The U.S. Census Bureau's latest "America Counts" story reveals a dramatic transformation in state tax revenue sources over the past 123 years. Data show a fundamental shift from the early 20th century, when many common taxes did not exist at the state level.
In 1902, the Census Bureau's initial collection of government finance data indicated no state sales taxes on general sales, tobacco, motor fuel, or alcohol. Additionally, state income taxes were absent due to administrative difficulties.
Fast forward to 2025, and the landscape is vastly different. Every state now collects some form of general or selective sales and gross receipt taxes, which collectively represent the largest share of national tax revenue at 45.4%. Personal income taxes, collected by 44 states, have become the nation's second-largest source, contributing 33.7% of total tax revenue.