Excise Taxes in the States

This working paper is a foundational piece that presents a comprehensive accounting of all known local, state, and federal excise taxes, a brief history and chronology of each, and their respective “values” relative to total tax revenues.

Taxes on the sale of goods and services are an important source of revenue for state governments within the United States. In 2010, states collected $344 billion or nearly 49 percent of their total tax revenue from sales taxes, and in the past this ratio was even higher. Fifty years ago, states received around 58 percent of their tax revenue from sales taxes. The Census Bureau places sales taxes in two major categories: general sales taxes and selective sales taxes. General sales taxes apply as an equal percentage of all goods and services sold within the state or as a schedule or rates based on categories of products—for example, a lower rate for groceries. These taxes accounted for $224 billion in revenue in 2010.

In this paper, we provide a survey of this latter component—state selective sales taxes—providing information on the taxes imposed by the different state governments of the United States.