS Method Step by Step ............................................. 3 

The Case for the RTS Method .............................................. 3 

Analysis of the 1982 RTS Method .......................................... 7 

Experimental Modifications to the RTS Method ............................. 7 

Conclusion .............................................................. 11 

Table 1: Information Underlying the Representative Tax Rates of 

State Governments for 1983 ....................................... 2 

Table 2: Comparison of 1983 RTS and Per Capita Income Indices for 

Selected States ................................................... 4 

Table 3: Comparison of Changes Between 1982 and 1983 for Per Capita 

Income and RTS Indices. New England and Great Lake States ......... 4 

Table 4: Sources of Change in California's RTS Capacity Index ................ 6 

Table 5: RTS Tax Capacity Indices for 1983 and Prior Selected Years ........... 8 

Table 6: Representative Tax System Fiscal Capacity Indices. 1983 .............. 9 

APPENDICES 

Appendix A: State-by-State Graphs ......................................... 13 

Alabama ............................................................... 14 

Alaska ................................................................. 15 

Arizona ..................................................... 16 

Arkansas ............................................................... 17 

California .............................................................. 18 

Colorado ............................................................... 19 

Connecticut ............................................................ 20 

Delaware ............................................................... 21 

Washington. DC ......................................................... 22 

Florida ................................................................. 23 

Georgia ................................................................ 24 

Hawaii ................................................................. 25 

Idaho .................................................................. 26 

Illinois ................................................................. 27 

Indiana ................................................................ 28 

Iowa ................................................................... 29 

Kansas ............. .. ................................................. 30 

Kentucky ........... .... .............................................. 31 

Louisiana .............................................................. 32 

Maine .................................................................. 33 

Maryland ............................................................... 34 

Massachusetts .......................................................... 35 

Michigan ............................................................... 36 

Appendix C: Tax Base Definitions. Tax Bases and Sources for 

the 1983 Tax Capacity Estimates ............................... 99 

Appendix D: Summary Tax Tables for Past Years ............................ 105 

D-1 Total Taxes 1975 ................................................... 106 

D-2 Total Taxes 1977 ................................................... 107 

D-3 Total Taxes 1979 ................................................... 108 

D-4 TotalTaxesl980 ................................................... 109 

D-5 Total Taxes 1981 ................................................... 110 

D-6 TotalTaxesl982 ................................................... 111 

I983 TAX CAPACITY OF 

INTRODUCTION 

Over more than 20 years, a series of ACIR information 

reports have emphasized both the inadequacies of per 

capita income as a measure of the revenue capacity of 

the 50 state-local governments and the need for building 

a better yardstick for taking that measure. ACIR's earliest report on this subject dates back to 1962; it was the 

first to present an alternativethe Representative Tax 

System (RTSI-for measuring state tax capacity.' The 

RTS is designed to answer this question: What would be 

the total revenue of each of the 50 states if every state 

area applied identical tax rates-national averages-to 

each of 26 commonly used tax bases? 

This report, in addition to providing the 1983 estimates, discusses the RTS method and presents some of 

the work that is currently being done with it. After the 

definition of the Representative Tax System measures of 

tax capacity and tax effort and a step-by-step description of the RTS method, we lay out the strengths and 

weaknesses of the method. 

We then go on to provide an analysis of the 1983 

estimates. The last section, "Experimental Modifications to the RTS Method," illustrates its adaptability. 

Appendices A and B present detailed state-by-state 

and tax-by-tax data on tax capacities, tax revenues, and 

tax efforts for 1982. Appendix A is organized by state, 

showing graphically the RTS data on tax capacity and 

effort. Appendix B provides the full set of RTS tables 

containing the 1983 estimates, devoting a table to each 

of the 26 tax bases. Appendix C provides tax base definitions and explanations and cites data sources. Appendix D presents summary RTS tax tables for selected 

years prior to 1983. 

THE REPRESENTATIVE 

TAX SYSTEM DEFINED 

The Representative Tax System is a yardstick for 

measuring the tax capacity of each of the 50 state-local 

fiscal systems, plus the District of Columbia. It provides 

absolute and relative measures of the hypothetical abilities of the states to raise tax revenues, assuming every 

THE FIFTY STATES 

state applied identical tax rates to each of the 26 commonly used tax bases. It also measures tax effort, or a 

state's actual tax revenues in relation to its hypothetical 

tax capacity. 

Tax Capacity 

The Representative Tax System method defines "tax 

capacity" as the dollar amount of revenue that each 

state would raise if it applied a nationally uniform set of 

tax rates to a common set of tax bases. The system is 

"representative" in that national average tax rates'are 

applied in each state to standardized tax bases. Because 

the same tax rates are used for every state, estimated tax 

yields vary only because of differences in the underlying bases. The tax capacity measure is not concerned 

with individual state-local tax policy choices such as 

whether or not a state utilizes a particular tax base. The 

capacity measure pertains only to the level of economic 

resources in any state, resources that by common practice may be said to be potentially taxable whether or not 

the particular state actually taxes those resources and 

regardless of the intensity with which a state utilizes 

those taxable resources. 

The RTS method defines a state's "tax capacity index" 

as its per capita tax capacity divided by the average for 

all states, with the index for the average set at 100. A 

state with an index of 120, for example, would have a 

capacity 20% above average, and one with an index of 

80, a capacity 20% below average. The tax capacity 

indices thus provide a measure of the relative taxing 

abilities of the states. 

All bases that are commonly subject to state and local 

taxation are used in the RTS calculations of tax capacity. Table 1 provides a breakdown of the 26 bases included, as well as the amount of nationwide revenue 

each generates and the average tax rate for each base. 

The estimated total state-local tax yields reflect the intensity of use of the various tax bases on a national 

basis, avoiding relying on arbitrary weights by simply 

adding together billions of dollars in property values, 

millions of dollars in income, and so forth. Appendix C 

provides a detailed description of each base and the 

data sources used in developing the RTS for 1983. 

For each tax base, the representative tax rate (shown 
Table 1 

INFORMATION USED TO COMPUTE THE REPRESENTATIVE TAX RATES 

OF STATE AND LOCAL GOVERNMENTS, 1983 

State-Local Tax 

Collections Tax Base 

Billions Percent 

of Dollars of Total 

General Sales and Gross 

Receipts Taxes 

Selective Sales Taxes 

Parimutuel 

Motor Fuel 

Insurance 

Tobacco 

Amusement 

Public Utilities 

Distilled Spirits 

Beer 

Wine 

License Taxes 

Vehicle Operator 

Corporation 

Hunting and fishing 

Alcoholic Beverages 

Automobile 

Truck 

Personal lncorne Taxes 

Corporation lncorne Taxes 

Property Taxes 

Residential 

Farm 

CommercialllndustriaI 

Public Utilities 

Estate and Gift Taxes 

Severance Taxes 

Oil and Gas 

Coal 

Nonfuel Mineral 

US. TOTAL 

Amounts In 

Millions 

977,290.2 

- 

14,669.1 

11 9,809.2 

223,441.7 

29,243.4 

46,119.9 

279,318.2 

431.1 

183.0 

519.4 

- 

154.2 

3.1 

66.7 

0.3 

125.8 

35.1 

275,244.8 

168,698.1 

4,005,844.4 

770,571 .O 

1,903,083.0 

492,387.2 

5,682.0 

- 

105,306.7 

20,177.0 

22,016.1 

- 

Description 

Representative 

Tax Rate 

Retail sales and receipts of selected 

service industries 

Parimutuel turnover from horse and dog 

racing 

Fuel consumption in gallons 

Insur. premiums: life, health, property and 

liability 

Cigarette consumption in packages 

Receipts of amusement and entertainment 

businesses 

Revenues: electric, gas and telephone 

companies 

Consumption of distilled spirits in gallons 

Consumption of beer in barrels 

Consumption of wine in gallons 

Motor vehicle operators' licenses 

Number of corporations 

Number of hunting and fishing licenses 

Licenses for the sale of distilled spirits 

Private automobile licenses 

Private truck registrations 

Federal income tax liability 

Corporate income 

Market value of residential property 

Market value of farm real estate 

Net book value of inventories, property, 

industrial plant and equipment of 

corporations 

Net book value of fixed assets for electric, 

gas and telephone companies 

Federal estate and gift tax receipts 

Value of oil and gas production 

Value of coal production 

Value of nonfuel mineral production 

NOTE: Detail may not add to totals owing to rounding. 

SOURCE: AClR staff compilation. 

in Table 1) is applied in every state regardless of 

whether a given state actually levies that tax. If this were 

not done, tax capacity would be understated in states 

that choose not to employ a varied mix of taxes. For 

example, Florida does not have an income tax, but 

income is included in Florida's tax capacity; similarly, 

Oregon does not have a retail sales tax, but retail sales 

are included as one base in its capacity computation. 

Because the same set of tax rates and bases is used for all 

states, an individual state's decision to stress or levy 

one type of tax or another does not affect the measurement of its tax base and tax capacity relative to other 

states. 

Tax Effort 

The tax capacity and tax effort measures are complementary in that the former is a measure of a state's tax 

base and the latter indicates the overall tax burden 

placed on that base. 

Mathematically, the tax effort index for a state is 

created by dividing the state's actual tax collections by 
its estimated tax capacity and multiplying by 100. The 

result may be interpreted as a measure of how much that 

state chooses to exploit all its potential tax bases relative to other states. If a state has a tax effort beneath the 

national norm, it will have an effort index under 100. 

An index of 115, for example, indicates that tax effort is 

15% above the national average. 

Tax effort, like tax capacity, can also be measured for 

each tax. The individual tax effort measures test how 

intensively a state uses each tax compared to all other 

states. Because the RTS uses standardized rates applied 

to standardized bases, the resulting tax effort measures 

give comparability among states that simple comparisons of statutory tax rates do not. For every state, sales 

tax effort, for example, is measured relative to retail 

sales (excluding food and drugs) whether or not a state 

actually exempts these or other items from the tax. A 

simple comparison of statutory sales tax rates can mislead because it does not take into consideration the 

great variation in the composition of the various state 

sales tax bases. 

Appendix A shows graphically for each state the 

trends in tax capacity and tax effort over time. Together, 

the two indices provide a summary of the general fiscal 

status of each state. However, the change in a state's tax 

effort over time results from change in either its tax 

revenues or its tax capacity. Thus, even if their revenues 

have remained in step with the national average, states 

such as those in the Mid-West might have rising tax 

efforts simply because their capacities have declined. 

tourist-rich state of Nevada, with a tax base of 

$9,564,756,000, the 6.6% rate produced 

$633,766,000, which amounts to $711 per resident. 

More spectacularly, although the representative 

rate of 6.67% on the value of oil and gas production 

produced an average of $30 per U.S. resident, in 

Alaska it produced $1,575 per resident. 

STEP 3 

Determine the tax capacity for each state by adding 

together the hypothetical yields for each of the 26 taxes. 

For example, the total capacity in the State of Mississippi from all bases is $2,074,400,000. For 

Alaska, total capacity is $1,531,798,000. 

STEP 4 

Determine the tax capacity per capita for each state. 

Tax capacity (i.e., the yield from applying the representative rates to the tax bases in each state) is 

simply divided by state population. Mississippi's 

$2,074,460,000 capacity is only $759 per capita. In 

contrast, with its small population and 

$1,531,798,000 capacity, Alaska's tax capacity per 

capita is $3,198. Overall, the 26 capacity calculations summed together produced a 1983 average of 

$1,176 per US. resident. 

STEP 5 

THE RTS METHOD STEP-BY-STEP 

Each step of the RTS method is described and illustrated below. The results produced at the end of Step 1 

are reported in Table 1. The data produced at the end of 

Steps 2 through 5, including tax capacity, tax capacity 

per capita, and the tax capacity index for each state, are 

reported in Appendix B and illustrated on a state-bystate basis in Appendix A. 

STEP 1 

Compute 26 representative tax rates according to the 

nationwide tax collections of all states and localities 

and the nationwide tax base amounts. For example, the 

1983 representative general sales and gross receipts tax 

rate of 6.6% was obtained by dividing the 

$64,755,780,000 of state and local general sales and 

gross receipts tax collections by national retail sales of 

$977,290,168,000 (excluding food and drugs). 

STEP 2 

Determine the hypothetical yield for each tax in each 

state by applying the representative (average) tax rate to 

that state's actual tax base. This hypothetical yield is the 

capacity under that particular tax. 

For example, when applied to the standardized 

measure of Mississippi's sales and gross receipts 

tax base of $6,811,219,000, the 6.6% representative 

sales and gross receipts tax rate produced 

$451,315,000 ($174 per capita). However, in the 

Determine each state's tax capacity index by dividing 

its tax capacity per capita by the U.S. average tax capacity per capita of $1,176. The results are multiplied by 

100 so that an index of 100 corresponds to the U.S. 

average tax capacity per capita. 

For example, Mississippi, with a per capita yield of 

$759, has an index of 68.2, meaning that Mississippi has only 68.2% of the average tax capacity. 

For Alaska, the index is 271.9, denoting capacity 

271.9% of the U.S. average. 

THE CASE FOR THE RTS METHOD 

The RTS provides a comprehensive yet understandable approach to measuring state-local fiscal capacity 

(the ability to raise revenues to provide public services). 

It strikes a balance between two extremes; it is neither 

so theoretical and difficult to explain that it loses its 

intuitive appeal in a political forum nor so oversimplified and rooted in the current tax practice of any one 

state as to provide no policy guidance. Although the 

RTS has been criticized as being too complex, it provides a measure of fiscal capacity which is much more 

comprehensive and useful to both state-local and federal officials than the measure most commonly used, the 

per capita income of the residents of each state.2 

The RTS estimates provide a truly unique form of tax 

policy guidance to state-local officials because they enable interstate comparison of tax capacity and utilization on a disaggregated tax-by-tax basis. As illustrated 

in the lower graph on each page of Appendix A, policy- 
Table 2 

COMPARISON OF 1983 RTS AND PER CAPITA INCOME INDICES FOR 

SELECTEDSTATES 

1983 Percentage Point 

1983 Per Capita Difference Between 

State RTS Index Income Index RTS and PC1 Indices 

Alaska 272 147 125 

Wyoming 182 102 80 

Nevada 147 107 40 

Texas 124 100 24 

Oklahoma 115 94 21 

SOURCE: AClR staff compilation. 

makers can see at a glance how, relative to other state Accuracy: 

taxes and to other state-local systems, a particular state incorporation of Tax Exportation 

is "under-utilizing" or "over-working" a certain tax. 

Nowhere else is this form of valuable comparative in- The first major advantage of the RTS over residents' 

formation made available to state and local policy- per capita income is that it provides a more accurate 

makers. measure of fiscal capacity. This advantage occurs not 

The RTS also can be a useful tool for federal policy- only because the RTS takes into account a broader range 

makers. Indices of interstate fiscal disparities are used of tax bases, but also because it implicitly and effecin equalizing formulas for numerous federal grant pro- tively captures the extent of states' tax exportation opgrams including General Revenue Sharing, Medicaid, portunities-the ability to collect taxes from nonresiand Vocational Education, to name just a few. Because dent~.~ The ability to export taxes depends, for example, 

the RTS is a more commehensive vardstick for measur- on how much of a state's tax base lies in industries 

ing state tax wealth than per capita income, it can pro- which can pass on taxes (such as severance taxes) to 

vide a better basis for accomplishing interstate fiscal nonresidents, and on the amount of taxes (such as sales 

equalization. Three major advantages of the RTS in this taxes in tourist areas) a state receives which are paid 

regard stand out. directly by nonresidents. In sharp contrast, per capita 

Table 3 

COMPARISON OF CHANGES BETWEEN 1982 AND 1983 FOR PER CAPITA 

INCOME AND RTS INDICES, NEW ENGLAND AND GREAT LAKE STATES 

Per Ca~ita Income Re~resentative Tax Svstem 

State and Region 

New England 

Connecticut 

Maine 

Massachusetts 

New Hampshire 

Rhode Island 

Vermont 

Great Lakes 

Illinois 

Indiana 

Michigan 

Ohio 

Wisconsin 

1982 Index 

124 

81 

109 

97 

97 

86 

109 

90 

99 

96 

97 

1983 lndex 

127 

84 

114 

103 

100 

85 

106 

90 

98 

96 

97 

Change 

1982-83 

+3 

+3 

+5 

+6 

13 

- 1 

-3 

0 

- 1 

0 

0 

Change 1982 lndex 1983 lndex 1982-83 

SOURCE: AClR staff compilation. 
income ignores tax exportation and thereby understates 

the tax capacity of a tourist-rich state such as Nevada or 

an energy-rich state such as Alaska. Table 2 illustrates 

this difference between the two measures by comparing 

the 1983 RTS and per capita income indices for selected 

states with high tax exporting opportunities. 

