Dedicated funding mechanisms remain relatively uncommon among state arts agencies. In fiscal year 2025, only 11 states allocated arts funding through a special tax or fee, yet these mechanisms were highly impactful—accounting for 79% of total revenue for those agencies.
The majority of state arts agencies continue to rely on general fund appropriations, with the median agency receiving 45% of its funding from the state general fund.
The origins of dedicated revenue streams vary. In states like Arkansas and Minnesota, voters amended the state constitution to establish new taxes, with a portion earmarked for the arts. More commonly, however, state legislatures enact these funding sources through statute. Some are explicitly intended to replace general fund appropriations, while others are designed to supplement existing support, often including provisions that prohibit supplanting general funds.
For more information on special taxes and fees or other dedicated revenue strategies, contact NASAA Research Manager Nakyung Rhee.
| Arizona Mechanism: corporate filing fees Statute: Arizona Revised Statutes 10-122 The Arizona Arts Trust Fund receives one-third of the total annual filing fees applied to domestic and foreign corporations. The Arizona Commission on the Arts administers these funds. |
| Arkansas Mechanism: sales tax Statute: Arkansas Constitution, Amendment 75 Nine percent of a special sales tax (1/8 of 1%) is given to the Arkansas Arts Council’s parent agency, the Department of Arkansas Heritage. This tax also provides funds to the state environmental and tourism departments. |
| Delaware Mechanism: recordation fees Statute: Delaware Code Title 9 § 9607 The Delaware Division of the Arts receives $25 in recordation fees from each document filed with county recorders throughout the state. This funding source was created to replace a portion of the general fund appropriation for grants. |
| District of Columbia Mechanisms: sales tax and delinquent debt fees Bill: DC B22-0901 Statute: Amends Title 47 of the District of Columbia Official Code and D.C. Law 19-168; D.C. Official Code § 1-350.04 Beginning October 2018, the DC Commission on the Arts and Humanities receives 5% of the tax revenue collected from a 6% sales and compensating use tax. The same bill also authorized the arts agency to receive a portion of funds annually from the Delinquent Debt Fund, not to exceed $2.5 million. |
| Minnesota Mechanism: sales tax Statute: Minnesota Constitution, Article XI, Section 15 Three-eighths of 1% of sales taxes support the Arts & Cultural Heritage Fund in Minnesota; 19.75% of those dollars are then appropriated by the state legislature to the Minnesota State Arts Board and its 11 regional partners. This sales tax also benefits funds for outdoor heritage, clean water and parks, and will expire in 2034. The Legacy Amendment states that these funds should supplement, not replace, each department’s legislative appropriation. |
| Mississippi Mechanism: sales tax Statute: Mississippi Code § 37-61-33 A portion of state sales tax is deposited into the Education Enhancement Fund each year. The Mississippi Arts Commission is authorized to receive up to $450,000 from this fund each year, and has received that amount nearly every year since the mechanism began. |
| Missouri Mechanism: income tax Statute: Missouri Revised Statutes Chapter 143, Section 143.183 Sixty percent of a 2% income tax on nonresident professional entertainers and athletes is deposited into the Missouri Arts Council trust fund. This income tax also funds the Missouri Humanities Council trust fund, the Missouri State Library networking fund, the Missouri Public Television Broadcasting Corporation special fund and the Missouri Historic Preservation revolving fund. In FY2018, legislation extended the income tax sunset clause from 2020 to 2030. Due to state budget constraints around the Great Recession, the Missouri Arts Council was directed by the state legislature to spend the principal of the trust, while revenues from the tax have been diverted to other state expenses. The Arts Council still receives the bulk of its funding from this mechanism, which is appropriated yearly through the general fund. In FY2025, money coming from the trust comprised 100% of the Arts Council’s state legislative appropriation. |
| Nevada Mechanism: hotel/motel room tax Statutes: Nevada Revised Statutes 244.3354; Nevada Revised Statutes Chapter 368A The Nevada Arts Council received funds from two different taxes in FY2018. First, the parent agency of the Arts Council, the Department of Tourism and Cultural Affairs, receives 3/8 of 1% of the state’s hotel and motel room tax. Some of these tax revenues are transferred to the Arts Council. This funding source provided roughly two-thirds of the agency’s FY2022 legislative appropriation. Second, Nevada has an admission tax on live performances at a rate that varies from 5-10%. A transfer from the Department of Taxation of funds generated by this tax amounted to 8% of the Arts Council’s state funding. |
| New Jersey Mechanism: hotel/motel room fees Statute: New Jersey Permanent Statutes 54:32D-2 The New Jersey State Council on the Arts is appropriated a minimum of $16 million from state fees levied on hotel and motel rooms. It was appropriated at the minimum amount allowed for many years until 2021, but has seen increases since then. |
| South Dakota Mechanism: tourism tax Statute: South Dakota Codified Laws Chapter 10-45D The parent agency of the South Dakota Arts Council, the Department of Tourism, receives 1.5% of the tax levied on a variety of tourism related activities. Taxed activities include spectator events and visitor attractions as well as room and campground rentals. A portion of these tax revenues is used to fund the Arts Council. This funding source made up the entirety of the agency’s FY2025 legislative appropriation. |