(The Center Square) – Colorado ranks 17th in a list of state and local tax collections per capita compiled by the Tax Foundation.
Coloradans paid $6,418.44 per capita in fiscal year 2021, the most recent year with state-by-state information available, according to the Washington, D.C.-based think tank.
State and local governments had favorable tax collections during the pandemic years despite high unemployment in 2020, workforce shortages in 2021 and inflation in 2022. The report found the surge of tax revenue in fiscal years 2021 and 2022 didn’t continue in 2023, but the collections “remain robust in most states and well above the pre-pandemic levels even after accounting for inflation.”
The District of Columbia was the highest in per capita tax collections at $13,278, followed by New York ($10,266), Connecticut ($9,458), California ($9,175), New Jersey ($8,303) and Massachusetts ($8,101).
Alaska had the lowest per capita tax collection rate at $4,192, followed by Alabama ($4,245), Tennessee ($4,272), Florida ($4,405) and Mississippi ($4,435).
“Since fiscal year 2019, the last full fiscal year before the pandemic, state and local tax collections have risen more than 27%,” the report stated. “Much of that gain is subsumed by inflation, but even after adjusting for inflation, state and local tax revenues are more than 7% higher than they were pre-pandemic.”
The report noted several states have reduced individual and corporate income tax rates during the last few years, but the spike in tax revenue is setting a new baseline.
“The rate of revenue growth witnessed in fiscal year 2021 was never going to be sustainable, but most states remain substantially better off than they were pre-pandemic, even after adopting tax relief, with every expectation that the new baseline is far higher than it was before,” the report said. “Revenues are high enough, in some states, that the tax-cutting trends of 2021-2023 are likely to continue into 2024.”