The advantage of the RTS in incorporating tax exportation is an extremely important one because of the 

difficulty of measuring exportation directly. By capturing a state's ability to export taxes to nonresidents, RTS 

has an advantage not only over the per capita income 

method but also over other approaches to measuring 

fiscal capacity-such as using a more comprehensive 

definition of incom+which attempt to measure and 

adjust for tax exportation directly. 

index grew by about three points from 1982 to 1983. 

Table 4 shows how. Most of the growth in the overall 

capacity index stems from increases in three important 

tax bases: general sales, personal income, and residential property taxation. The capacity index for general 

sales taxation, for example, grew from 11 1 to 115, contributing an increase of one point to overall tax capacity. 

Although the capacity for hunting and fishing licenses 

expanded hugely (from 61 to 105), that base is so small 

that its growth added only 0.1 points to the overall RTS 

index. Defined as they are in terms of economic and not 

fiscal categories, tax capacity indicators like personal 

income cannot be directly broken down into statutory 

tax bases, unlike the RTS. It is thus more difficult to 

explain year-to-year and state-to-state differences in 

non-RTS tax capacity indexes. 

Fiscal Sensitivity Adaptability 

The second major advantage of the RTS is that it is far 

more sensitive to changes in the economic and other 

conditions of states that affect their tax bases than is the 

per capita income measure. Since the ACIR has started 

to publish the RTS estimates on an annual basis, it has 

appeared that they track the underlying economic 

changes fairly well, and the associated implications for 

state-local finances very well. The greater sensitivity of 

the RTS estimates is clearly reflected in the data set 

forth in Table 3 which illustrate the sharply contrasting 

economic performances of the New England states and 

the Great Lake states between 1982 and 1983. Although 

in all cases (except Vermont) the RTS and the per capita 

income Index changes move in the same direction, the 

change as measured by RTS is generally of a larger 

magnitude, with a regional average in each case that is 

twice as large. To the extent that federal policymakers 

wish to provide recessionary aid, the RTS with its demonstrated sensitivity does a better job than per capita 

income in pointing up the need for countercyclical assistance. 

The RTS.is more sensitive than personal income to 

the changing fortunes of state treasuries because the 

RTS relies on tax bases that most states actually use. For 

example, because the RTS includes corporate income 

and sales tax bases, in addition to the personal income 

tax base, business cycle fluctuations are reflected more 

sharply than when personal income figures alone are 

used. As another illustration, changing oil prices may 

not strongly and quickly affect the per capita income of 

a state such as Texas, but they clearly have a large and 

immediate effect on the state's fiscal capacity. This is 

because the severance tax base plays a much greater role 

in determining the state's fiscal capacity than it does in 

determining residents' income. Likewise, residential 

property values (and the property tax base) are much 

more sensitive to the state of the national housing market than to changes in personal income flows. In this 

case the RTS accounts for unrealized, but nevertheless 

real, capital gains and losses in property values that are 

not recognized in the national income and product accounts. 

Table 4 displays an RTS characteristic that adds to its 

fiscal sensitivity. This is the ability to explain yearly 

changes in fiscal capacity in terms of easily understood 

changes in tax bases. For instance, California's capacity 

Yet another major advantage of the RTS is that it can 

be easily and simply adapted in response to specific 

criticisms. As Steven M. Barro and other critics have 

charged, the RTS has three particular shortcoming^.^ 

First, the standard RTS method used does not incorporate such important sources of revenue as user fees, 

rents, and royalties. The omission of these sources of 

revenue can create overstatement or understatement of 

fiscal capacity because of the uneven interstate distribution of rents and royalties and the varying reliance upon 

fees and charges. In the last section of the text of this 

report, we describe the methods used to estimate fiscal 

capacity, and show the effects of a number of experimental modifications we have made to the standard 

RTS, including an adjustment for user fees, rents, and 

royalties. 

The second major criticism of the RTS stems from the 

fact that in its standard version we apply national average severance tax rates to each state's mineral production-an action which may understate the tax capacity 

of a high tax rate state such as Alaska and also may 

overstate the capacity of a low tax state such as Texas. 

This criticism, of course, rests on the assumption that in 

the field of mineral taxation each state has already maximized its effective tax rate. We also take this criticism 

into consideration in our experimental modifications to 

the RTS method and therefore adjust the mineral tax 

capacity of each state to reflect its actual taxes on these 

bases. As a result, Alaska's fiscal capacity score receives 

a spectacular upward adjustment while that of Texas is 

lowered somewhat. 

Critics also contend that the RTS understates the capacity of states such as New York which have high rates 

for broad-based taxes such as those on sales, income, 

and property. They argue that this understatement of 

fiscal capacity occurs for two reasons. First, high effort 

states end up with lower retail sales and property values 

because high tax rates depress these tax bases. Second, 

by taking advantage of the federal deductibility provision, the residents of high tax states can export a larger 

share of the cost of their state and local government to 

Washington than can the residents of low tax states. 

Although it is not clear that these arguments require 

adjustments to the RTS (high tax rates may represent an 

"optimal" tax policy for that state and it may be argued 
that the effects of deductibility are accounted for in the Other criticisms have been made of the Representaother tax bases of the RTS system), a modified RTS can tive Tax System: 

also accommodate these criticisms; after making experimental adjustments for these sales and deductibility Only a partial conceptual base supports the RTS. 

considerations (also described below), the fiscal capac- (Certain competing measures are vulnerable to this 

ity rating of New York, for example, increased from 95 to criticism as well.) For example, the identification of 

101. separate tax bases under the RTS militates against 

Table 4 

SOURCES OF CHANGE IN CALIFORNIA'S RTS CAPACITY INDEX, 

1982 AND 1983 COMPARED 

General Sales and 

Gross Receipts Taxes 

Selective Sales Taxes 

Parimutuel 

Motor Fuel 

Insurance 

Tobacco 

Amusement 

Public Utilities 

Distilled Spirits 

Beer 

Wine 

License Taxes 

Vehicle Operator 

Corporation 

Hunting and Fishing 

Alcoholic Beverages 

Automobile 

Truck 

Personal Income Taxes 

Corporation Income Taxes 

Property Taxes 

Residential 

Farm 

Commercial/lndustriaI 

Public Utilities 

Estate and Gift Taxes 

Severance Taxes 

Oil and Gas 

Coal 

Nonfuel Mineral 

Effect of New Weights1 

Each Tax's 

Contribution RTS Capacity Indices for Individual Bases to Change in 

OVERALL RTS Index 11 5.9 

Change Overall lndex 

4.2 1 .O 

Reflects changes from 1982 to 1983 in the relative weighting of individual tax bases, corresponding to 

nationwide changes in those taxes' importance. 

NOTE: Detail may not add to totals owing to rounding. 

SOURCE: AClR staff estimates. 
the idea that the true underlying capacity to pay 

taxes depends on the comprehensive income and 

wealth of those taxed, not on statutory tax bases. In 

other words, the distinction between tax bases is 

artificial: It takes current income to pay property 

taxes, for example. 

Some states have statutory or constitutional restrictions against taxing personal incomes and other 

bases included in the RTS. However the RTS and 

other measures of comprehensive income, it must 

be remembered, derive from the ability to tax, rather 

than on actual taxing choices. Nevertheless, it may 

be useful to conduct research on whether laws closing off certain tax bases influence the rate of taxation on remaining bases. 

ANALYSIS OF 

THE 1983 RTS ESTIMATES 

Appendix B of this report presents, on a detailed 

tax-by-tax basis, the 1983 estimates of tax capacity using 

the standard RTS method. The total 1983 tax capacity 

indices, along with those for several previous years, are 

shown in Table 5 for each state. Over time, the RTS 

calculations have been based on largely consistent procedures, with the 1979 to 1983 estimates being the most 

consistent. As the RTS numbers in Table 5 are shown in 

index form with the national average equal to 100, they 

do not show the absolute change in the level of fiscal 

capacity over time, but do highlight uneven relative 

changes, as well as the extent of differences across 

states. For example, the states in the Southeast generally 

have been the poorest, with the tax capacity indices of 

some reaching down into the 70s, while the richest 

states, such as Alaska and Wyoming, can have indices 

over 200. 

The 1983 estimates illustrate the points made above 

with regard to the accuracy and sensitivity of the RTS 

method. The latest capacity estimates are for a year 

when the national economy was recovering from a severe recession that adversely affected the fiscal capacities of all states. These effects, however, were uneven 

across the nation. The RTS estimates indicate a relative 

strengthening of the tax bases in the New England 

states; a continued weakness in the old industrial belt 

and farm states; an expected slowdown or downturn in 

the fortunes of the energy-rich states; and general stability or growth of the western states, especially California. 

(It should be noted that due to the imperfect quality of 

some of the underlying data, movements of less than a 

couple of index points are probably not valid). 

The changes in the New England states between 1982 

and 1983 show gains among all the states, with all states 

increasing by five or more points. Some Mideastern 

states showed increases since 1982; others registered 

declines. 

The indices for the Great Lakes states show a region in 

severe fiscal decline. Since 1979, the states have shown 

decreases averaging 13 points. Illinois, for example, has 

gone from 112 in 1979 to 98 in 1983; Michigan has 

fallen from 104 to 90 over the same period. These decreases reflect both the weakness of the farm economy 

and the poor performance of the automobile and related 

industries. 

The energy-rich states were also hit hard by the recession and falling energy prices, so most have declined in 

capacity. Alaska declined from 312 in 1982 to 272 in 

1983. Texas (-6), Louisiana (-6), Wyoming (-19), Montana (-51, and most of the other states with large amounts 

of energy resources also showed reductions in 1983. 

Because prices have continued to decline, we would 

expect the 1984 data to reflect continued decreases in 

the relative fiscal capacities of these states. 

One interesting feature of the 1983 estimates is reflected in the measure of their standard deviation. The 

population-weighted standard deviation is a summary 

indicator of fiscal differences because it measures the 

dispersion of the states around the national average. 

Although the standard deviation is sensitive to outlying 

extremes, the weighing of state indices by population 

prevents the small population, energy-rich states from 

having too extreme an influence. In 1983 the standard 

deviation of the estimates has continued its decrease. It 

was 16.8 in 1983 versus 18.5 the year before. This reflects the decline in fiscal capacity of the energy-rich 

states. Given what we know about 1984 and 1985, we 

may well see further convergence in those years too. 

EXPERIMENTAL MODIFICATIONS TO 

THE RTS METHOD 

As mentioned above, the standard RTS tax capacity 

index has been criticized as a measure of fiscal capacity 

on several accounts. One criticism is that the RTS excludes nontax revenue sources such as user charges and 

royalties from leases of public lands. Another is that the 

tax bases used in the calculation of capacity are treated 

as being independent from a state's tax rates, when, in 

fact, they may be highly interrelated. The first problem 

is straightforward-many states receive significant revenues from user charges, and some states receive large 

payments from public land leases, such as from oil and 

gas producers. These additional revenue sources can be 

easily included in the RTS calculations. 

The second problem is more complex. The RTS uses 

tax bases that are observed under current state tax practices as a measure of what the bases would be if the 

states all levied the same tax rate. In the past we have 

ignored any possible interaction between a state's actual 

tax rate and its observed tax base. However, the theoretically appropriate tax base to use in the RTS calculation 

is not the observed base, but the unobserved base that 

would exist if a state, in fact, levied the national average 

tax rate. In the results that are presented below, this 

interaction effect has been estimated for the general 

sales tax base. Further research on the interaction of 

other taxes and bases clearly seems warranted. 

The All-Tax Adjustment 

In Table 6 we present five alternative estimates of 

fiscal capacity. The first set of figures is simply the 

standard RTS measure. The second set is based on the 

standard measure, except that all heretofore excluded 

taxes (3.3% of total collections in 1983) have now been 

included. Specifically, New York's stock transfer tax has 

been included in the RTS measure of fiscal capacity 

7 
Table 5 

RTS TAX CAPACITY INDICES FOR 1983 AND SELECTED PRIOR YEARS 

New England 

Connecticut 117 110 112 109 112 110 117 124 

Maine 8 1 84 82 80 80 79 84 90 

Massachusetts 98 98 95 93 96 96 101 107 

New Hampshire 110 102 102 96 97 95 100 108 

Rhode Island 9 1 88 87 84 84 80 8 1 86 

Vermont 88 94 93 85 84 84 89 94 

Mideast 

Delaware 123 124 120 110 11 1 11 1 115 118 

Washington, DC 121 1 18 123 110 111 111 115 117 

Maryland 101 101 101 99 99 98 100 99 

New Jersey 107 109 106 102 105 105 1 06 112 

New York 108 96 94 89 90 92 92 95 

Pennsylvania 9 1 98 99 93 93 90 89 88 

Great Lakes 

Illinois 114 112 112 112 108 104 99 98 

Indiana 99 98 100 98 92 9 1 89 86 

Michigan 104 101 103 104 97 96 93 90 

Ohio 100 1 04 104 101 97 94 92 89 

Wisconsin 94 98 99 100 95 91 87 87 

Plains 

Iowa 104 106 105 108 105 102 96 91 

Kansas 105 109 105 109 109 109 106 103 

Minnesota 95 97 100 105 102 100 99 97 

Missouri 97 96 96 97 94 92 9 1 89 

Nebraska 110 106 101 100 97 97 97 101 

North Dakota 92 101 99 109 108 123 115 ill 

South Dakota 9 1 94 9 1 95 90 86 87 87 

Southeast 

Alabama 70 77 77 76 76 74 74 75 

Arkansas 77 78 78 77 79 82 79 78 

Florida 104 102 101 100 100 101 104 104 

Georgia 80 86 84 8 1 82 81 84 87 

Kentucky 80 85 83 85 83 82 82 79 

Louisiana 94 97 99 104 109 117 113 107 

Mississippi 64 70 70 70 69 72 7 1 68 

North Carolina 78 85 83 82 80 80 82 87 

South Carolina 64 77 77 76 75 75 74 76 

Tennessee 78 84 83 8 1 79 79 77 80 

Virginia 86 93 9 1 93 95 94 94 96 

West Virginia 75 89 90 92 94 90 92 87 

Southwest 

Arizona 95 92 89 9 1 89 89 96 97 

New Mexico 94 97 98 103 107 114 115 108 

Oklahoma 102 98 101 108 117 127 126 115 

Texas 98 11 1 112 117 124 132 130 124 

Rocky Mountain 

Colorado 104 106 107 110 113 113 121 122 

Idaho 9 1 89 88 9 1 87 87 86 83 

Montana 105 103 103 113 112 114 110 105 

Utah 87 86 88 87 86 86 86 82 

Wyoming 141 154 154 173 196 21 6 201 1 82 

Far West 

California 124 110 114 1 16 117 115 116 119 

Nevada 171 145 148 154 154 148 151 147 

Ore on 106 100 104 106 103 99 99 95 

wa&ington 112 98 100 103 103 99 102 101 

Alaska 99 155 158 21 7 260 324 31 2 272 

Hawaii 99 109 107 1 03 107 105 117 114 

U.S. ~verage' 100 100 100 100 100 100 100 100 

Standard Deviation 14.6 10.4 11.4 13.7 15.7 18.5 18.3 16.8 

'Po ulation wei hted. 

