Assessment of Tax Revenue Generated by the Automotive Sector

Full Description:

This study describes the financial contribution of the motor vehicle industry in supporting federal and state governments through tax revenues, and also examines multiple instruments that generate tax revenues at various points in the automotive product lifecycle. Examples are the sales taxes collected when vehicles are purchased; income taxes paid by employees working in automotive sectors; taxes on fuels, registrations, and licenses paid by all vehicle users; and corporate income taxes business licensing fees paid by automotive companies. As a result of the depth and breadth of the automotive sector, an average of 13% of each state’s tax revenues are related to the automotive industry.

This study confirms that the U.S. automotive sector has a large impact throughout the nation and provides support to state and federal governments in the form of taxes and fees collected from sales, employees, drivers, and the auto companies themselves. As the economy continues in its recovery, auto sales improve, and companies are able to create and retain jobs at greater rates, tax revenues generated by the sector could increase to even greater levels.