One unexpected bright spot of the COVID-19 pandemic was the expansion of state stabilization funds—also known as rainy day funds—driven largely by increases in tax revenue. State and local governments rely heavily on taxes to finance their operations, with the largest sources coming from sales and gross receipts, property, and individual income. While both individual income tax as a share of total revenue and as a share of total tax revenue dipped from 2019 to 2020, individual income taxes continue to be a significant revenue source for most states. Researchers ranked states according to each state’s individual income tax revenue as a share of total revenue.

Originally published on howtohome.com, part of the TownNews Content Exchange.

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