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State Taxes

Sources of State Taxes

California receives income from several sources, including taxes, revenue from the sale of bonds and the federal government. This webpage focuses on money the State receives from taxpayers. The three largest sources of revenue to the General Fund are personal income taxes, sales and use taxes, and corporate income taxes. These funds make up the State’s General Fund, which is, basically, the State’s main checking account: the money for most State agency programs, and state funds to local government, comes from the General Fund. The amount of taxes collected is determined through statutes passed by the Legislature and signed by the Governor, and through ballot measures passed by the voters.

Figure 1 shows the portion of revenues collected from each of the three largest sources (Personal Income, Sales and Use, and Corporate Income taxes) for Fiscal Year (FY) 2011-12, which ran from July 1, 2011 through June 30, 2012. Miscellaneous taxes and fees (such as cigarette and alcohol taxes) are grouped together under the “Other” category.

Figure 1 shows sources of General Fund revenues for Fiscal Year (FY) 2011-12. Personal income tax makes up more than half the revenues at 61%, sales and use tax at 23%, corporate income tax at 10%, with 6% from other sources (i.e. cigarette and alcohol taxes).

Figure 1 - Source: State Controller’s Office (Monthly Statement of General Fund Cash Receipts and Disbursements, June 2012)

Figure 2 shows how the amount of taxes collected from the three largest sources have changed since 2001.

Figure 2 shows taxes collected over the last 11 years from three of the largest sources. Personal income tax revenues have been quite volatile, ranging anywhere from slightly more than $30 billion to nearly $55 billion, while sales and use and corporate tax revenues remain relatively steady.

FIGURE 2 - Source: State Controller’s Office (Monthly Statements of General Fund Cash Receipts and Disbursements, June of Fiscal Years Listed)

 

 

Figure 3 shows how much each tax source contributed to the General Fund since 2001. For example, Personal Income taxes provide the largest amount to the General Fund.

Figure 3 shows the largest sources of General Fund revenue as a percentage of the total General Fund for the past 11 fiscal years. Revenues from personal income tax peaked at 60.7% in 2011-12, while sales and use tax averaged 30% and corporate income tax revenues averaged 10%.

FIGURE 3 - Source: State Controller’s Office (Monthly Statements of General Fund Cash Receipts and Disbursements, June of Fiscal Years Listed)

 

Figure 4 shows the total revenues, mostly from taxes, collected for the General Fund since FY 2001-02.

Figure 4 shows the total revenue collected annually for the General Fund for the last 11 fiscal years. The primary source of revenue was taxes, and revenue ranged anywhere from $64.3 to $96.4 billion.

FIGURE 4 - Source: State Controller’s Office (Monthly Statements of General Fund Cash Receipts and Disbursements, Actual Revenues June of Fiscal Years Listed)

Figures 5, 6, and 7 show how much was collected from the top three tax sources: Personal Income, Sales and Use, and Corporate Income taxes, since 2001.

Figures 5, 6, and 7 show the amount of personal income (PIT), sales and use, and corporate taxes collected annually during the last 11 fiscal years. PIT ranged from $32.5 billion to $54.8 billion, sales and use taxes from $19.4 billion to $27.5 billion, and corporate income taxes from $5.1 billion to $12.5 billion.

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Figures 5, 6, and 7 show the amount of personal income (PIT), sales and use, and corporate taxes collected annually during the last 11 fiscal years. PIT ranged from $32.5 billion to $54.8 billion, sales and use taxes from $19.4 billion to $27.5 billion, and corporate income taxes from $5.1 billion to $12.5 billion.

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Figures 5, 6, and 7 show the amount of personal income (PIT), sales and use, and corporate taxes collected annually during the last 11 fiscal years. PIT ranged from $32.5 billion to $54.8 billion, sales and use taxes from $19.4 billion to $27.5 billion, and corporate income taxes from $5.1 billion to $12.5 billion.

FIGURES 5-6-7 - Source: State Controller’s Office (Monthly Statements of General Fund Cash Receipts and Disbursements, June of Fiscal Years Listed)

For more detailed information on the State’s General Fund monthly cash flow, you can find monthly financial statements and summary analyses of cash receipts on the Controller’s website at www.sco.ca.gov.

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Personal Income Taxes

Personal income taxes make up most of the money that goes into the General Fund. This section highlights the changes in the amount of personal income taxes the State received since 2001. State personal income tax rates vary according to income. As personal income rises during good economic times, the amount collected from personal income taxes increases. When there is an economic downturn, personal income falls and, as a result, the amount the State collects from personal income taxes decreases.

Figure 8 shows the amount of personal income taxes collected compared to the total amount of taxes collected for the General Fund. Because personal income taxes are the single largest source of revenue for the General Fund, the lines showing the amount of personal income taxes collected and the total amount of taxes collected are very similar.

Figure 8 shows personal income tax revenues collected compared to the total General Fund revenues collected for the General Fund. These figures, when charted together, follow a similar line with a difference of approximately $40 billion.

FIGURE 8 -Source: State Controller’s Office (Monthly Statements of General Fund Cash Receipts and Disbursements, June of Fiscal Years Listed)

Figure 9 shows how much personal income tax Californians paid out of every $100 they earned. For example, $5.36 was collected in state personal income taxes for the General Fund out of every $100 of personal income earned in FY 2001-02. The numbers for FY 2010-11 are still preliminary and those from FY 2011-12 and FY 2012-13 are estimates.

Figure 9 shows the amount of personal income taxes collected for the General Fund per $100 of personal income earned. The amounts ranged from a high of $6.52 in FY 2005-06 to a low of $4.93 in FY 2008-09.

FIGURE 9 - Source: Department of Finance (Schedule 2, Summary of State Tax Collections, July 2012)

Figure 10 shows how much per capita income (average yearly income per person) has increased since 2000, compared to the change in the per capita (average per person) amount of state personal income taxes paid to the General Fund.

For example, in FY 2001-02 the average yearly income earned was $33,864 and from that amount, the average amount of state personal income taxes paid to the General Fund was $1,815.39. By FY 2012-13, the estimated average yearly income increased to $46,019, while the amount of state personal income taxes paid to the General Fund was $2,433.39. The numbers for FY 2010-11 are still preliminary and those from FY 2011-12 and FY 2012-13 are estimates.

Figure 10 shows that in FY 2001-02 the average yearly income earned was $33,864. From that amount, the average amount of state personal income taxes paid to the General Fund was $1,815.39. By FY 2012-13, the estimated average yearly income increased to $46,019, while the amount of state personal income taxes paid to the General Fund was $2,433.39.

FIGURE 10 - Source: Department of Finance (Schedule 2, Summary of State Tax Collections, July 2012)

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