Last week we reported about the massive increase in West Virginia tax revenue over the last 15 years (West Virginia Watchdog, “W.Va. Tax Revenue Doubles in 15 Years.” Now let’s take a look at a one-year snapshot and see where all that money comes from.

Luckily, the Tax Foundation made that easy by taking a look at the various streams of income for fiscal year 2007. The report, “Where Do State and Local Governments Get Their Tax Revenue?,” was authored by Gerald Prante. The data was compiled from the U.S. Census Bureau‘s  government finance data for state and local governments. He writes the following:

“Newly released Census data show how different the 50 states’ fiscal systems are. Their reliance on various sources of tax revenue differs widely because they have different endowed resources and policy priorities. These differences are reflected in state-local tax collections no matter how large or small a fraction of the residents’ income state and local governments have decided to take in taxes.

“States heavily endowed with valuable natural resources, such as Alaska and Wyoming, will usually exploit those tax revenue sources, which they can do without too much fear of driving the activity out of state, given that those natural resources are largely immobile. States seeking a steeply progressive tax code tend to rely heavily on individual income taxes, all else equal.”

The data is broken up into four major categories: property taxes, individual income taxes, general and selective sales taxes, and “licenses and other taxes.” West Virginia made the top 10 for states that rely mostly on licenses and other taxes. 12.4 percent of the state’s tax revenue comes from licensing, while Alaska gets 52.6 percent of funding through licensing.

“In license category, taxes are imposed on motor vehicle licenses, business or corporation licenses, and hunting or fishing licenses. In category of other taxes, major revenue sources are severance taxes (natural resources), stock transfer taxes, and estate/gift taxes.”

West Virginia gets the rest of it’s tax revenue in the following ways:

• 18.7 percent from property taxes. “Property tax includes residential and commercial real estate (mostly local revenue) as well as personal property taxes on cars, boats, etc. (mostly state revenue).”
• 18.4 percent from general sales taxes.
• 19.3 percent from selective sales taxes. “The major selective sales taxes are levied on motor fuel, tobacco, insurance premiums, public utilities (power, telephone service, etc.), amusements and alcoholic beverages.”
• 22.3 percent from individual income taxes. “State and local governments generally lump wages, dividends, interest and capital gains together when applying their individual income taxes.”
• 8.9 percent from corporate income taxes

Stateline.org took this same data and put it a handy chart. The states are sorted based on how much sales tax revenue make’s up their total. West Virginia ranks 35th among the states for sales tax revenue. The full chart is below:

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