SO~CE: ACI~ staff estimates. 
Table 6 

REPRESENTATIVE TAX SYSTEM FISCAL CAPACITY INDICES, 1983 

State 

Alabama 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Washington,DC 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey 

New Mexico 

New YorkNorth Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia 

Wisconsin 

Wyoming 

U.S. TOTAL 

(1 1 

Standard 

RTS lndex 

75 

272 

97 

78 

119 

122 

1 24 

118 

117 

1 03 

87 

I14 

83 

98 

86 

9 1 

1 02 

79 

lo7 

90 

99 

107 

90 

97 

68 

89 

105 

101 

147 

lo8 

112 

lo8 

95 

87 

11 1 

89 

115 

95 

88 

86 

76 

87 

80 

124 

82 

94 

96 

101 

87 

87 

182 

100 

(2) 

All Tax 

RTS lndex 

75 

268 

97 

78 

119 

122 

124 

1 I8 

117 

103 

87 

113 

83 

98 

86 

91 

102 

79 

lo6 

90 

99 

lo7 

90 

97 

68 

89 

105 

101 

146 

107 

112 

107 

96 

87 

110 

90 

114 

95 

89 

86 

76 

87 

80 

123 

82 

93 

96 

101 

87 

87 

1 80 

100 

(3) 

All 

Revenue 

RTS 

& 

75 

400 

95 

76 

1 I8 

119 

123 

119 

119 

101 

86 

111 

82 

99 

85 

90 

101 

78 

110 

88 

100 

lo8 

91 

97 

68 

90 

102 

99 

I38 

lo9 

116 

119 

97 

85 

110 

90 

lo9 

94 

89 

91 

75 

86 

79 

119 

8 1 

91 

96 

100 

84 

88 

172 

100 

(4) 

"Adjusted" 

All Revenue 

FITS lndex 

75 

55 1 

96 

75 

115 

116 

122 

121 

119 

101 

86 

111 

80 

99 

85 

89 

97 

81 

113 

84 

101 

lo6 

92 

98 

7 1 

88 

101 

98 

136 

104 

117 

119 

101 

85 

1 I6 

9 1 

112 

92 

90 

92 

76 

83 

78 

114 

79 

85 

95 

100 

82 

9 1 

175 

100 

(5) Per Capita 

Personal 

Income 

lndex 

79 

147 

91 

77 

113 

lo9 

127 

108 

135 

99 

89 

104 

82 

lo6 

90 

92 

105 

80 

88 

84 

111 

114 

98 

102 

69 

94 

85 

96 

lo7 

lo3 

121 

83 

111 

84 

100 

96 

94 

92 

98 

100 

79 

84 

82 

100 

77 

85 

104 

1 04 

78 

97 

102 

100 

'Standard RTS Index: This is the regular measure published by the ACIR. 

2All Tax RTS Index: This is the Standard RTS lndex plus all taxes that are excluded from the Standard RTS Index. 

3All Revenue RTS Index: This is the All Tax lndex plus user charges and rents and royalities. 

4"Adjusted" All Revenue RTS Index: This is the All Revenue RTS lndex plus adjustments for the retail sales, 

income tax, and severance tax bases. 

SOURCE: ACIR staff estimates. 
based on actual collections. The remaining miscellaneous tax revenue has been included based on personal 

income. 

As a quick comparison of columns 1 and 2 shows, 

there is very little difference between the "Standard" 

and the more comprehensive "All Tax" index. Excluding Alaska, the average difference between the two columns is only 0.3 points, disregarding the sign of the 

difference. 

The User Fee, Rent, and Royalties 

Adjustment 

The third capacity measure takes into account user 

charges (nonpublic utility) and rents and royalties. Included in rents and royalties are payments under the 

Mineral Leasing Act, which provides for a form of revenue sharing between the federal government and the 

states-mostly the western states-through mineral (including oil and gas) leases on federally owned land. In 

this index, the "tax" base for user charges is personal 

income, as it seems reasonable that the ability to charge 

fees is related to citizens' income. This proxy, however, 

is not reasonable in the case of rents and royalties because state-owned resources, such as oil and gas, are 

virtually unrelated to state personal income. In this case 

we chose to use actual receipts from rents and royalties 

as the proxy for this base. If states are in fact maximizing 

their return from their mineral rights, actual revenues 

would provide a good approximation of the capacity of 

a state to raise that kind of revenue. 

In this third set of estimates, larger differences (relative to the standard index) begin to appear. First of all, 

the greater weight placed on personal income tends to 

pull the indices toward the per capita income index (see 

the last column). Second, those states with high revenue 

yields from mineral royalties, such as Alaska, Louisiana, and New Mexico, have their indices increased. 

Because a substantial fraction of Alaska's oil revenue 

comes from lease royalties (as distinct from severance 

taxes), the state's index goes from 268 to 400. 

The "Adjusted" All Revenue Index 

The last set of capacity estimates is shown in column 

4. There are three adjustments that have been made to 

the All Revenue RTS index (column 3) to derive this set 

of estimates. 

1. The Severance Tax Adjustment. First, the treatment of the severance tax base has been changed from 

the standard RTS method to the treatment used for rents 

and royalties. That is, severance tax collections, instead 

of the value of the resources (oil, coal, gas, etc.) extracted, are used as the base. The argument for this, as in 

the case of rents and royalties, is that actual collections 

best represent the base because states are maximizing 

their revenue from natural resorces. For state-owned 

lands, it seems clear that states would try to maximize 

their revenue (over the resources' lifetime), and charge 

market prices for leases to mineral rights. This argument 

is not equally persuasive for severance taxes. For example, some state have low or zero severance tax rates, but 

it is unlikely that they would lease state-owned mineral 

rights for nothing. As plausible arguments can be made 

on both sides, we have included this adjustment to 

check how it affects the measure of capacity. A practical 

argument against using actual revenues in the RTS calculation, however, is that this practice would allow 

states to influence their measured fiscal capacity, and 

their severance tax policy. This conflicts with the principle that a state should not be able to influence its 

equalizing allocation directly. 

2. The Deductibility Adjustment. A second experimental modification we have made is to account for the 

deductibility of state and local taxes from the federal 

income tax. At present, the standard RTS tax base for 

the individual incorne tax is not income, but federal 

income tax liability by state. As the level of state taxes 

affects the federal liability, a more neutral measure of 

the base currently used would be federal tax liability 

without regard for the level of state taxes. Thus, we have 

estimated the effect of deductibility on federal income 

tax collections in each state, and have added this factor 

back into the individual income tax base.5 Looked at 

another way, the income tax base would not require 

adjustment for deductibility if income was used as the 

base, since the effects of deductibility on disposable 

income would be reflected to some degree in the other 

tax bases such as the consumption bases. 

3. The Sales Tax Adjustment. The third modification 

made for the "Adjusted" All Revenue RTS index was to 

the general sales tax base to account for base-rate interaction. Although the need for this type of adjustment is 

lessened if it is believed that each state chooses the 

optimal tax mix for its particular circumstances, we 

have nevertheless estimated the effects of such an adjustment by replacing the actually observed state retail 

sales base with an estimate of what it would have been if 

the state were employing the average state sales tax rate. 

This adjustment was estimated by a regression of the 

RTS base for general sales taxation (per capita fiscal 

capacity for that tax, SALES) on the per capita disposable income of state residents (PDY) and the state's 

average effective rate of sales taxation (RATE). RATE is 

also derived from RTS figures: It is sales-tax revenues 

divided by the estimated base and normalized so that 

the national average is 100. Logarithms were taken of 

SALES and PDY. The regression results are: 

R2 = 0.61; t ratios are in parentheses; n = 47. In estimating this equation Hawaii, Florida, and Nevada were 

excluded because of the considerable revenue they derive from sales to tourists and Wyoming was excluded 

because of its unusually high sales-tax collections per 

capita. Calculating at the mean of all variables and 

taking base erosion into account, the equation indicates 

that a 1% increase in the index of effective sales taxation 

resuls in a 0.12% increase in sales tax receipts. 

The regression equation was used to adjust each 

states sales-tax base, except for the four excluded states. 

For the states used in regression estimation the national 

average rate of sale taxation was inserted instead of the 

actual effective rate. Consequently, the tax-base erosion 

of states with high rates was corrected for, as was the 
base strengthening of states with low rates of sales taxation or no sales tax at all. As an example of the former, 

New York's base was estimated to be 10% higher, adjusting for its above-average rate. 

Further research will incorporate tax rates in neighboring states. Similar equations will be experimented 

with to show erosion in other tax bases and to indicate 

the linkage between related tax bases. 

Cumulative Changes from the 

Adjustments 

The results from performing these adjustments to 

reach the "Adjusted" All Revenue RTS index are shown 

in column 4 of Table 6. The effect of these changes is 

fairly minor in many states, illustrating the robustness 

of the RTS method. The most significant changes often 

occur in the energy-rich states where actual severance 

collections do not match their bases due to tax rates 

higher or lower than the national average. Although the 

other adjustments (such as that for the sales tax base) are 

relatively minor for most states, they are significant for 

some. For example, in the case of New York, the state's 

index was raised from 95 to 101 owing to the changes 

made here. 

Another effect of the experimental modifications to 

the RTS is to bring this index into closer agreement with 

per capita personal income. This is because many of the 

adjustments rely on calculations using either personal 

income or disposable personal income. Excluding 

Alaska, the average difference between the standard 

RTS and the personal income index is 10.0 points. As 

more and more modifications are made to the RTS, the 

figures differ more from the standard index and the gap 

between the RTS and personal income indices is narrowed. Thus, the All Tax RTS index differs from personal income by an average of 9.7 points, the All Revenue index by 8.9 points, and the Adjusted All Revenue 

index by only 8.5 points. 

CONCLUSION 

We believe that the RTS will continue to play a role of 

major importance in the measurement and analysis of 

state-local fiscal capacity. RTS remains a valuable aid to 

state officials in making tax policy choices because of 

the disaggregated data it uniquely provides. At the federal level also, the RTS has made a contribution bv 

furthering the debate over improving the measurement 

of fiscal capacity. 

ACIR's development and refinement of the RTS over 

more than 20 years, along with criticisms of both the per 

capita income and the RTS measures, have changed the 

terms of debate. No longer is the simple per capita 

income measure the only approach to measuring fiscal 

capacity. Instead, the possibilities include the RTS, revised and strengthened in ways such as we have illustrated in this report, more sophisticated income measures which explicitly adjust for tax exporting, and 

measures disaggregating personal income, such as an 

index of total taxable resource^.^ 

Among these approaches, however, RTS has several 

advantages. For one, it is clearly superior to the current 

per capita income measure in its ability to reflect 

quickly significant economic changes such as changes 

in oil prices and production. For another, development 

of a export-adjusted income measure suffers from the 

extremely difficult conceptual problems of explicitly 

measuring and correcting for tax exportation. Finally, 

RTS has shown a great deal of adaptability in its ability 

to accommodate a number of issues and criticisms. RTS 

methods stake out the middle ground in measuring 

fiscal capacity between a severely limited measure, per 

capita income, and highly sophisticated, theoretically 

elegant models which are ciifficult both to make operational and to explain to policymakers. 

NOTES 

ACIR, Measures of State and Local Fiscal Capacity and Tax 

Effort, M-16, Washington, DC, 1962. See also ACIR, Measuring the Fiscal Capacity and Effort of State and Local Areas, 

M-58,1971; ACIR, Tax Capacity of the Fifty States: Methodology and Estimates, M-134, March 1982; ACIR, Tax Capacity 

of the Fifty States, Supplement: 1980 Estimates, June 1982: 

ACIR, 1981 Tax Capacity of the Fifty States, A-93, September 

1983; and ACIR, 1982 Tax Capacity ofthe Fifty States, M-142, 

May 1985. 

ACIR's approach to measuring tax capacity has made a strong 

impression in Canada and led to the Canadian Parliament's 

decision to distribute federal equalization aid to the provinces using the Representative Tax System method for estimating provincial tax wealth. 

Conversely, the RTS also accounts for at least some types of 

- - - - - 

tax importation, or the payment of taxes by residents of one 

state to the government of another state. For example, if a 

Michigan resident vacations in Hawaii, Michigan's fiscal capacity is reduced to the extent Hawaii is able to tax the 

consumption goods or services that would otherwise have 

been purchased in Michigan. However, the issue of tax importation has not received as much attention as that of tax 

exportation, probably because it is even more difficult to 

measure and because its effects are more evenly distributed 

among the states. 

'See his "Improved Measures of Fiscal Capacity," a draft prepared for the U.S. Department of the Treasury. February 1985. 

ACIR, "Federal Income Tax Deductibility of State and Local 

Taxes," (forthcoming), updated using 1984 Budget of the U.S. 

Government, Special Analysis G. 

The new tax capacity index, called "Total Taxable Resources," is presented in U.S. Department of the Treasury, 

Federal-State-Local Fiscal Relations, Ch. 8, forthcoming. 

Appendix A 

STATE-BY-STATE GRAPHS 

This appendix contains a set of graphs that present 

the RTS data on a state-by-state basis. The graphs show 

RTS data both over time and by selected tax bases for 

1983. The graphs make it easy to visualize a state's fiscal 

choices and also facilitate interstate comparisons. 

The top graph on each page records the total tax 

capacity and tax effort indices for each state for oddnumbered-years from 1975 to 1983. These graphs show 

trends in each state's capacity and effort indices and 

illustrate the relative positions of the tax capacity and 

tax effort indices at various points over the 1975-83 

period. 

Whereas the top graph on each page shows the RTS 

data over time, the bottom graph represents a snapshot 

in time. The bottom graph presents detailed 1983 data 

for each state for seven selected tax bases. State tax 

capacity per capita, state tax revenue per capita, and the 

U.S. average tax capacity per capita are shown for each 

of the following bases: 

general sales tax, 

total selective sales taxes, 

total license taxes, 

personal income tax, 

corporate net income tax, 

total property taxes, and 

total severance taxes. 

The bottom graph shows directly the degree to which 

a state utilizes a particular tax source relative to other 

states. If the first bar (capacity) exceeds the second bar 

(revenue) for a particular tax, then the state is raising 

less revenue from that tax source than the average state 

would raise given the same tax base. Conversely, if the 

revenue bar exceeds the capacity bar, the state is taxing 

that base more heavily than average. 

The lower graphs also can be interpreted to show how 

a state's tax mix compares to that of other states. For 

example, if a state's revenue exceeds its capacity for the 

general sales tax and the income tax but falls below its 

capacity for the property tax, then that state has a tax 

mix that emphasizes the sales and income taxes and 

de-emphasizes the property tax. The extent to which 

revenue exceeds capacity (or vice versa) provides a 

measure of the burden a state places on one tax in 

relation to another and in relation to other states. 
Alabama 

1983 Tax Capacity = 75 1983 Tax Effort = 87 

Total Tax Capacity and Tax Effort, 1975-83 

140 

120- 

100- 

80 - 

- - 

60 

1975 1477 1b79 lbl I! 

