Sources of Revenue: A History of State Taxes and Fees in Texas, 1972-2013 Page: 20
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SOURCES OF REVENUE
TABLE 3
eanState Tax Collections
Average Annual Growth Rates for Selected Periods, Fiscal 1972-2013Fiscal 1972=
rough
scal 1983:Fiscal 1983
through
Fiscal 1992Fiscal 1992
through
Fiscal 2001Fiscal 2001
through
Fiscal 2003Fiscal 2003
through
Fiscal 2008Fiscal 2008'
through
Fiscal 2010Fiscal 2010
through
Fiscal 2013.4-
Personal Income
Inflation x Population.
Sales Taxes:
Oil Production Tax
Natural Gas Tax
Motor Fuels Taxes.
Motor Vehicle Taxes
Franchise Tax
Cigarette and Tobacco Taxes
Alcoholic Beverage Taxes
Insurance Taxes
Utility Taxes
Inheritance Tax
Hotel Occupancy Tax
Other Taxes
Al. Taxes:13.5%
111%
13.5%
18.0%
22.4%
3.0%
12.1%
14.2%
4.0%
10.8%
11.1%
22.5%
7.6%
15.2%
1.0%
12.4%.6.1%
5.3%
11.1%
(8.9)%
(8.1)%
16.6%
8.5%
7.8%..
5.7%
4.0%
9.8%
(0.3)%
5.3%
13.6%
(7.9)%
7.2%75%
4.8%
6.2%
(1.6)%
13.8%
3.9%
10.1%
6.7%
0.0%
3.8%.
5.3%
5.1%
9.6%
7.7%
(2.3)%
6.2%when the tax rate remained constant at 4 percent, the aver-
age annual growth rate exceeded 13 percent. From 1983 to
1992, average annual growth dropped slightly to 11.1 per-
cent, despite the noted base broadening and rate increases.
From 1992 through 2001, average annual growth slowed
to 6.2 percent.
In the wake of the September 11, 2001 terrorist attacks,
collections fell 1 percent-to $14.5 billion-in fiscal 2002.
The 2002 decline was the first annual decrease in Sales and
Use tax collections since 1983, when collections fell by 4.5
percent. In the next year, the ensuing economic slowdown
caused collections to drop another 1.7 percent, to $14.2
billion.
As the economy improved in 2003, so did tax col-
lections. From 2003 to 2008, collections registered 8.6
percent average annual growth, peaking at over 12 percent
in 2006.
In 2009, the effects of the national recession hit the
Texas economy, and tax collections declined by 2.7 per-
cent. The rate of decline accelerated to 6.6 percent in 2010,
the steepest annual decline in Sales and Use tax collections
history. During this two-year period, collections fell by an
average of 4.7 percent each year.2.3%
3.6%'
(1{3)%.
(2.2)%
(18.1)%
1.3%
(3.7)%
(6.4)%
(0.2)%
2.4%
19.4%
(1.6)%
(23.9)%
(3.9)%
2 5%
(2.0)%7.7% (0.3)%:
'5.2% 2.8%8.6%.
27.7%
20.2%
1.8%
4.4%
21.0%
19.9%
6.7%
4.4%
8.9%:
(50.5)%
10.2%
32.1%:
9.6%(4.7)%
(16.2)%
(48.0)%
(1.O)%
(11.3)%
(6.9)%
(2.0)%
1.6%
(4.4)%
282.1%
(5.6)%
(9.9)%
(7.4)%6.5%
3.8%9.7%
43.7%
27.3%
1.97.
13.8%7
7.6%
4.8%
6.5%
10.0%
(3.2)%'
(49.8)%
10.1%
20.1%
10.5%8.1%
6.4%
8.8%
6.9%
7.2%
5.5%
8.0%
9.2%
4.8%
6.1%
8.2%
7.3%
(3.2)%
10.1%
2.3%
..6%In 2011, Sales and Use tax revenues rebounded as the
economy recovered, growing by 9.7 percent. Sales and
Use tax growth continued to be strong as the drilling for oil
in the shale formation surged and the economy continued
to improve with increases of 12.5 percent in 2012 and 7.3
percent in 2013. The average growth rate over this three
year period was 9.7 percent.
Franchise Tax
The corporate income tax is the principal tax on busi-
ness entities in 44 states. (See Appendix D-3) Currently in
Texas, corporations, partnerships, limited liability compa-
nies and other forms of business pay the state Franchise
tax. Prior to 2008, only corporations and limited liability
companies were subject to the Franchise tax.
Over the years, revenue from this tax has fluctuated,
in part because of court challenges, base erosion and
tax planning opportunities. In fiscal 1972, the tax was
levied at an effective rate of $4.25 per $1,000 of taxable
capital, and it produced $128.8 million in tax revenues
that year-5.5 percent of all state tax revenues. Between
1973 and 1983, revenues grew at a 14.2 percent average
annual rate. (See Table 3) By 1986, one year after a20 e June 2014, Texas Comptroller of Public Accounts
Fiscal 1972
through
Fiscal 2013
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Texas. Comptroller's Office. Sources of Revenue: A History of State Taxes and Fees in Texas, 1972-2013, article, June 2014; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth639576/m1/28/: accessed April 28, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.