New Study Highlights the Financial Contribution of the Automotive Industry to State and Federal Tax Revenues


tANN ARBOR – In 2010, the production, sales and service, and use of the automobile contributed $91.5 billion to state government tax revenues and at least $43 billion to federal government tax revenues according to a newly-released study conducted by the Center for Automotive Research (CAR), a nonprofit research organization based in Ann Arbor, Michigan.

t“The automotive industry accounts for 13 percent of all state government tax revenues,” said Kim Hill, director of the Sustainability and Economic Development Strategies group at CAR and the study’s lead. “This analysis furthers our understanding of how the automotive sector has a substantial impact on the U.S. economy by contributing to the fiscal stability of state and federal governments. As economic conditions continue to improve, auto companies could see an increase in sales and employment that would generate additional state and federal tax revenues.”

tThe study, produced by the Sustainability and Economic Development Strategies group at CAR, quantifies the financial support from the automotive sector that is provided to state and federal governments in the form of taxes and fees collected due to sales, employment, and business operations, as well as the use of the automobile, and highlights the breadth and depth of these revenue contributions. Beyond the obvious sales taxes generated when vehicles are purchased ($30 billion), government agencies collect taxes from a variety of sources. These sources include income taxes paid by employees working in the automotive sector ($15 billion); taxes and fees on fuels, registrations, and licenses paid by drivers ($89 billion); and corporate income taxes and licensing fees paid by automotive companies themselves ($750 million). The study also provides a detailed breakout of automotive tax revenues for each state in the nation.

tThe report was funded by The Alliance of Automobile Manufacturers and is available on CAR’s website,