Property taxes accounted for 36.2% of state and local tax receipts from the fourth quarter of 2020 to the final quarter of 2021 for a whopping $672.5 billion, NAHBNow reports. The ratio of property tax revenue to total tax revenue (which also includes individual income taxes, corporate income taxes, and sales tax) dropped slightly from its pre-pandemic average of 37%. Property taxes were followed by individual income taxes at 30.5%, sales taxes at 27.1%, and corporate taxes at 6.2%.
The share of property tax receipts among the four major tax revenue sources naturally changes with fluctuations in non-property tax collections. Non-property tax receipts — including individual income, corporate income and sales tax revenues — are much more sensitive to fluctuations in the business cycle and the accompanying changes in consumer spending (affecting sales tax revenues) and job availability (affecting aggregate income).
In contrast, property tax collections have proven relatively stable, reflecting the long-run stability of tangible property values as well as the smoothing effects of lagging assessments and annual adjustments.