The rebounding auto industry contributed about $134.5 billion to state and federal tax revenues in 2010 from taxes and fees, a study by the Center for Automotive Research in Ann Arbor released today shows.
The auto industry continues to be a political hot potato after the government provided financial assistance to General Motors and Chrysler which used bankruptcy protection in 2009 to help them restructure.
The CAR study found that building vehicles, sales and service and use of automobiles contributed $91.5 billion to state government tax revenues and another $43 billion found its way to federal coffers.
"The automotive industry accounts for 13% of all state government tax revenues," said Kim Hill, director of the Sustainability and Economic Development Strategies group at CAR and lead researcher on the study commissioned by the Alliance of Automobile Manufacturers.
"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," Hill said.
Because this was the first time the nonprofit research organization has done a study of this nature, there is no historic data to gauge how the figures have trended.
But some of the data came from the 2010 State Government Tax Collections report of the United States Census Bureau. The March census figures show revenue from fuel, licenses and taxes increased over a decade. Fuel taxes generated $36.6 billion in combined state revenues across the U.S. in 2010 compared with $30 billion in 2000. The Census data also shows taxes on vehicles contributed $21 billion to state revenues in 2010 compared with $15 billion in 2000.
The CAR study shows sales taxes on vehicle purchases last year added up to $30 billion. Income taxes paid by those employed in the auto industry amounted to $15 billion. Taxes and fees on fuel, vehicle registrations and licenses totaled $89 billion. The big ticket item is $750 million in corporate income taxes and licensing fees that automakers paid last year.
While taxes have gone up, the downturn in the economy was tough on the auto industry.
When U.S. auto sales fell from 17 million to 10 million, the fallout included the shuttering of plants, loss of shifts and layoffs of both white- and blue-collar employees. Restructuring by the Detroit automakers also resulted in the termination of many dealer franchises.
