How important is the auto industry to state and federal governments? According to the Center for Automotive Research, the industry accounts for $135 billion in annual taxes. In fact, a reported 13 percent of all state taxes comes from the automobile, or $91.5 billion in total.

Just as impressive is the overall money that Americans pour into their four-wheeled transportation. CAR estimates that auto sales come in at $564 billion, and parts, repairs and other services add in another $173 billion. And those are the staggering numbers generated in an auto market of only 12 million units per year. So far, 2012 auto sales appear to be moving closer to 14 million units, which should help push the $735 billion total closer to the $1 trillion mark.

The income generated by cars and trucks is certainly significant, but a good portion of that income goes toward new roads. Of the $43 billion that ends up in federal coffers, $29 billion comes from fuel taxes. On the state level, two-thirds of the $91.5 billion comes from taxes on fuel. Still, that amounts to 10 percent of California's overall revenue and a knee-wobbling 23 percent of revenue in Oklahoma.

Auto jobs also contribute serious coin to Uncle Sam, with Michigan leading the way. Uncle Sam took in $2.2 billion from The Mitten State, followed by Ohio and California. Hit the jump to read the CAR press release.
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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.

"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."

The 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.

The report was funded by The Alliance of Automobile Manufacturers and is available on CAR's website, www.cargroup.org.

The Center for Automotive Research's mission is to conduct research on significant issues related to the future direction of the global automotive industry, as well as organize and conduct forums of value to the automotive community. CAR performs numerous studies for federal, state and local governments, corporations, and foundations. The Sustainability and Economic Development Strategies group offers objective analysis and advice while encouraging collaboration between the automotive sector, academia, and communities, with the goal of long-term sustainability of both the industry and communities.


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    • 1 Second Ago
  • 42 Comments
      ChrisH
      • 2 Years Ago
      The article should state it truthfully, the auto industry collected one hundred thirty five billion in taxes for the various levels of government it is required to do so for.
        GreaseMonkeySRT
        • 2 Years Ago
        @ChrisH
        True, but if your business is bigger and you make more money, you're going to be paying more taxes. The article is just showing how large the auto industry is.
      Eric
      • 2 Years Ago
      The 3rd paragraph says it all, 66% of that $135B comes from fuel taxes. So the title is a little misleading, it's more like $30B from manufacturers, and that is all I would include in the "Auto Industry". If the author wanted to play with numbers like that, why not add in the $90B (2008 #) the oil industry paid in income and excise taxes?
      Critter
      • 2 Years Ago
      so this number includes gas tax, sales tax, wage tax, and corporate tax. I think the headline is off on this article. The Auto industry doesn't pay $135 billion; the people who buy cars, drive cars, and people who work in the auto industry pay a vast majority of the $135 billion.
      Frank
      • 2 Years Ago
      That amount of money might cover the next GSA convention.
      jake
      • 2 Years Ago
      "as the economic conditions improve"??? What economy are they talking about? Surely they must be talking about the executive bonuses, I can think of nothing else....oh and when are they gonna start paying back the citizens of the USA? If they can give out 35 million in cash and stock options to one person, then surely they can pay something back, right?
        BrunoT
        • 2 Years Ago
        @jake
        I agree they should pay the money back. But that ship has sailed unfortunately. But here's a lesson on big bonuses. 1. That's between the stockholders and the management. 2. If you think they're overpaid, sell your shares or don't buy any. 3. If enough people agree with you, the stock price will fall rapidly. 4. Most of their bonuses are via stock options. Then management will not earn as much. 5. Obviously shareholders currently do not agree that they are "overpaid" and the companies are poorly run. 6. This is why I own very few stocks. They are a racket where the rube shareholders are fleeced by management and the board for short term personal gain to the detriment of long term financial health of the company.
          Keith Oxford
          • 2 Years Ago
          @BrunoT
          Bruno: It really doesn't matter if they pay the the bail-out money. What matters is that they are paying their taxes, and keeping thousands of folks off the unemployment payroll. Add the two, you'll see why it was the RIGHT thing to do, if you were the government. Anything else would be shooting yourself in the foot. ....and for those of you making morality arguments, which is the bigger sin? Bailing out the auto-industry of that stupid war in Iraq? Financially, the bail-out made the US government money, the Iraq war will still be costing us money (medical for the broken soldiers) clear to the end of this century.
      rstonnerdd
      • 2 Years Ago
      I bet that is just a bunch of one dollar bills under that C-nate on top.
      Jonathan Arena
      • 2 Years Ago
      I wonder how much wall street pays...?
        Tfree
        • 2 Years Ago
        @Jonathan Arena
        10% of all profits from investments go to the government. I would love to get 10% on all my investments! That's sticking it to the evil 1%er's!!!
      ngiotta
      • 2 Years Ago
      Not a ton of money considering how much tax money was used to save the industry. There's a large difference between 10's of billions and a hundred million.
      smithd4200
      • 2 Years Ago
      It is pretty hilarious that the original article was basically a misleading propaganda piece, and Autoblog made it even more misleading by changing one word in the title. Very bad job on this story guys. Original title: Auto Industry Generating $135 bil in Annual Taxes Completely misleading title: Auto industry pays $135 billion in taxes annually
      bullshit
      • 2 Years Ago
      they make it seem like this is coming out of the auto industries pocket when it's not--when you purchase a car YOU pay the taxes which the car company is supposed to turn over to the state-the money was never theirs.
        Rayvan
        • 2 Years Ago
        @bullshit
        Lighten up. The article simply says "income generated by," not who's pocket it came out of. It's pretty clear to me...
          cooker263
          • 2 Years Ago
          @Rayvan
          Makes you think about it differently though, doesn't it? Kind of like your employer paying half of your employment taxes. Most people believe that, but you're really paying for it - any cost that is incurred by your employer is - in economic terms - a tax borne by the employee. We pay many more taxes than we're led to believe. Just like inflation.
        • 2 Years Ago
        @bullshit
        [blocked]
      Zoom
      • 2 Years Ago
      Hm, second biggest industry (after real estate) in the country contributes so heavily. No surprise here.
      Avinash Machado
      • 2 Years Ago
      Does this mean that the bailout was worth it?
        Hanson Bro
        • 2 Years Ago
        @Avinash Machado
        No. The bail-out was nothing more than a huge bone tossed to the UAW. Bond & debt holders were screwed.
          Making11s
          • 2 Years Ago
          @Hanson Bro
          And they wouldn't have been screwed if GM had gone under? Get a clue.
        Brodz
        • 2 Years Ago
        @Avinash Machado
        Yes it does, and you're a bloody fool if you think otherwise. Some Americans have the opinion that their car industry should have been thrown to the dogs. While third world countries are chomping at the bit to secure automotive manufacturing. Unfortunately our Australian government thinks a poultry $17 per tax payer of contribution is worth it. It so isn't. You guys have no idea how lucky you are you have your once proud automotive giants on the road to pride once more.
        • 2 Years Ago
        @Avinash Machado
        [blocked]
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