D Tax Capacity Tax Effort 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

General 

Sales 

Selective 

Sales 

Licenses Personal 

Income 

Corporate Property 

Net Income 

Severance 

Tax Capacity Tax Revenue 0 US. Average Capacity 
Alaska 

1983 Tax Capacity = 272 1983 Tax Effort = 166 

Total Tax Capacity and Tax Effort, 1975-83 

340 I 

t 

13 

Tax Capacity Tax Effort 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

General 

Sales 

Selective 

Sales 

Licenses Personal 

Income 

Corporate 

Net Income 

Property Severance 

Tax Capacity Tax Revenue 0 US. Average Capacity 
Arizona - - - - - - - - - 

1983 Tax Capacity = 97 1983 Tax Effort = 91 

Total Tax Capacity and Tax Effort, 1975-83 

140/ 

Tax Capacity 0 Tax Effort 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

- 

General Selective Licenses Personal Corporate Property Severance Sales Sales Income Net Income 

Tax Capacity Tax Revenue 0 U.S. Average Capacity 
Arkansas 

1983 Tax Capacity = 78 1983 Tax Effort = 

Total Tax Capacity and Tax Effort, 1975-83 

l4O------- 

Tax Capacity 0 Tax Effort 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

1 - 

I Tax Capacity I Tax Revenue U U.S. Average Capacity 
California 

1983 Tax Capacity = 11 9 1983 Tax Effort = 92 

Total Tax Capacity and Tax Effort, 1975-83 

Tax Capacity Tax l3'01-t 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

General 

Sales 

Selective 

Sales 

Licenses Personal 

Income 

Corporate Property 

Net Income 

Severance 

Tax Capacity Tax Revenue 0 U.S. Average Capacity 
Colorado 

1983 Tax Capacity = 122 1983 Tax Effort = 

Total Tax Capacity and Tax Effort, 1975-83 

Tax Capacity Tax Effort 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

General 

Sales 

Selective 

Sales 

Licenses Personal 

Income Corporate 

Net Income 

Property Severance 

Tax Capacity I Tax Revenue 0 US. Average Capacity 
Connecticut 

1983 Tax Capacity = 124 1983 Tax Effort = 96 

Tax Capacity Tax Effort 

Total Tax Capacity and Tax Effort, 1975-83 

I983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

140 

120- 

1001 

80- 

60 

General Selective Licenses Personal Corporate Property Severance 

Sales Sales Income Net Income 

I 

I 

I1 I 

/ 

a - - 

1975 1477 1479 iLi 1983 

III Tax Capacity Tax Revenue I U.S. Average Capacity 
Delaware 

1983 Tax Capacity = 1 18 1 983 Tax Effort = 82 

Total Tax Capacity and Tax Effort, 1975-83 

140 

I 

120- I 

100- 

4 

80- 

60 

1975 1877 1679 1481 1983 

fax Capacity Tax Effort 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

General Selective Licenses Personal Corporate Property Severance 

Sales Sales Income Net Income 

Tax Capacity Tax Revenue 0 U.S. Average Capacity 
Washington, DC 

1983 Tax Capacity = 1 17 1983 Tax Effort = 146 

Total Tax Capcity and Tax Effort, 1975-83 

iBO 

Gener 

Tax Capacity Tax Effort 

1983Tax Capacity and Tax Revenue 

Selected Tax Bases 

al Selective Licenses Personal Corporate Property Severance 

Sales Sales Income Net Income 

.I Tax Capacity Tax Revenue 0 U. S. Average Capacity 
Florida 

1983 Tax Capacity = 103 1983 Tax Effort = 75 

Total Tax Capacity and Tax Effort, 1975-83 

80- 

t I 

60 

1975 1477 1479 ibi 

rn Tax Capacity Tax Effort 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

General Selective Licenses Personal Corporate Property Severance 

Sales Sales Income Net Income 

Tax Capacity D Tax Revenue 0 US. Average Capacity 
Georgia 

1983 Tax Capacity = 87 1983 Tax Effort = 93 

Total Tax Capacity and Tax Effort, 1975-83 

i4~

m Tax Capacity Tax Effort 

I983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

Sales Sales Income Net Income 

I Tax Capacity Tax Revenue 0 US. Average Capacity 
Hawaii 

1983 Tax Capacity = 1 14 1983 Tax Effort = 108 

Total Tax Capacity and Tax Effort, 1975-83 

140 

1207 

t 

100- 

80- 

60 

1975 ib77 1879 1~1 193 

Tax Capacity Tax Effort 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

- General Selective Licenses Personal 

Sales Sales Income 

Corporate Property Severance 

Net Income 

Tax Capacity Tax Revenue 0 US. Average Capacity 
Idaho 

- - - - - - - - - - - --- - - - - - - - - -- - - - - - 

1983 Tax Capacity = 83 1983 Tax Effort = 87 

Total Tax Capacity and Tax Effort, 1975-83 

140 

120- 

100- 

II - 

w 

80 - 

60 

1975 1477 1479 1hl 19 

m Tax Capacity 0 Tax Effort 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

-L 

General Selective Licenses Personal Corporate Property Severance 

Sales Sales Income Net Income 

Tax Capacity Tax Revenue 0 US. Average Capacity 
Illinois 

1983 Tax Capacity = 98 1983 Tax Effort = 107 

Total Tax Capacity and Tax Effort, 1975-83 

Tax Capacity 0 Tax Effort 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

General Selective Licenses Personal Corporate Property Severance 

Sales Sales Income Net Income 

Tax Capacity Tax Revenue 0 US. Average Capacity 
.A ,a,,,city and Tax Revenue 

Selected Tax Bases 

Personal 

lncome 

Corporate Property 

Net lncome 

Severance 

Tax Capacity I Tax Revenue 0 U.S. Average Capacity 
1983 Tax Capacity = 91 1983 Tax Effort = 109 

Tax Capacity Tax Effort 

Total Tax Capacity and Tax Effort, 1975-83 

140 

120 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

Wo 0 

100- 

80- 

60 

" General Selective 

Sales Sales 

Licenses personal 

Income 

1975 is77 ib79 ibei 1903 

- 

(c-2. 

Cornorate 

- 

Severance 

I 

. - Net income 

II Tax Capacity Tax Revenue U US, Average Capacity 
Kansas 

1983 Tax Capacity = 102 1983 Tax Eff oft = 92 

Total Tax Capacity and Tax Eft ort, 1975-83 

120- 

100- 

- I 

60- 

60 

1475 1477 1479 lbl 1983 

rn Tax Capacity Tax Effort 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

Sales Sales Income Net Income 

Tax Capacity I Tax Revenue 0 US. Average Capacity 
Kentucky - 

1983 Tax Capacity = 79 1983 Tax Effort = 91 

Total Tax Capacity and Tax Effort, 1975-83 

60 

1975 1477 1479 ibi 198: 

Tax Capacity Tax Effort 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

Tax Capacity I Tax Revenue O U.S. Average Capacity 
Louisiana 

1983 Tax Capacity = 107 1983 Tax Effort = 81 

Total Tax Capacity and Tax Effort, 1975-83 

Tax Capacity Tax Effort 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

General 

Sales 

Selective 

Sales 

Licenses Personal 

Income 

Corporate Property 

Net Income 

Severance 

I Tax Capacity I Tax Revenue 0 US. Average Capacity 
1983 Tax Capacity = 90 1983 Tax Effort = 100 

Total Tax Capacity and Tax Effort, 1975-83 

140 1 

Tax Capacity Tax Effort 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

General 

Sales 

Selective 

Sales 

Licenses Personal 

Income Corporate 

Net Income 

Severance 

Tax Capacity I Tax Revenue 0 US. Average Capacity 
Maryland - 

1983 Tax Capacity = 99 1983 Tax Effort = 107 

Total Tax Capacity and Tax Effort, 1975-83 

Tax Capacity a Tax Effort 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

General Selective 

Sales Sales 

Tax Capacity 

Licenses Personal 

Income 

D Tax Revenue 

Corporate Property Severance 

Net lncome 

0 US. Average Capacity 
Massachusetts 

1983 Tax Capacity = 107 1983 Tax Effort = 11 2 

Total Tax Capacity and Tax Effort, 1975-83 

180 

160- 

Tax Capacity Tax Effort 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

General 

Sales 

Selective 

Sales 

Licenses Personal 

Income 

Corporate 

Net Income 

Property Severance 

Tax Capacity Tax Revenue 0 U.S. Average Capacity 
Michigan 

1983 Tax Capacity = 90 1983 Tax Effort = 128 

Total Tax Capacity and Tax Effort, 1975-83 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

" General 

Sales 

Selective 

Sales 

- 

Licenses Personal 

Income 

Corporate Proper 

Net Income 

' Severance 

I Tax Capacity I Tax Revenue 0 US. Average Capacity 
Minnesota 

1983 Tax Capacity = 97 1983 Tax Effort = 124 

Total Tax Capacity and Tax Effort, 1975-83 

8 Tax Capacity 0 Tax Effort 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

General 

Sales 

Selective 

Sales 

- -- 

Licenses Corporate 

Net Income Property 

- 

Severance 

D Tax Capacity Tax Revenue 0 US. Average Capacity 
Mississippi 

1983 Tax Capacity = 68 1983 Tax Effort = 95 

Total Tax Capacity and Tax Effort, 1975-83 

Tax Capacity Tax Effort 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

Sales Sales 

Tax Capacity Tax Revenue 0 US. Average Capacity 
Missouri 

1983 Tax Capacity = 89 1983 Tax Effort = 87 

Total Tax Capacity and Tax Effort, 1975-83 

l4OI 

Tax Capacity 0 Tax Effort 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

Tax Capacity Tax Revenue 0 U. S. Average Capacity 
Montana 

1983 Tax Capacity = 105 1983 Tax Effort = 94 

Total Tax Capacity and Tax Effort, 1975-83 

140/ 

60 

1975 1477 1479 ibei i! 

B Tax Capacity 0 Tax Effort 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

General 

Sales 

Selective 

Sales 

Licenses Personal 

lncome 

Corporate Property 

Net Income 

Severance 

Tax Capacity Tax Revenue 0 US. Average Capacity 
Nebraska 

1983 Tax Capacity = 101 1983 Tax Effort = 9

Total Tax Capacity and Tax Effort, 1975-83 

140 

Tax Capacity Tax Effort 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

" General 

Sales 

Selective 

Sales 

Licenses Personal 

Income Corporate 

Net Income 

Severance 

I Tax Capacity = Tax Revenue 0 U. S. Average Capacity 
Nevada 

1983 Tax Capacity = 147 1983 Tax Effort = 64 

Total Tax Capacity and Tax Effort, 1975-83 

I80 

- - - 

60 

- 

1975 1477 1479 1481 19 

Tax Capacity 0 Tax Effort 

General 

Sales 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

Selective 

Sales 

Licenses Personal 

Income 

Corporate Property 

Net Income 

Severance 

Tax Capacity Tax Revenue 0 US. Average Capacity 
New Hampshire 

1983 Tax Capacity = 108 1983 Tax Effort = 69 

Total Tax Capacity and Tax Effort, 1975-83 

140 

120- 

100- 

Tax Capacity Tax Effort 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

Tax Capacity Tax Revenue 0 US. Average Capacity 
New Jersey 

1983 Tax Capacity = 11 2 1983 Tax Effort = 109 

Total Tax Capacity and Tax Effort, 1975-83 

140 

120- 

I 

100- 

80- 

60 

1975 1477 1479 i4ei 19 

Tax Capacity Tax Effort 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

Tax Capacity Tax Revenue 0 US. Average Capacity 
New Mexico 

1983 Tax Capacity = 108 1983 Tax Effort = 7

Total Tax Capacity and Tax Effort, 1975-83 

f 

80 - 

60 

1975 1477 1479 lhi 19t 

Tax Capacity Tax Effort 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

ljoo J 

Sales 

Selective 

Sales 

Tax Capacity 

Licenses Personal corporate 

Income Net Income 

Tax Revenue 

Property Severance 

0 U. S. Average Capacity 
New York 

1983 Tax Capacity = 95 1983 Tax Effort = 163 

Total Tax Capacity and Tax Effort, 1975-83 

180 ( 

Tax Capacity 0 Tax Effort 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

Sales 

Selective 

Sales 

Licenses Personal 

Income 

Corporate Property 

Net Income 

Severance 

- Tax Capacity I Tax Revenue 0 U.S. Average Capacity 
North Carolina 

1983 Tax Capacity = 87 1983 Tax Effort = 81 

Total Tax Capacity and Tax Effort, 1975-83 

- 

- 

- 

1 - 

I - 

80- 

60 

1975 ib77 1979 i4ei ig 

Tax Capacity Tax Effort 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

General 

Sales 

Selective 

Sales 

Licenses personalIncome 

Corporate . a 

Net income 

1 Severance 

Tax Capacity Tax Revenue 0 U.S. Average Capacity 
North Dakota 

1983 Tax Capacity = 11 1 1983 Tax Effort = 81 

Total Tax Capacity and Tax Effort, 1975-83 

I 

175 1477 1479 ibi 1983 

8 Tax Capacity Tax Effort 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

Tax Capacity I Tax Revenue 0 US. Average Capacity 
Ohio 

1983 Tax Capacity = 89 1983 Tax Effort = 103 

Total Tax Capacity and Tax Effort, 1975-83 

Tax Capacity a Tax Effort 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

I Tax Capacity I Tax Revenue 0 US. Average Capacity 
Oklahoma 

1983 Tax Capacity = 11 5 1983 Tax Effort = 80 

Total Tax Capacity and Tax Effort, 1975-83 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

" General 

Sales 

Selective 

Sales 

Licenses Personal 

Income 

Corporate Property 

Net Income 

Severance 

I Tax Capacity I Tax Revenue 0 U.S. Average Capacity 
Oregon -- - 

1983 Tax Capacity = 95 1983 Tax Effort = 1 03 

Total Tax Capacity and Tax Effort, 1975-83 

75 1477 1479 ibai 191 

Tax Capacity 0 Tax Effort 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

General 

Sales 

Selective 

Sales 

Licenses Personal 

Income 

Corporate Property 

Net Income 

Severance 

Tax Capacity Tax Revenue 0 U. S. Average Capacity 
Pennsylvania 

1983 Tax Capacity = 88 1983 Tax Effort = 105 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

600 1 

Total Tax Capacity and Tax Effort, 1975-83 

D Tax Capacity Tax Revenue 0 U.S. Average Capacity 

1 

I 

140 

120- 

1007, 

4 

80- 

60 

1975 1477 1b79 ibi 1983 

- 4 

P - 

I 
Rhode Island 

1983 Tax Capacity = 86 1983 Tax Effort = 126 

Total Tax Capacity and Tax Effort, 1975-83 

1401 

Tax Capacity Tax Effort 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

Tax Capacity Tax Revenue 0 US. Average Capacity 
South Carolina 

1983 Tax Capacity = 76 1983 Tax Effort = 96 

Total Tax Capacity and Tax Effort, 1975-83 

140 

120- 

601 

ib75 1477 1479 ibei 19 

Tax Capacity Tax Effort 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

Tax Capacity Tax Revenue 0 US. Average Capacity 
1983 Tax Capacity = 87 1983 Tax Effort = 85 

