State tax collections in fiscal year 2023 totaled $35.388 billion, according to the Department of Revenue (DOR). That’s an increase of 5.8% over 2022. (DOR published its Tax Statistics report for FY 2023 last month.)

Of the top three tax sources, business and occupation (B&O) tax collections increased the most in FY 2023, by 9.9%. Further, since 2000, B&O taxes have increased more than the other two major sources and more than all state taxes combined. (The state property tax jumped in 2018–2021 due to changes to the tax rate and growth limit that were enacted as part of the response to the McCleary decision on school funding.)

The following chart shows collections, adjusted for inflation, of the top five tax sources over time. Note the decline in motor fuels taxes since 2017, which we discussed in our recent report on transportation funding. (The increases in 2016 and 2017 were due to increases in the gas tax rate.)

Collectively, sin taxes totaled $1.275 billion in 2023, which would make them the sixth-largest tax source. (This includes the liquor sales tax, liquor liter tax, beer excise tax, wine excise tax, marijuana excise tax, cigarette tax, tobacco products tax, and vapor products tax.) Marijuana taxes dropped by 9.1% in 2023, and cigarette tax collections continued their long decline.

A few other notes from the report:

• Total tax collections include capital gains taxes for the first time, with $847.5 million booked for FY 2023.
• Estate tax collections were $847.3 million in 2023, which was a 131.7% increase over 2022 and the largest amount going back to at least 1998.
• Real estate excise tax collections were $1.406 billion, a drop of 43.8% from 2022.