America's state governments now run on two very different tax engines: income in many coastal and professional-class states, and consumption in much of the Sun Belt and low-tax-growth belt.

Why it matters: States are not just competing over tax rates. They've built systems around which parts of the economy to tax — and which residents feel it most.

• States marketing themselves as low-tax havens often still collect heavily through shopping, gas, insurance, tourism and other transactions — while many blue and purple states rely more on wages, capital gains and corporate profits.

By the numbers: In 2025, 27 states got their biggest share of tax revenue from sales and gross receipts taxes, while 21 relied most heavily on income taxes — individual and corporate combined, according to an Axios analysis of new Census state tax data.

Zoom in: Arkansas is relying less on personal income taxes as Gov. Sanders continues to cut the rate, following cuts from her predecessor Gov. Asa Hutchinson.

• For fiscal 2026, individual income taxes made up about 44% of the state's general revenue, compared to about 49% in fiscal 2020, according to data from the Arkansas Department of Finance and Administration.
• Sanders has said she'd like to eliminate individual income taxes and plans for another cut when lawmakers meet next year.

The most sales-dependent states were Texas at 86.6% of state tax revenue, South Dakota at 83.1%, Florida at 80.3%, Tennessee at 79.4%, Washington at 74.6% and Nevada at 73.9%.

• The most income-dependent states were Oregon at 71%, New York at 67%, Massachusetts at 66.8%, California at 61.1% and Connecticut at 59.5%.

State of play: The U.S. tax map has been remade over the past century.

• When the Census Bureau began collecting state government finance data in 1902, there were no state sales taxes on general sales, tobacco, motor fuel or alcohol.
• By 2025, every state collected some kind of general or selective sales and gross receipts tax, and those taxes made up 45.4% of state tax revenue nationally.

Friction point: The shift toward consumption taxes could make state tax systems feel lighter for high earners while taking a bigger bite from lower-income families.

• Because Black and Hispanic households are disproportionately represented among lower-income and lower-wealth Americans, the tax divide among states could quietly reinforce racial inequality.

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Here's what your local city councils plan to decide today.

Springdale will vote on:

🚓 A budget change tied to its school resource officer agreement with Springdale Public Schools. The district has asked to reduce the number of school resource officers covered under the agreement from 11 to seven, cutting expected district revenue by $178,000. The city plans to temporarily cover the difference for the rest of the year.

🛣️ Paying $75,300 to acquire property at 1393 Janice Lane for the Gene George Boulevard extension project.

Bentonville will vote on:

🚍 Committing up to $50,000 toward the local match for a federal transit-oriented development planning grant application for the Highway 71B corridor.

🚶 A $741,058 contract with Sandridge Construction for phase 2 of the McCollum Sidepath project.

🚧 Increasing Milestone Construction's sidewalk and concrete work contract by $550,000.

Rogers will vote on:

🏗️ Rezoning about 3.7 acres from city medium-intensity to highway commercial.

📍 If you go: 6pm at Springdale and Bentonville city halls, 6:30pm at Rogers City Hall.

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🏘️ Bella Vista's Architectural Control Committee will begin holding public meetings and transition to a seven-member board of the Property Owners Association after the association took over the committee from Blue Crane. (Northwest Arkansas Democrat-Gazette)

🛒 Arkansas retailers reported few problems during the first week of new SNAP restrictions on candy and soft drinks, though some shoppers said the rules were confusing and made checkout more difficult. (Arkansas Democrat-Gazette)

📺 Arkansas TV's removal of "Washington Week" and move of "PBS NewsHour" to 10pm has drawn backlash from viewers who helped raise $2.1 million to preserve PBS programming in the state. (Arkansas Advocate)