Total Tax Capacity and Tax Effort, 1975-83 

8 Tax Capacity 0 Tax Effort 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

General Selective Licenses Personal Corporate Property Severance 

Sales Sales Income Net Income 

Tax Capacity Tax Revenue 0 US, Average Capacity 
Tennessee 

1983 Tax Capacity = 80 1983 Tax Effort = 82 

Total Tax Capacity and Tax Effort, 1975-83 

140 

120- 

100- 

I 

801 

Tax Capacity 0 Tax Effort 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

Sales Sales Income Net Income 

Tax Capacity Tax Revenue 0 U.S. Average Capacity 
Texas 

1983 Tax Capacity = 124 1983 Tax Effort = 67 

Total Tax Capacity and Tax Effort, 1975-83 

140 

120 

100 

80 

- 

60 

1475 1b7 1679 lbl 19E 

Tax Capacity Tax Effort 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

Sales 

Selective 

Sales 

Licenses Personal 

Income Corporate 

Net Income 

- 

Property 

- 

Severance 

II Tax Capacity Tax Revenue U U. S. Average Capacity 
Utah 

1983 Tax Capacity = 82 1983 Tax Effort = 98 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

Total Tax Capacity and Tax Effort, 1975-83 

General Selective Licenses Personal Corporate Property Severance 

Sales Sales Income Net Income 

140 

s 120- 

z 

I1 

4 

Y 

3 

100- 

n 

E 

s 

z 4 x 

8 I 

0 

e 

- 80- 

60 

Tax Capacity Tax Revenue 0 US. Average Capacity 

- - 

I 

k - - 

1975 1477 1479 1481 19 

rn Tax Capacity Tax Effort 
Vermont - 

1983 Tax Capacity = 94 1983 Tax Effort = 95 

Total Tax Capacity and Tax Effort, 1975-83 

Tax Capacity Tax Effort 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

General Selective 

Sales Sales 

Tax Capacity 

Licenses persons Corporate 

Income 

Tax Revenue 

. . I Severance 

Net income 

0 US. Average Capacity 
1983 Tax Capacity = 96 1983 Tax Effort = 89 

Total Tax Capacity and Tax Effort, 1975-83 

rn Tax Capacity Tax Effort 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

General Selective Licenses Personal Corporate Property Severance Sales Sales Income Net Income 

D Tax Capacity Tax Revenue 0 US. Average Capacity 
Washington 

1983 Tax Capacity = 101 1983 Tax Effort = 104 

Total Tax Capacity and Tax Effort, 1975-83 

140 

60 

1975 1477 1479 1bl 1% 

Tax Capacity Tax Effort 

General 

Sales 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

Selective 

Sales 

Licenses Personal 

Income Corporate 

Net Income 

Severance 

D Tax Capacity Tax Revenue 0 US. Average Capacity 
West Virginia 

1983 Tax Capacity = 87 1983 Tax Effort = 88 

Total Tax Capacity and Tax Effort, 1975-83 

rn Tax Capacity 8 Tax Effort 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

Genera 

Sales 

Selective Licenses Personal Corporate 

Sales Income Net income 

Property Severance 

Tax Capacity Tax Revenue 0 US. Average Capacity 
Wisconsin 

1983 Tax Capacity = 87 1 983 Tax Effort = 137 

Total Tax Capacity and Tax Effort, 1975-83 

75 1477 1479 ibi 19 

Tax Capacity Tax Effort 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

General 

Sales 

Selective 

Sales 

Personal 

Income Corporate 

Net Income Property Severance 

Tax Capacity Tax Revenue D US. Average Capacity 
Wyoming 

1983 Tax Capacity = 182 1983 Tax Effort = 113 

Total Tax Capacity and Tax Effort, 1975-83 

General 

Sales 

rn Tax Capacity Tax Effort 

1983 Tax Capacity and Tax Revenue 

Selected Tax Bases 

Selective Licenses 

Sales 

Personal 

Income 

Corporate Property 

Net Income 

Severance 

- Tax Capacity Tax Revenue 0 US. Average Capacity 
Appendix B 

In this appendix, the 1983 Representative Tax System 

(RTS) tables are organized tax by tax. For each tax, states 

are compared in terms of: 

tax base, 

capacity per capita, 

tax capacity index, 

tax capacity, 

tax revenue, 

revenue per capita, and 

tax effort index, 

The tax base (or tax base proxy) is a measure of the 

resources available for taxation under a particular tax. A 

standard definition of tax base was used across all 

states. 

Capacity per capita is the population divided into the 

revenue that could be collected (i.e., capacity) from the 

tax base when the representative (i.e., average) tax rate 

is applied. 

The tax capacity index compares each state's capacity per capita to the average for all states. An index of 

100 is the average. 

Tax capacity is the yield for each state when the 

representative tax rate is applied to the standardized 

measure of tax base. 

Tax revenue is the amount each state actually colTAX-BY-TAX TABLES 

lected for that type of tax. 

Revenue per capita is tax revenue divided by population. 

The tax effort index is constructed first by dividing 

actual revenues by tax capacity in each state, and then 

multiplying by 100. An index above 100 means that the 

state, compared to all others, is above average in the 

extent to which it exploits the particular tax base. 

These tables show, among other things, which states 

have the most (or least) capacity to use any particular 

tax. For example, those with oil and gas production and 

those without are evident. One can also see, for example, which states have the most per capita income tax or 

sales tax capacity. 

The tax effort data show which states lean the most on 

any particular tax. Common practice is to compare statutory state tax rates (sales tax rates, for example), rather 

than effective rates. However, such comparisons may 

mislead because states have chosen different legal definitions of tax base-sometimes creating a broad base 

that allows for low statutory rates, but sometimes allowing many exemptions that necessitate use of a higher 

rate. Because the tax effort data reported here are based 

on standardized definitions of tax base, no such distortion exists. The RTS representative rate listed for individual tax bases is nationwide tax revenue divided by 

standard tax base. 
TABLE 5-1 

ALL TAXES 

Capacity Tax Revenue Tax 

Tax Per Capacity Tax Tax Per Effort 

State Base* Capita Index Capacity Revenue Capita Index 

Alabama 879.52 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Washington, DC 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey 

New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia Wisconsin 

Wyoming 

5,566:579 

5,305,601 

- 1,765,134 

6,685,192 

U.S. TOTAL 1,175.95 100.0 $275,148,881 1.250.21 2 

NOTE: All per capita amounts are in dollars; total amounts are in thousands of dollars. 

*No combined tax base can be reported; see tables for individual taxes. 

SOURCE: AClR staff estimates. 
Table 8-2 

GENERAL SALES 

State 

Alabama 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Washington, DC 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey 

New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia Wisconsin 

Wyoming 

Capacity Tax Revenue Tax 

Tax Per Ca~acitv Tax Tax Per Effort 

Base* Capita Index - Capacity Revenue Capita Index 

- 

U.S. TOTAL $977,290,168 $276.76 100.0 $64,755,780 $64,755,780 $276.76 100.0 

NOTE: All per capita amounts are in dollars; total amounts are in thousands of dollars. 

Representative Rate = 6.6%. 

*Tax base is retail sales in thousands of dollars. 

SOURCE: AClR staff estimates. 
Table 6-3 

TOTAL SELECTIVE SALES TAXES 

Capacity Tax Revenue Tax 

Tax Per Capacity Tax Tax Per Effort 

State Base* Capita Index Capacity Revenue Capita Index 

Alabama $508,881 757,538 $1 91.35 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Washington, DC 

Florida 

Georgia 

Hawa~i 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missourl 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey 

New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia Wisconsm 

Wyoming 

U.S. TOTAL $1 37.62 100.0 $32,201,480 $32,201,480 $1 37.62 100.0 

NOTE: All per capita amounts are in dollars; total amounts are in thousands of dollars. 

*No combined tax base can be reported; see tables for particular selective sales taxes. 

SOURCE: AClR staff estimates. 
Table 8-4 

SELECTIVE SALES-PARIMUTUEL TAXES 

Capacity Tax Revenue Tax 

Tax Per Capacity Tax Per Effort 

State Base* Capita Index 

Alabama 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Washington, DC 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey 

New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia 

Wisconsm 

Wyoming 

Tax 

Capacity 

$7,970 

0 

9,949 

14,798 

103,279 

10,572 

26,149 

3,209 

0 

87,206 

0 

0 

535 

48,102 

0 

0 

0 

15,777 

27,347 

1,541 

20,906 

27,847 

17,666 

0 

0 

0 

570 

9,853 

335 

4,527 

47,661 

6,335 

154,919 

0 

0 

19,133 

0 

4,933 

26,079 

7,220 

0 

1,762 

0 

0 

0 

71 2 

0 

10,429 

11,856 

0 

9 1 

Revenue Capita lndex 

- -- 

U.S. TOTAL $1 4,669,090 $3.1 2 100.0 $729,269 $729,269 $3.1 2 100.0 

NOTE: All per capita amounts are in dollars; total amounts are in thousands of dollars. 

Representative Rate = 4.97%. 

*Tax base is parimutuel handle in thousands of dollars. 

SOURCE: AClR staff estimates. 
Table B-5 

SELECTIVE SALES-MOTOR FUEL SALES - - TAXES -- -- - 

Capacity Tax Revenue Tax 

Tax Per Capacity Tax Tax Per 

State Base* Capita Index Capacity Revenue Capita 

Alabama 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Washington, DC 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey 

New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia Wisconsm 

Wyoming 

Effort 

lndex 

133.4 

1 27.7 

102.7 

104.9 

82.4 

92.2 

121 .o 

117.1 

131.1 

88.3 

111.1 

175.6 

162.2 

85.8 

112.3 

121.8 

85.3 

105.4 

81.6 

101.1 

120.6 

110.1 

122.5 

125.8 

107.7 

72.6 

95.3 

135.4 

150.6 

152.2 

84.7 

1 14.7 

81.8 

123.4 

81.5 

119.6 

63.2 

76.8 

119.5 

125.6 

129.8 

126.3 

111.2 

54.5 

116.3 

1 14.4 

119.0 

121.5 

127.0 

134.2 

89.7 

U.S. TOTAL 1 19,809,212 $46.77 100.0 $1 0,942,477 $1 0,942,477 $46.77 100.0 

NOTE: All per capita amounts are in dollars; total amounts are in thousands of dollars. 

Representative Rate = $0.09 per gallon. 

'Tax base is motor fuel sales in thousands of gallons. 

SOURCE: AClR staff estimates. 
Table 6-6 

SELECTIVE SALES-INSURANCE SALES TAXES 

Capacity Tax Revenue Tax 

Tax Per Capacity Tax Tax Per Effort 

State Base* Capita Index Capacity Revenue Capita Index 

Alabama 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Washington, DC 

Florida 

Georgia 

Hawa~i 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia Wisconsm 

Wyoming - 

U.S. TOTAL $223,442 $1 6.54 

NOTE: All per capita amounts are in dollars; total amounts are in thousands of dollars. 

Representative Rate = 1.73%. 

*Tax base is ross insurance premiums in millions of dollars. 

SOURCE: AClR staf ? estimates. 
Table 8-7 

SELECTIVE SALES-TOBACCO SALES TAXES 

Capacity Tax Revenue Tax 

Tax Per Capacity Tax Tax Per Effort 

State Base* Capita Index Capacity Revenue Ca~ita Index 

Alabama 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Washington, DC 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey 

New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia Wisconsm 

Wyoming 

U.S. TOTAL 29,243.4 $1 7.87 100.0 $4,182,084 $4,182,084 $1 7.87 100.0 

NOTE: All per capita amounts are in dollars; total amounts are in thousands of dollars. 

Representative Rate = $0.1 4 per pack. 

*Tax base is cigarette sales in millions of packs. 

SOURCE: AClR staff estimates. 
Table 6-8 

SELECTIVE SALES-AMUSEMENT SALES TAXES - -- 

Capacity Tax Revenue Tax 

Tax Per Capacity Tax Tax Per Effort 

State Base* Capita Index Capacity Revenue Capita Index 

Alabama 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Washington, DC 

Florida 

OeorIia Hawa i

Idaho 

llllnois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

M'ssissippi Missour 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Vir inia 

Wiscons 9 n 

Wyoming - - 

U.S. TOTAL 46,119,941 $2.01 100.0 $469,843 $469,843 $2.01 100.0 

NOTE: All per capita amounts are in dollars; total amounts are in thousands of dollars. 

Re~resentative Rate = 1.02%. 

 a ax base is amusement sales in thousands of dollars. 

SOURCE: AClR staff estimates. 
TABLE 8-9 

SELECTIVE SALES-PUBLIC UTILITY SALES TAXES - - 

Capacity Tax Revenue Tax 

Tax Per Capacitv Tax Tax Per 

State Base* Capita lridex - Capacity Revenue Capita 

Alabama $55.63 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Washington, DC 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey 

New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia 

Wisconsin 

Effort 

Index 

145.7 

13.2 

60.6 

43.6 

62.9 

35.9 

176.2 

85.2 

180.2 

1 76.1 

30.0 

313.5 

21.5 

205.9 

0.1 

7.7 

39.3 

39.1 

40.1 

78.6 

95.6 

0.0 

17.0 

102.3 

17.5 

131.3 

25.6 

21.2 

58.6 

4.9 

227.3 

40.6 

181.6 

165.1 

26.6 

147.7 

38.4 

50.4 

120.4 

152.3 

32.3 

3.5 

23.6 

74.8 

51 .O 

86.8 

1 60.5 

207.5 

29.0 

69.3 

21.1 

U.S. TOTAL $279,318,179 $38.59 100.0 $9,029,767 $9,029,767 $38.59 100.0 

NOTE: All per capita amounts are in dollars; total amounts are in thousands of dollars. 

Representative Rate = 3.23%. 

*Tax base is public utility sales in thousands of dollars. 

SOURCE: AClR staff estimates. 
Table B- 10 

SELECTIVE SALES-ALCOHOLIC BEVERAGES, TOTAL 

Capacity Tax Revenue Tax 

Tax Per Capacity Tax Tax Per Effort 

State Base* Capita Index - 

Alabama 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Washington, DC 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia 

Wisconsin 

Wyoming 

Capacity Revenue Capita Index 

$35,726 

US. TOTAL $1 2.73 100.0 $2,978,016 $2,978,016 $1 2.73 100.0 

NOTE: All per capita amounts are in dollars; total amounts are in thousands of dollars. 

*No combined tax base can be reported; see tables for distilled spirits, beer, and wine. 

SOURCE: AClR staff estimates. 
Table B- 1 1 A 

ALCOHOLIC BEVERAGES-DISTILLED SPIRITS - - 

Capacity Tax Revenue Tax 

Tax Per Capacity Tax Tax Per Effort 

State Base* Capita Index Capacity Revenue Capita Index 

Alabama 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Washington, DC 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia Wisconsin 

Wyoming 

U.S. TOTAL 431,128 $6.59 100.0 $1,542,612 $1,542,612 $6.59 100.0 

NOTE: All per capita amounts are in dollars; total amounts are in thousands of dollars. 

Representative Rate = $3.58 per gallon. 

*Tax base is distilled spirits sales in thousands of gallons. 

SOURCE: AClR staff estimates. 
Table 6- 1 I6 

ALCOHOLIC BEVERAGES-BEER 

Capacity Tax 

Tax Per Capacity Tax 

State Base* Capita Index Capacity 

Alabama 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Washington, DC 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire New Jersey 

New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia 

Wisconsin 

Wyoming 

Tax 

Revenue 

$44,391 

3,999 

9,105 

9,700 

52,290 

9,425 

10,075 

1,963 

2,885 

121,591 

66,417 

3,571 

3,259 

36,239 

13,035 

6,424 

13,286 

18,973 

23,418 

11,795 

11,168 

31,760 

37,152 

20,388 

13,306 

9,309 

5,787 

5,289 

4,441 

2,301 

22,931 

6,595 

66,666 

46,873 

2,468 

27,018 

14,775 

4,065 

51,994 

2,922 

38,935 

3,529 

45,815 

104,580 

4,292 

5,403 

30,139 

40,497 

4,141 

16,342 

837 

Revenue Tax 

Per 

Capita 

$1 1.21 

8.35 

3.07 

4.17 

2.08 

3.00 

3.21 

3.24 

4.63 

1 1.38 

11.59 

3.49 

3.30 

3.16 

2.38 

2.21 

5.48 

5.1 1 

5.28 

10.29 

2.59 

5.51 

4.1 0 

4.92 

5.14 

1.87 

7.08 

3.31 

4.98 

2.40 

3.07 

4.71 

3.77 

7.71 

3.63 

2.51 

4.48 

1.53 

4.37 

3.06 

1 1.93 

5.04 

9.78 

6.65 

2.65 

10.29 

5.43 

9.42 

2.1 1 

3.44 

1.63 - 

U.S. TOTAL 182,979,614 $4.89 100.0 $1,143,558 1,143,558 $4.89 

Effort 

lndex 

31 4.4 

142.6 

52.0 

1 15.4 

41.8 

56.3 

79.0 

58.2 

79.9 

197.0 

276.0 

53.2 

68.7 

62.5 

53.0 

44.5 

129.4 

129.9 

108.1 

21 8.3 

51.7 

109.3 

86.1 

101.1 

127.2 

38.3 

11 3.8 

63.0 

68.7 

30.8 

69.7 

80.3 

83.9 

194.6 

69.7 

52.2 

1 20.4 

32.8 

85.1 

56.2 

270.9 

111.9 

249.0 

111.0 

97.7 

188.8 

119.7 

205.8 

52.0 

50.1 

29.2 

NOTE: All per capita amounts are in dollars; total amounts are in thousands of dollars. 

