It’s no secret that the motor vehicle sector is the largest manufacturing industry in the United States, but how big is it in terms of state and federal tax revenues?

This is a question the Center for Automotive Research (CAR), a nonprofit research organization based in Michigan, set to find out on behalf of the Alliance of Automobile Manufacturers, which funded the study.

The report concluded that in 2010, the production, sales and service, and use of the automobile in the United States was responsible for generating at least $91.5 billion in state government tax revenue (13 percent of the total) and at least $43 billion to federal government tax revenues.

Of the total 2010 state tax revenues, $30 billion is sourced from taxes on the sales and service of new and used vehicles and $860 million from income taxes on direct employment at auto manufacturers, auto parts suppliers, and dealerships, which increases to more than $4 billion if you include taxes from intermediate and spinoff jobs.

In addition, $60 billion came from use taxes and fees including fuel taxes, registration fees, and driver licensing fees, and $750 million from business taxes such as corporate income taxes and business license fees.

Of the $43 billion in federal government tax revenue, $14 billion is generated from income taxes on direct employment at auto manufacturers, auto parts suppliers, and dealerships (though CAR notes that this number jumps to nearly $69 billion when taxes from intermediate and spinoff jobs are included), while $29 billion is generated from fuel taxes.

In essence, the study sides with those that are in favor of the 2009 automotive bailout that was initiated by the Bush administration and continued by the Obama administration.

“This study confirms that the U.S. automotive sector has a huge economic impact throughout the country,” stated Mitch Bainwol, CEO of the Alliance of Automobile Manufacturers. “Auto policy is central to the economic vitality of virtually every state.”

“In this country, 8 million people are employed directly and indirectly as a result of the manufacture, sale and repair of automobiles. Those 8 million people earn $500 billion in compensation. And as jobs are added, these numbers will climb,” Bainwol concluded.

Story References: Center for Automotive Research via Autonews

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