According to NAHB tabulations of the Census Bureau’s quarterly data, property taxes constituted 39.5% of state and local tax receipts among major sources over the last four quarters.
From the first quarter of 2014 to the end of the first quarter of 2015, sales taxes and individual taxes were responsible for 28% each. At 4.5%, corporate income taxes held the smallest share of state and local tax receipts among major sources.
Further gains are expected in all state and local tax sources as the economic recovery continues, however state and local individual income tax, corporate income tax, and sales tax collections are particularly responsive to changing economic conditions.
Gains in state and local non-property tax collections had outpaced increases in property tax receipts until recently. This trend pushed the property tax share of total receipts from the four major sources from a high of 44.9% in the third quarter of 2010 to just below 40% for the start of 2015. The share stabilized recently as nominal property tax revenues continue to grow. Furthermore, the current property tax share remains higher than pre-housing boom measures.
Revenues from property taxes totaled just under $501 billion for the four quarters ending with the first quarter of 2015.
Lagging property assessments and annual adjustments smooth property tax collections across business cycles. Nominal property tax collections are not as prone to cyclical fluctuations as other tax collections and have tended to increase with minor business cycle fluctuations.
* Data footnote: Census data for property tax collections include taxes paid for all real estate assets (as well as personal property), including owner-occupied homes, rental housing, commercial real estate, and agriculture. However, housing’s share is the largest when considering the stock of both owner-occupied and rental housing units.
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