Representative Rate = $6.25 per barrel. 

*Tax base is beer sales in barrels. 

SOURCE: AClR staff estimates. 
Table 6- 12 

ALCOHOLIC BEVERAGES-WINE 

Capacity Tax Revenue Tax 

Tax Per Capacity Tax Tax Per Effort 

State Base* Capita Index Capacity Revenue Capita Index 

Alabama 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Washington, DC 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey ,New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia Wisconsin 

Wyoming 

U.S. TOTAL 51 9,371 $1.25 100.0 $291,846 $291,846 $1.25 100.0 

NOTE: All per capita amounts are in dollars; total amounts are in thousands of dollars. 

Representative Rate = $0.56 per gallon. *Tax base is wine sales in thousands of gallons. 

SOURCE: AClR staff estimates. 
Table 8- 13 

TOTAL LICENSE TAXES 

Capacity Tax Revenue Tax 

Tax Per Capacity Tax Tax Per Effort 

State Base* Capita Index Capacity Revenue Capita Index 

Alabama 103.9 $1 64,214 $1 19,771 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Washington, DC 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia 

Wisconsin 

Wyoming 

U.S. TOTAL $39.93 100.0 $9,343,394 $9,343,394 $39.93 1 00.0 

NOTE: All per capita amounts are in dollars; total amounts are in thousands of dollars. 

*No combined tax base can be reported; see tables for particular licenses. 

SOURCE: AClR staff estimates. 
TABLE B-14 

LICENSE TAXES-MOTOR VEHICLE OPERATOR LICENSES 

Capacity Tax 

Tax Per Capacity Tax 

State Base* Capita Index Capacity 

Alabama 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Washington, DC 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey 

New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia 

Wisconsin 

Wyoming 

Revenue Tax 

Tax Per Effort 

Revenue Capita lndex - 

U.S. TOTAL 154,221,003 2.17 100.0 $2.17 100.0 

NOTE: All Der ca~ita amounts are in dollars; total amounts are in thousands of dollars. 

~epresentative Rate = $3.29 per license. 

*Tax base is number of motor vehicle operator licenses. 

SOURCE: AClR staff estimates. 
Table 8- 15 

LICENSE TAXES-CORPORATION LICENSES 

Capacity Tax Revenue Tax 

Tax Per Capacity Tax Tax 

Per Effort 

State Base* Capita Index Capacity Revenue Capita Index 

Alabama 33,333 $5.00 63.2 $1 9,776 $54,595 $1 3.79 276.1 

Alaska 7,316 9.06 114.6 4,340 1.95 21.5 

934 

. 24.1 70 1,508 ~- 

~rizo~a 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Washington, DC 

Florida 

Georgia 

Hawali 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

miss our^ 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

~ermont 

Virginia 

Washington 

West Virginia Wisconsm 

. - 

34 $7.91 100.0 $1,849,958 $1,849,958 $7.91 

. -J CE: All per capita amounts are in dollars; total amounts are in thousands of dollars. 

Representative Rate = $593.27 per corporation. 

'Tax base is the number of corporations that filed federal tax returns 

SOURCE: ACIR staff estimates. 
Table B- 16 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Washington, DC 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

-0uisiana 

Waine 

Aar y land 

Aassachusetts 

lichigan 

linnesota 

lississippi 

lissouri 

ontana 

sbraska 

wada 

!w Hampshire 

rw Jersey 

w -Mexico 

w York 

rth Carolina 

rth Dakota 

io 

ahoma 

lgon 

tnsylvania 

~de Island 

th Carolina 

th Dakota 

lessee 

S 

LICENSE TAXES-HUNTING AND FISHING LICENSES 

Capacity Tax Revenue Tax 

Tax Per Capacity Tax State Tax Base* Capita Per Effort Index Capacity Revenue Capita Index 

Alabama 

87.0 $7,863 $9,123 

~ont 

nia 

lington 

Virginia 

onsin 

ning - ~ . - 

- 2 - . ., . - 

rOTAL 66,694,948 $2.28 1 00.0 $534,242 $534,242 $2.28 100.0 

i: All per capita amounts are in dollars; total amounts are in thousands of dollars. 

Representative Rate = $8.01 per license. 

*Tax base is the number of hunting and fishing licenses. 

3CE: AClR staff estimates. 
Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire New Jersey 

New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 
Table 5- 18 

LICENSE TAXES-MOTOR VEHICLE REGISTRATIONS, TOTAL 

Capacity Tax Revenue Tax 

Tax Per Capacity Tax Tax Per Effort 

State Base* Capita Index Capacity Revenue Capita Index 

120.2 $1 26,624 $45,974 $1 1.61 36.3 Alabama 39.92 Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Washington, DC 

Florida 

Geor!iia Hawa l 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

M!ssissippi 

M~ssour 

Montana 

Nebraska 

Nevada 

New Hampshire New Jersey New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia Wisconstn 

Wyomina - 

U.S. TOTAL $26.61 100.0 $6,227,018 $6,227,018 $26.61 1 00.0 

NOTE: All per capita amounts are in dollars; total amounts are in thousands of - . dollars. - - . . -. - . 

*No combined tax base can be reported; see tables for automobile and truck registrations. 

SOURCE: AClR staff estimates. 
Table B- 19A 

MOTOR VEHICLE REGISTRATIONS-AUTOMOBILE 

Capacity Tax Revenue Tax 

Tax Per Capacity Tax Tax Per Effort 

State Base* Capita Index Capacity Revenue Capita Index 

Alabama 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Washington, DC 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia Wisconsin 

Wyoming 

U.S. TOTAL 125,773,307 $1 6.1 8 100.0 $3,786,027 $3,786,027 $1 6.1 8 100.0 

NOTE: All per capita amounts are in dollars; total amounts are in thousands of dollars. 

Representative Rate = $30.10 per registration. 

*Tax base is number of automobile registrations. 

SOURCE: AClR staff estimates. 
Table 5- 195 

MOTOR VEHICLE REGISTRATIONS-TRUCK 

Capacity Tax Revenue Tax 

Tax Per Capacity Tax Tax Per Effort 

State Base* Capita Index Capacity Revenue Capita Index 

Alabama 842,135 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Washington, DC 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey 

New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia 

Wisconsin 

Wyoming 

U.S. TOTAL 35,086,197 

NOTE: All per capita amounts are in dollars; total amounts are in thousands of dollars. 

Representative Rate = $69.57 per registration. 

*Tax base is number of truck registrations. 

SOURCE: AClR staff estimates. 
Table 8-20 

PERSONAL INCOME TAXES 

Capacity Tax 

Tax Per Capacity Tax Tax 

State Base* Capita Index Capacity Revenue 

- - 

Revenue Tax 

Per Effort 

Alabama 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Washington, DC 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey 

New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia 

Wisconsin 

Wyoming 

Capita lndex 

$150.50 93.3 

- 

U.S. TOTAL $275,244,807 $235.61 100.0 $55,128,926 $55,1 28,926 $235.61 100.0 

NOTE: All per capita amounts are in dollars; total amounts are in thousands of dollars. 

Re~resentative Rate = 20.03%. - - . - - . - . a ax base is federal-income tax liability in thousands of dollars 

SOURCE: AClR staff estimates. 
Table 8-2 1 

CORPORATION NET INCOME TAXES 

Capacity Tax Revenue Tax 

Tax Per Capacity Tax Tax Per Effort 

State Base* Capita Index Capacity Revenue Capita Index 

Alabama 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Washington, DC 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey 

New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia Wisconsin 

Wyoming 

U.S. TOTAL $1 68,698 $60.94 100.0 $1 4,257,584 $1 4,257,584 $60.94 100.0 

NOTE: All per capita amounts are in dollars; total amounts are in thousands of dollars. 

Representative Rate = 8.45%. 

*Tax base is apportioned corporate profits in millions of dollars 

SOURCE: AClR staff estimates. 
Table B-22 

TOTAL PROPERTY TAXES 

Capacity Tax Revenue Tax 

Tax Per Capacity Tax Tax Per Effort 

State Base* Capita Index Capacity Revenue Capita Index 

$99.16 38.7 

51 9.57 98.5 

Alabama 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Washington, DC 

Florida 

Georfia Hawa i 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire New Jersey New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia Wisconsm 

Wvominca 

U.S. TOTAL $380.80 100.0 $89,099,519 $89,099,519 $380.80 100.0 

NOTE: All per capita amounts are in dollars; total amounts are in thousands of dollars. 

"No combined tax base can be reported; see tables for individual taxes. 

SOURCE: AClR staff estimates. 
Table €3-23A 

PROPERTY TAXES-RESIDENTIAL - 

Capacity Tax Revenue Tax 

Tax Per Capacity Tax Tax Per Effort 

State Base* Capita Index Capacity Revenue Capita Index 

Alabama 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Washington, DC 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey 

New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia Wisconsin 

Wyoming 

U.S. TOTAL $4,005,834 $229.58 100.0 $53,718,079 $53,718,079 $229.58 100.0 

NOTE: All per capita amounts are in dollars; total amounts are in thousands of dollars. 

Representative Rate = 1.34OI0. 

'Tax base is the estimated market value of residential property in millions of dollars. 

SOURCE: AClR staff estimates. 
Table 6-238 

PROPERTY TAXES-FARM 

Capacity Tax Revenue Tax 

Tax Per Capacity Tax Tax Per Effort 

State Base* Capita Index Capacity Revenue Capita Index 

Alabama 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Washington, DC 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey 

New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia 

Wisconsin 

Wyoming - - 

U.S. TOTAL $770,571 $1 9.61 100.0 $4,588,100 $4,588,100 $1 9.61 100.0 

NOTE: All per capita amounts are in dollars; total amounts are in thousands of dollars. 

Representative Rate = 0.60°/~. 

*Tax base is the estimated market value of farm property in millions of dollars. 

SOURCE: AClR staff estimates. 
Table B-24A 

PROPERTY TAXES-COMMERCIALIINDUSTRIAL 

Capacity Tax Revenue Tax 

Tax Per Capacity Tax Tax Per Effort 

State Base* Capita Index Capacity Revenue Capita Index 

Alabama 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Washington, DC 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia Wisconsin 

Wyoming 

U.S. TOTAL $1,903,083,013 $1 00.24 100.0 $23,454,699 $23,454,699 $1 00.24 100.0 

NOTE: All per capita amounts are in dollars; total amounts are in thousands of dollars. 

Representative Rate = 1.23%. 

'Tax base is the net book value of commercial/industriaI property in thousands of dollars 

SOURCE: AClR staff estimates. 
Table B-246 

PROPERTY TAXES-PUBLIC UTILITY 

Capacity Tax Revenue Tax 

Tax Per Capacity Tax Tax Per Effort 

State Base* Capita Index Capacity Revenue Capita Index 

Alabama 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Washington, DC 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missour~ 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey 

New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia 

Wisconsin 

Wyoming 

U.S. TOTAL $492,387 $31.36 100.0 $7,338,642 $7,338,642 $31.36 100.0 

NOTE: All. per capita amounts are in dollars; total amounts are in thousands of dollars. 

Re~resentative Rate = 1.49%. 

 a ax base is the net book value of public utility property in millions of dollars. 

SOURCE: AClR staff estimates. 
Table 8-25 

ESTATE AND GIFT TAXES 

Capacity Tax Revenue Tax 

Tax Per Capacity Tax Tax Per Effort 

State Base* Capita lndex - Capacity Revenue Capita Index 

Alabama 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Washington, DC 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia Wisconsm 

Wyoming 

U.S. TOTAL $5,682,039 10.96 100.0 $2,563,886 $2,563,886 $1 0.96 100.0 

NOTE: All per capita amounts are in dollars; total amounts are in thousands of dollars. 

Representative Rate = 45.1 O/O. 

*Tax base is federal estate and gift tax liability in thousands of dollars. 

SOURCE: AClR staff estimates. 
Table 8-26 

TOTAL SEVERANCE TAXES 

Ca~acitv Tax Tax 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Washington, DC 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia Wisconsin 

Wyoming 

Tax Per Capacity Tax 

State Base* Capita Index Capacity 

Alabama $24.04 72.1 $95,166 

756.1 31 

Tax 

Revenue 

Revenue 

Per 

Capita 

$1 9.04 

3930.30 

Effort 

lndex 

79.2 

249.0 

0.0 

44.4 

0.8 

33.2 

0.0 

0.0 

0.0 

266.6 

0.0 

0.0 

18.0 

0.0 

4.6 

0.0 

1.3 

171.4 

119.4 

0.0 

0.0 

0.0 

77.6 

634.9 

118.1 

0.0 

174.4 

38.8 

0.0 

0.0 

0.0 

108.8 

0.0 

0.0 

161.0 

4.1 

120.5 

0.0 

0.0 

0.0 

0.0 

120.1 

28.8 

88.1 

22.9 

0.0 

0.0 

0.0 

89.3 

102.6 

108.8 - 

U.S. TOTAL $33.33 100.0 $7,798,312 $7,798,312 $33.33 100.0 

NOTE: All per capita amounts are in dollars; total amounts are in thousands of dollars. 

*No combined tax base can be reported; see tables for particular severance taxes. 

SOURCE: AClR staff estimates. 
Table 8-27 

SEVERANCE TAXES-OIL AND GAS TAXES 

Tax 

State Base* 

Alabama $952,630 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Washington, DC 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia Wisconsin 

Wyoming 

U.S. TOTAL 

Capacity 

Per 

Capita 

$1 6.04 

1575.35 

0.1 1 

23.64 

26.10 

29.57 

0.00 

0.00 

0.00 

3.75 

0.00 

0.00 

0.00 

4.95 

1.88 

0.00 

74.73 

5.31 

161.68 

0.00 

0.00 

0.00 

1 0.40 

0.00 

36.42 

0.1 1 

78.89 

7.87 

1.19 

0.00 

0.00 

21 9.29 

Tax 

Capacity 

lndex 

53.5 

5250.8 

0.4 

78.8 

87.0 

98.6 

0.0 

0.0 

0.0 

12.5 

0.0 

0.0 

0.0 

16.5 

6.3 

0.0 

249.1 

17.7 

538.9 

0.0 

0.0 

0.0 

34.7 

0.0 

121.4 

0.4 

263.0 

26.2 

4.0 

0.0 

0.0 

730.9 

1.2 

0.0 

536.2 

18.8 

646.8 

0.0 

8.9 

0.0 

0.0 

12.8 

1.9 

536.4 

143.5 

0.0 

0.6 

0.0 

56.8 

0.0 

2000.8 

Revenue Tax 

Tax Tax Per Effort 

Capacity Revenue Capita lndex 

$63,503 $72,275 

NOTE: All per capita amounts are in dollars; total amounts are in thousands of dollars. 

Representative Rate = 6.67%. 

