U.S. states collected record amount of taxes in fiscal '13

WASHINGTON, April 8 Tue Apr 8, 2014 1:41pm EDT

WASHINGTON, April 8 (Reuters) - U.S. states' tax collections reached a record $846.2 billion in fiscal 2013, the third year of revenue gains after states experienced sizable declines caused by the 2007-09 recession, the U.S. Census reported on Tuesday.

Tax collections in fiscal 2013, which for most states ended last June, rose 6.1 percent from fiscal 2012 as part of an "upward trend in state government tax revenue," the Census reported. The previous year, tax collections had increased by 4.7 percent and in fiscal 2011 they rose 7.3 percent.

The 2007-09 recession did not hit state budgets until fiscal 2009, largely because of lags in tax reporting. That year, though, they tumbled to around $700 billion, ending a string of steady annual improvements that started in fiscal 2003, Census data shows.

All states except Wyoming and Alaska reported an increase for fiscal 2013 over the previous year's tax collections, but the Census said "the explanation for each state's year-to-year changes vary."

Three states, North Dakota, California and Hawaii, registered increases of more than 10 percent. North Dakota, in the middle of an oil boom, rode a rising tide of severance tax revenues, while California reaped additional revenue from an increase in its income tax rates.

Sales taxes were the largest source of tax revenue for states in fiscal 2013, providing $392.7 billion, followed by income taxes at $354.7 billion.

Still, sales tax revenues increased just 3.9 percent in total from fiscal 2012 and only 38 out of the 45 states that levy the tax said the receipts grew from the year before.

That compares to individual income taxes, which shot up 10.3 percent in total. All 43 states with an income tax said those revenues increased.

At the end of 2012, many taxpayers sold off investments and made other financial moves as federal tax cuts passed under President George W. Bush expired. Because many states pattern their tax codes after the federal one, their revenues saw a sharp burst in the final months of fiscal 2013.

(Reporting By Lisa Lambert; editing by Andrew Hay)

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

Find your dream retirement town

Florida? Hawaii? Reuters has teamed up with Zillow to give you the power to customize a list of your best places to retire.  Video | Full Article