*Tax base is the value of oil and gas production in thousands of dollars. 

SOURCE: AClR staff estimates. 
Table 5-28 

SEVERANCE TAXES-COAL SEVERANCE TAXES 

Capacity Tax Revenue Tax 

Tax Per Capacity Tax Tax Per Effort 

State Base* Capita Index Capacity Revenue Capita Index 

Alabama $992,014 $7.16 290.6 $28,350 $3,106 $0.78 1 1 .O 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Washington, DC 

Florida 

Georgia 

Hawaii 

Idaho 

llllnois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire New Jersey New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Vir lnia 

Wiscons B n 

Wyoming 

U.S. TOTAL $20,176,978 $2.46 100.0 $576,632 $576,632 $2.46 100.0 

NOTE: All per capita amounts are in dollars; total amounts are in thousands of dollars. 

Representative Rate = 2.86%. 

*Tax base is the value of coal production in thousands of dollars. 

SOURCE: AClR staff estimates. 
Table B-29 

SEVERANCE TAXES-NONFUEL MINERAL SEVERANCE TAXES 

Capacity Tax Revenue Tax 

Tax Per Capacity Tax Tax Per Effort 

State Base* Capita Index Capacity Revenue Capita Index 

Alabama 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Washington, DC 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey 

New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia 

Wisconsin 

Wyoming 

U.S. TOTAL --- 

NOTE: All per capita amounts are in dollars; total amounts are in thousands of dollars. 

Representative Rate = 0.92O/0. 

*Tax base is the value of nonfuel mineral production in thousands of dollars. 

SOURCE: AClR staff estimates. 
Appendix C 

TAX BASE DEFINITIONS, 

TAX BASES, AND SOURCES FOR 

THE I983 TAX CAPACITY ESTIMATES 

In this appendix, each tax is defined, the tax base or 

tax base proxy is described, and data sources are listed. 

The tax definitions are those used by the Department of 

Commerce, Bureau of the Census. With few exceptions, 

all the data on state and local tax collections were 

supplied by publications of the Census Bureau: State 

Government Tax Collections in 1983, Governmental Finances in 1982-83, and State Government Finances in 

1983. Some unpublished data on various tax components were provided by the Census Bureau and state 

revenue departments. 

1. General Sales or Gross Receipts Taxes 

Definition: Sales or gross receipt taxes generally 

applicable to all types of goods and services. 

Taxes imposed distinctively upon sales of selected commodities are reported separately 

under selective sales taxes. West Virginia's 

sales tax receipts (as reported by the Bureau of 

the Census) from a "business and occupations" 

tax on the coal industry were deleted from the 

sales tax and apportioned to the severance tax. 

Tax Base: General retail sales of retail trade and 

selected service businesses. 

All establishments engaged in selling rnerchandise for personal or household consurnption are included. Service businesses included 

here are hotels and motels, amusement and 

recreation services including motion pictures, 

and personal services such as laundries and 

beauty and barber shops. 

Excluded from this base are sales of food and 

drugs, which are commonly tax exempt. Because of data limitations, sales of gasoline have 

not been excluded, although they are usually 

taxed separately. In general, states have retail 

sales and gross receipts tax bases broader than 

the one defined here because they cover more 

transactions, such as public utility sales, 

wholesale trade, or construction contractors. 

As a result, the rate used for the representative 

tax system is higher than the actual effective 

rate. 

State-by-state sales of selected service industries for 1983 were established by allocating 

the 1983 national total according to the 1977 

state shares adjusted for the change in personal 

disposable income between 1977 and 1983. 

Sources: 

RETAIL SALES 11983): Sales and Marketing 

Management Magazine, 1984 Survey of Buying 

Power, New York, NY, 1984. 

SERVICE SALES (1977): U.S. Department of 

Commerce, Bureau of the Census, Census of 

Business, Selected Services--Area Statistics 

(79771, Washington, DC, 1980. 

SERVICE SALES (1883): U.S. Department of 

Commerc:~, Dureau of the Census, Current 

Business Reports. 1983 Service Annual Survey, Washington, DC, June 1984. 

DISPOSABLE INCOME (1984): U.S. Department of Commerce, Bureau of Economic Analvsis, Survey of' Current Business, Washington, 

DC, August 1984. 

2. Selective Sales and Gross Receipts Taxes (Tax 

levies selectively imposed on particular kinds of 

commodities or husinesses.) 

2A. Motor Fuels 

Definition: Selective sales and gross receipts taxes 

on gasoline, diesel oil, and other fuels used in motor 

vehicles, including aircraft fuel. 
Tax Base: Total quantity of motor fuel consumed in 

gallons. 

Source: 

U.S. Department of Transportation, Federal 

Highway Administration, Highway Statistics 

1983. Motor Fuel Use-1983. Table MF-21, 

Washington, DC, 1984. 

2B. Alcoholic Beverages. 

Definition: Selective sales and gross receipts taxes 

on alcoholic beverages. 

Tax Base: The overall tax base is based on three 

components of consumption (beer, wine, and distilIed spirits), each of which was separately estimated. The tax burden on each of these categories of 

alcoholic beverages was estimated by using data 

supplied by the Distilled Spirits Council in conjunction with Census data for all alcoholic beverages. Of the $2.98 billion total, 51.8% was allocated 

to distilled spirits, 38.4% was allocated to beer, and 

9.8% was allocated to wine. 

Sources: 

TAX BURDEN BY CLASS OF BEVERAGE: Distilled Spirits Council of the United States, 

198311984 Public Revenues from Alcohol Beverages, Washington, DC, 1985. 

DISTILLED SPIRITS CONSUMPTION: Distilled Spirit Council of the United States, Annual Statistical Review 1983. Washington, DC, 

1984. 

BEER CONSUMPTION: United States Brewers 

Association, Brewers Almanac 1983, Washington, DC, 1984. 

WINE CONSUMPTION (1983): Wine Institute, 

unpublished data, San Francisco, CA. 

2C. Tobacco Products. 

Definitions: Selective sales and gross receipts taxes 

on tobacco products, including related taxes on cigarette tubes and paper and synthetic cigars and 

cigarettes. 

Tax Base: Number of packages of cigarettes sold. 

Source: 

The Tobacco Institute, The Tax Burden on Tobacco, Volume 19, 1984, Washington, DC. 

2D. Insurance. 

Definition: Taxes imposed distinctively on insurance companies and measured by gross premiums 

or adjusted gross premiums. 

Tax Base: Direct written premiums or premium receipts by state for life, health, property, and liability 

insurance. 

Sources: 

LIFE INSURANCE: American Council of Life 

Insurance, Life Insurance Fact Book (19841, 

Washington, DC, 1984. 

HEALTH INSURANCE: Health Insurance Association of America, unpublished data, New 

York, NY, 1985. 

BLUE CROSS AND BLUE SHIELD INSURANCE: The National Underwriter Company, 

1985 Argus Health Chart, 87th ed., Cincinnati, 

OH, 1985. 

PROPERTY AND LIABILITY INSURANCE: Insurance Information Institute, Insurance Facts, 

1984-1985, New York, NY, 1984. 

2E. Public Utilities. 

Definition: Taxes imposed distinctively on public 

telephone, telegraph, power and light companies, 

and other public utilities, including local government-owned utilities. These taxes are levied on 

gross receipts, gross earnings, or units of service 

sold. Public utility license taxes are also included in 

this category. 

Tax Base: Gross revenues of all electric, gas, and 

telephone companies. 

Electric and gas revenues are for all publicly 

owned and private companies. Because telephone revenue for the Bell System and the 

independent telephone companies are not 

available on a state-by-state basis, the national 

total of telephone revenues was allocated to the 

states according to a weighted average of the 

number of telephones (32.2%), the number of 

local calls (13.3%), and the number of toll calls 

(54.5%). 

Sources: 

GAS UTILITY REVENUES: American Gas Association, Gas Facts-1983, Arlington, VA, 

1983. 

ELECTRIC UTILITY REVENUES: Edison Electric Institute, Advance Release of Data for the 

1983 Statistical Yearbook of the Electric Utility 

Industry, Washington, DC, 1984. 

TELEPHONE REVENUES AND NUMBER OF 

TELEPHONES: United States Independent 

Telephone Association, Independent Telephone statistics, 1983, Washington, DC, July, 

1984. 

AT&T REVENUES: American Telephone and 

Telegraph Company, 1983 Statistical Report, 

New York, NY, 1983. 

NUMBER OF LOCAL CALLS AND TOLL 

CALLS: Federal Communications Commission, Statistics of Communications Common 

Carriers, 1983, Washington, DC, 1984. 

2F. Parimutuels. 

Definition: Taxes measured by amounts wagered at 

race tracks, including "breakage" collected by the 

government. 

Tax Base: Parimutuel turnover from horse and dog 

racing and jai alai. 

Source: 

National Association of State Racing Commissioners, Parimutuel Racing, 1984, Lexington, 

KY, 1983. 

26. Amusements. 

Definitions: Selective sales and gross receipts taxes 

on admission tickets or admission charges and on 

gross receipts of all or specified types of amusement 
businesses (including gambling operations). License taxes on amusement businesses are also included. 

Tax Base: Receipts of establishments that provide 

amusement and entertainment services. Movie theater receipts and casino net revenues are included. 

Gambling receipts for hotels are classified in the 

general sales tax base. 

State-by-state 1983 data for amusement receipts were derived by allocating the 1983 national total according to the 1982 state shares 

adjusted for the change in disposable personal 

income between 1982 and 1983. 

Sources: 

AMUSEMENT RECEIPTS (1982): U.S. Department of Commerce, Bureau of the Census, 

Census of Business, Selected Services-Area 

Statistics (1 982), Washington, DC, 1985. 

AMUSEMENT RECEIPTS (1983): U.S. Department of Commerce, Bureau of the Census, Current Business Reports, 1984 Service Annual 

Survey, Washington, DC, June 1984. 

DISPOSABLE INCOME (1984): U.S. Department of Commerce, Bureau of Economic Analysis, Survey of Current Business, Washington, 

DC, August 1984. 

License Taxes. (Taxes levied at a flat rate for either 

raising revenue or regulation.) 

3A. Motor Vehicles. 

Definition: License taxes imposed on owners or operators of motor vehicles for the right to use public 

highways, including charges for registration and 

inspection and vehicle mileage and weight taxes on 

motor carriers. 

Tax Base: Number of registrations for private and 

commercial vehicles. 

The base for this tax was allocated to the states 

according to (1) the number of automobiles and 

(2) the number of trucks registered. The total 

tax revenue ($6.23 billion] reported by the 

Census Bureau was apportioned to these two 

classes of vehicles according to data supplied 

by the Federal Highway Administration60.8% for automobiles and 39.2% for trucks. 

Sources: 

TAX BURDEN ON AUTOMOBILES AND 

TRUCKS, AND AUTOMOBILE AND TRUCK 

REGISTRATIONS: U.S. Department of Transportation, Federal Highway Administration, 

Highway Statistics 1983, State Motor-Vehicle 

and Motor-Carrier Tax Receipts-1983, Table 

MV-2, and State Motor Vehicle Registrations1983, Table MV-1, Washington, DC, September 

1984. 

Motor Vehicle O~erators. 

Definition: Licensing for the privilege of driving 

motor vehicles, including both private and commercial licenses. 

Tax Base: Estimated number of licenses in force. 

Source: 

U.S. Department of Transportation, Federal 

Highway Administration, Highway Statistics 

1983, Estimated Licensed Drivers, by 

Sex-1983, Table DL-lA, Washington, DC, 

September 1984. 

3C. Corporations. 

Definition: Franchise license taxes, organization, filing and entrance fees, and all other license taxes 

which are applicable, with only specified exceptions, to all corporations. 

Tax Base: Number of corporations within a state, 

including nonprofit corporations. 

Source: 

U.S. Department of the Treasury, Commissioner of Internal Revenue, Annual Report 

1984, Washington, DC, 1984. 

3D. Alcoholic Beverages. 

Definition: License taxes for manufacturing, importing, wholesaling, and retailing alcoholic beverages other than those based on volume or value of 

transactions or assessed value of property. 

Tax Base: Number of retail licenses issued for the 

sale of distilled spirits. The number does not include licenses for the exclusive sale of beer and 

wine. 

Source: 

Distilled Spirits Council of the United States, 

&mud Statistical Review 1983, Washington, 

DC, 1984. 

3E. Hunting and Fishing Licenses. 

Definition: Commercial and noncommercial hunting and fishing licenses and shipping permits. 

Tax Base: Total number of fishing -and hunting licenses, tags, permits, and stamps issued. 

Source: 

U.S. Department of Interior, Fish and Wildlife 

Service, 1983 Hunting and Fishing License 

Statistics, Washington, DC, 1984. 

Individual Income Tax. 

Definition: Taxes on individuals measured by income and taxes distinctively imposed on special 

types of income (e.g., interest, dividends, intangibles, etc.). 

Tax Base: Total federal income tax liability of state 

residents. 

Federal income tax liability is essentially the 

total amount of federal income taxes paid by 

individuals after credits. Because it is prevailing state practice to allow income tax credits 

for taxes paid to states other than the state of 

residence, residency adjustments were made to 

account for both the income taxes collected 

from nonresidents and credits allowed to residents for taxes paid to other states. The federal 

income tax liability for each state was adjusted 

by the ratio of the BEA residency adjustment to 

resident personal income. 

Sources: 

INCOME TAX: U.S. Department of the Trea- 
sury, Internal Revenue Service, Statistics of 

Income, 1983 Income TQX Returns, Preliminary, Washington, DC, 1985. 

RESIDENCY ADJUSTMENT: U.S. Department 

of Commerce, Bureau of economic Analysis. 

Survey of Current Business, Washington, DC, 

August 1984. 

5. Corporation Income Tax. 

Definition: Taxes on corporations and unincorporated businesses measured by net income. 

Tax Base: Total national net income for each of 35 

Standard Industrial Classification (SIC) industries 

was allocated to the states according to the following procedure: 

Nationwide net corporate income (1980) was 

estimated for each of the 35 SIC industries by 

using profit data (BEA) for each industry. For 

each industry, the typical three-factor formula 

-one-third payroll, one-third property, and 

one-third sales by destination-should be used 

to allocate each industry's national income to 

the states. However, data for corporate property and sales by state are not available and 

proxies had to be used to estimate these factors 

in the formula for each industry. Payroll data 

by industry by state and retail sales data 

formed the basis for the proxies which were 

utilized. 

For the property factor of the formula, property was assumed to be distributed identical to 

payroll. Hence, the payroll factor was used as a 

proxy for property, thus payroll was doubleweighted in the formula. State data on the 

manufacturing industries indicate that there is 

a high correlation between the payroll and 

gross assets of industries across states. 

Because corporate sales by destination are 

unlikely to mirror either payroll or retail sales, 

neither of these proxies was used to estimate 

the sales factor in the formula. Instead, through 

use of payroll breakdowns by industry by state 

and a national input-output table for 1979, a 

proxy for sales was derived according to the 

following procedure: 

, Let: 

X(i,c) = The percentage of the dollar value 

of industry i's output that is commodity c. 

= The percentage of the total dollar 

value of commodity c used as an 

input in industry j. Where c is not 

used as an intermediate input, but 

is purchased by consumers, "personal consumption expenditures" constitute the 36th industry. 

Where A(i,j) = the percentage of industry i's output purchased by industry j. 

When j is personal consumption 

expenditures, A(i,j) is the amount 

of industry i's output that is sold 

as final goods. 

Now let: 

sbjj) = the percentage of industry j's 

payroll located in state w. Where 

industry j is personal consumption expenditures, let j equal state 

w's share of total national retail 

sales. 

36 

Then: C [S(w,j)*A(i,j)l = K(w,i) ill 

Where K(w,i) = the share of industry i's output 

sold in state w. 

Thus, K(w,iJ is used as a proxy for the sales-by-destination factor in the three-factor formula. 

The three-factor formula is applied to the estimated 

total income for each industry to determine each 

state's income apportionment and summed over all 

industries to derive each state's total corporate income 

tax base. 

Let: I(i) = Total income for industry i 

Then: I(w,i) = I(i)+[(ll3)*K(w,i)]*[(213)*S(w,i)] 

And: I(w 

Sou1 

= The income of industry i apportioned to state w. 

35 

= C I(w,i) i=1 

= The total corporate income for all 

industries allocated to state w. 

res: 

CORPORATE PROFITS (19831, BY INDUSTRY: U.S. Department of Commerce, 

Bureau of Economic Analysis, unpublished 

data. 

PAYROLL (1983): U.S. Department of Commerce, Bureau of Economic Analysis, Survey 

of Manufacturing, Mining and Trade Corporations, Washington, DC, 4th quarter, 1983. 

PAYROLL BY INDUSTRY BY STATE: U.S. 

Department of Commerce, Bureau of Economic Analysis, Survey of Current Business, 

Washington, DC, August 1984. 

6C. Farm Real Estate. 

Definition: Taxes conditioned on the ownership of 

farm realty and farm personal property such as 

live-stock, crop inventories, and farm equipment. 

Tax Base: Estimated value of farm land and buildings. 

Then: 

Sources: 

FARM VALUES: U.S. Department of Commerce, Bureau of the Census, Statistical Ab- 
1983 Tax Capacity of the States Insert p. 102a 

of Current Business, Washington, DC, August 

1984. 

INPUT-OUTPUT TABLE: Paula C. Young and 

Mark A. Planting, Summary Input-Output 

Tables of the US. Economy: 1976. 1978, and 

1979, Staff Paper #39, U.S. Department of 

Commerce, Bureau of Economic Analysis, 

Washington, DC, January 1983. 

6. Property Taxes. The property tax is separated into 

four different components - residential, commercial, 

farm, and public utility. Each is estimated individually. 

The allocation of total property taxes among the various 

classes of property are approximations based on assessed values for 1981, except for farm property taxes 

which are annually estimated by the Department of Agriculture. The Census Bureau does not provide a breakdown of property tax payments by class of property. 

6A. Residential Property. 

Definition: Taxes conditioned upon the ownership of 

single family houses not on farms, and multifamily 

residences excluding motels and hotels. Residential 

property tax rates are applied to the combined value of 

buildings and land. 

The residential share of the property tax burden was estimated by the residential share of 

assessed property values in 1981. This share 

was applied to the total of 1983 property tax 

collections, after deduction of farm property 

taxes, to derive residential property tax receipts. 

Tax Base: Estimated residential property values for 

single and multifamily residences. 

1983 property values were estimated by extrapolating the 1981 estimated market value of 

each state's residential property to 1983 based 

on the change in the average purchase prices of 

single family dwellings between 1980-81 and 

1982-83. 

To the estimated market value of existing 

residential property (1983), the value of newly 

constructed housing for 1983 was added. The 

value of newly constructed housing was inflated so as to reflect the value of the associated 

land. 

Sources: 

PROPERTY VALUES (1981): U.S. Department 

of Commerce, Bureau of the Census, 1982 

Census of Governments, Taxable Property 

Values and Assessment-Sales Price Ratios, 

Washington, DC, February 1984. 

SINGLE FAMILY HOME PURCHASE PRICES 

1982-1983: Federal Home Loan Bank Board, 

Mortgage Interest Rate Survey, Characteristics 

of Conventional Fully Amortized First Mortgage Loans Closed on Single-Family Homes, 

unpublished. Washington. DC, 1983. 

VALUE OF NEW RESIDENTIAL CONSTRUCTION CONTRACTS: U.S. Department of Commerce, Bureau of the Census, Statistical Abstract of the United States, 105th ed., Table No. 

1297, Construction Contracts - Value, by 

States, Washington, DC, 1984. 

VALUE OF SITE RELATIVE TO TOTAL 

HOME VALUE: US Department of Housing 

and Urban Development, Federal Housing Administration, FHA Homes 1983 - Data for 

States and Selected Areas on Characteristics of 

FHA Operations Under Section 203, Washington, DC, 1983. 

6B. Commercial and Industrial Property. 

Definition: Taxes conditioned upon the ownership 

of commercial and industrial property (excluding 

public utilities) based on the value of land, buildings, equipment, inventories, and depletable assets 

such as the value of mineral property, oil and gas 

wells, other natural deposits, standing timber, etc. 

The tax burden on business property was derived by applying the percentage of 1981 gross 

assessed value of business property to the total 

of 1983 property tax collections. 

Tax Base: Estimated net book value of assets, including inventories, depreciable assets, depletable 

assets, and land of corporations. 

Property values for partnerships and other 

non-incorporated businesses, farms and public 

utilities are not included. Railroad property is 

included. 

The national 1983 net book values for 35 SIC 

industry groupings were estimated by applying 

to the 1982 values (IRS) the change between 

1982 and 1983 in net book values of property 

assets (FTC). Because FTC data are not available for Transportation, Finance, or Service Industries, their book values were inflated by the 

changes in their respective total payrolls between 1982 and 1983. The estimated corporate 

property values for each industry were allocated to the states according to each state's 

share of each industry's payroll. The sum of all 

the individual industry property values was 

used as an estimate of each state's commercialindustrial property tax base. 

Special adjustments were made to the assets 

of corporations in the coal mining and oil and 

gas extraction industries because they are primarily captives of corporations involved in 

other industries. The assets of the coal mining 

industry were increased to reflect the ownership of coal companies by petroleum refining, 

steel, and utility companies. Similarly, the 

assets of the oil and gas extraction industry 

were adjusted to account for their ownership 

by petroleum refiners. Conversely, the assets of 

the parent industries were decreased by the 

asset amounts that were added to the coal mining and oil and gas extraction industries. 

Sources: 

BOOK VALUE OF ASSETS (1982): U.S. Department of Treasury, Internal Revenue Service, Corporation Source Book of Statistics of 

Income, Washington, DC, 1985. 

BOOK VALUE OF ASSETS, SELECTED INDUSTRIES (1982-83): U.S. Federal Trade Commission, Quarterly Financial Report for 

stract of the United States, 105th ed., Table 

#1156, Washington, DC, 1985. 

FARM PROPERTY TAXES: U.S. Department 

of Agriculture, Economic Research Service, 

Economic Indicators of the Farm Sector, 

State Income and Balance Sheet Statistics, 

1983, Washington, DC, January 1985. 

6D. Public Utilities. 

Definition: Taxes conditioned on investor ownership of public utilities such as gas, electric, and 

telephone companies. 

Public utility property tax rates are applied 

on the combined value of buildings, equipment, material, and land. 

Tax Base: Because individual state data are not 

available, each state's public utility property tax 

base was based on a proxy measure consisting of 

the sum of gas, electric, and telephone company 

nonfinancial assets, estimated as follows: 

1. Gas company net assets were allocated to each 

state according to its share of the total number of 

miles of gas pipeline. 

2. Electric company net assets were allocated to 

each state according to its share of the total investor-owned electrical generating capacity. 

3. Telephone company net assets were allocated to 

each state according to its share of the total 

number of telephones. 

Sources: 

GAS COMPANY NET ASSETS AND GAS 

PIPELINE MILEAGE: American Gas Association, Gas Facts, 1983, Arlington, VA, 1984. 

ELECTRIC COMPANY NET ASSETS AND 

ELECTRICAL GENERATING CAPACITY: Edison Electric Institute, Advance Release of 

Data for the 1983, Satistical Yearbook of the 

Electric Utility Industry, Washington, DC, 

1984. 

BELL SYSTEM NET ASSETS: American 

Telephone and Telegraph Company, 1983 

Statistical Report, New York, NY, 1983. 

INDEPENDENT TELEPHONE COMPANY 

NET ASSETS AND NUMBER OF TELEPHONES: United States Independent Telephone Association, Independent Telephone 

Statistics, 1983, Washington, DC, July, 1984. 

7. Estate and Gift Taxes. 

Definition: Taxes imposed on the transfer of property at death, in contemplation of death, or as a 

gift. 

Tax Base: Federal estate and gift tax liability. 

Because the federal estate laws are applied 

uniformly over the states, a given state's liability should reflect the size of its base. This 

treatment can also be justified because many 

states limit their estate taxes to the amount of 

credit permitted by the federal government 

for state taxes. 

Source: 

U.S. Department of the Treasury, Commissioner of Internal Revenue, Annual Report 

1984, Washington, DC, 1984. 

8. Severance Taxes. 

Definition: Taxes imposed distinctively on the removal of natural pr0ducts-e.g. oil, gas, and other 

minerals. 

The Alaskan special tax on pipeline property 

and the state's unique oil and gas corporate 

income tax have been included, as well as 

New Mexico's property tax on oil and gas 

production equipment and West Virginia's 

business tax on coal companies. Taxes imposed on resources other than minerals, such 

as water, timber, or fish, have been excluded. 

Because oil and gas, coal, and nonfuel minerals are taxed at substantially different rates, 

they are each estimated individually-a separate representative tax rate and base were 

measured for each of the three severance 

categories. 

Tax Base: For each category-oil and gas, coal, and 

nonfuel minerals-the base was estimated by the 

value of production. 

Sources: 

VALUE OF MINERAL PRODUCTION, EXCEPT FUELS: US. Department of the Interior, Bureau of Mines, Mineral Industry Surveys, annual, Washington, DC, 1984. 

OIL PRODUCTION: U.S. Department of energy, Energy Information Administration, Petroleum Supply Annual, 1983, Washington, 

DC, 1984. 

OIL WELLHEAD PRICES, BY STATE: U.S. 

Department of Energy, unpublished data. 

VALUE OF GAS PRODUCTION: U.S. Department of Energy, Energy Information Administration, Natural Gas Annual, 1983, Washington, DC, 1984. 

COAL PRODUCTION AND PRICES: U.S. Department of Energy, Energy Information Adminstration, Coal Production-1983, Washington, DC, 1984. 

VALUE OF URANIUM PRODUCTION: US. 

Department of Energy, Energy Information 

Administration, 1983 Survey of United States 

Uranium Marketing Activity, Washington, 

DC, September 1984. 

Appendix D 

SUMMARY TAX TABLES FOR 

PAST YEARS 

This appendix provides the same detail on Total 

Taxes for past years 1975,1977,1979,1980, and 1981 as 

shown in Appendix B for 1983. Explanations of the data 

concepts appear in the introduction tb Appendix B. 

The data for 1979 and 1980 are the same as in the 

ACIR report, Tax Capacity of the Fifty States, Supplement: 1980 Estimates, released in mimeograph form in 

June 1982. The 1981 data are taken from 1981 Tax 

Capacity of the Fifty States, A-93, published in September 1983. That report also contains revisions of the 

1975 and 1977 data which are reprinted here. The 1982 

data are taken from 1982 Tax Capacity of the Fifty 

States, M-142, published in May 1985. 
Table 0-1 

1975 TOTAL TAXES 

Capacity Tax Revenue Tax 

State Per Capacity Tax Tax Per Effort 

Capita Index Capacity Revenue Capita Index 

Alabama 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Washington D.C. 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey 

New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia 

Wisconsin 

Wyoming 

U.S. TOTALS $635.32 100.0 $136,888,751 $136,888,752 $100.00 635.3 

NOTE: All per capita amounts are In dollars; total amounts are In thousands of dollars 
Table 0-2 

1977 TOTAL TAXES 

Capacity Tax Revenue Tax 

State Per Capacity Tax Tax Per Effort 

Capita Index Capacity Revenue Capita Index 

Alabama $593.58 77.1 $2,245,529 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Washington 0.C 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey 

New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia 

Wisconsin 

Wyoming 

US. TOTALS $769.91 100.0 $169,194,702 $169,194.703 $769.91 100.0 

NOTE: All per caplta amounts are In aollars; total amounts are in thousands of dollars 
Table 0-3 

1979 TOTAL TAXES 

Capacity Tax Revenue Tax 

State Per Capacity Tax Tax Per Effort 

Capita Index Capacity Revenue Capita Index 

$659.55 76.1 $2,551,780 $2,186.816 85.7 

$757,431 

Alabama 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Washington D.C. 

Florida 

Georgia 

Hawaii 

Idaho 

illlnois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississlppi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey 

New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvanla 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virglnla 

Washington 

West Vlr~inia 

Wlsconsln 

Wyomino 

U.S. TOTALS $866.65 100.0 $1 94,621,665 $194,621,667 $866.65 100.0 

NOTE: All per capita amounts are in dollars; total amounts are in thousands of dollars. 
Table D-4 

1980 TOTAL TAXES 

Capacity Tax Revenue Tax 

State Per Capacity Tax Tax Per Effort 

Capita Index Capacity Revenue Capita Index 

Alabama 75.7 $2,799,780 $61 1.67 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Washington D.C. 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey 

New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia 

Wisconsin 

Wyoming 

U.S. TOTALS $948.73 100.0 $215,524,055 $215,524,055 $948.73 100.0 

NOTE: All per caplta amounts are in dollars; total amounts are in thousands of dollars 
Table D-5 

1981 TOTAL TAXES 

Capacity Tax Revenue Tax 

State Per Capacity Tax Tax Per Effort 

Capita Index Capacity Revenue Capita Index 

Alabama $766.74 $2,720,058 

$2,533,290 

$2,702,681 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Washington D.C. 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey 

New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia 

Wisconsin 

Wyoming 

US. TOTALS $1 029.52 100.0 $236,080,697 $236,080,697 $1029.52 100.0 

NOTE: All per capita amounts are in dollars; total amounts are in thousands of dollars. 
Table D-6 

1982 ALL TAXES 

Capacity Tax Revenue Tax 

Per Capacity Tax Tax Per Effort 

State Capita Index Capacity Revenue Capita Index 

Alabama 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Washington, DC 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey 

New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia Wisconsin 

Wyoming 

U.S. TOTAL $1,110.91 . . 

NOTE: All per capita amounts are in dollars; total amounts are in thousands of dollars. 

QU.9. GOVERNMENT PRINTING OFFICE: 1 9 9 6 -6 2 O -7 8 1 /4 7 4 5 



ACIR Publications Related To This Report 

1982 Tax Capacity of the Fifty States, M-142, May 1985, 108 pp., $7.00. 

1981 Tax Capacity of the Fifty States, A-93, September 1983, 117 pp., $5.00. 

- Tax Capacity of the Fifty States: Methodology & Estimates, M-134, ?.larch 1982, 

143 pp., $5.00. 

Significant Features of Fiscal Federalism, 1985-86 Edition, M-146, February 

1986, 264 pp., $10.00. 

Other Recent ACIR Publications 

The Condition of American Federalism: Hearings Held in ACIR's 25th Anniversary 

Year, M-144, March 1986, 40 pp., $5.00. 

Reflections on Garcia and Its Implications for Federalism, M-147, February 

1986, 56 pp., $3.00. 

The States and Distressed Communities, A-101, November 1985, 290 pp., $5.00. 

Intergovernmental Service Arrangements for Delivering Local Public Services: 

U~date 1983. A-103. October 1985. 138 m.. $5.00. 

1985 Changing Public Attitudes on Government and Taxes, S-14, October 1985, 40 

pp., $3.00. 

Bankruptcies, Defaults, and Other Local Government Financial Emergencies, A-99, 

March 1985, 64 pp., $3.00. 

The Question of State Government Capability, A-98, January 1985, 424 pp., 

$10 .oo. 

Strengthening the Federal Revenue System: Implications for State and Local 

Taxing and Borrowing, A-97, October 1984, 145 pp., $5.00. 

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