Report: Undocumented immigrants contribute $231 million in state taxes annually


Undocumented immigrants pay an estimated $11.64 billion a year in taxes, according to a report by the Institution on Taxation and Economic Policy. Nearly $231.5 million of that amount is in state and local taxes for Arizona.

The report released last Wednesday quantified undocumented immigrants’ state and local tax contributions and how they would change if the approximately 11 million undocumented immigrants in the country were legalized.

“The main reason for doing the report is that it’s been pretty clear for a number of years that some policymakers have strongly implied that undocumented families pay little or no taxes,” executive director of ITEP Matthew Gardner said. “This report is an effort to show that taxes paid by undocumented families are an awful lot more than zero.”

The numbers in the report are based on estimated undocumented population numbers from the U.S. Census Bureau and tax calculations. There are currently an estimated 264,000 undocumented immigrants in Arizona.

“If you think about an undocumented person who doesn’t bother submitting their tax return, they tend to pay more taxes,” ASU economics professor Timothy James said.

Some undocumented immigrants may even be paying more than they need to by not claiming their tax return, according to Rodrigo Navarro García of the Phoenix Mexican Consulate. This unclaimed money goes back into the government

The report also highlights how much tax revenue would increase if all undocumented immigrants were granted legal status. The increase to state and local tax contributions would be approximately $2.16 billion a year nationally, with nearly $42 million in Arizona.

“We purchase food and clothes, and we are paying taxes for it,” Minerva Perez, who has lived in the United States for 10 years, said. “People should know we are paying taxes. We are not only working but giving back.”

According to the report, 8 percent of an undocumented immigrant’s income goes toward taxes, where the national average for U.S. citizens is 5.4 percent. Navarro said this could be attributed to a number of causes, from higher taxation by employers to more spending and sales taxes.

The reasoning behind the lack of claimed tax returns can differ.

“Sometimes it’s because of fear, sometimes it’s a lack of knowledge that they could do it without becoming a target for immigration authorities,” Navarro said. “The people are still fearing that this information is going to be used for bad purposes. They won’t be willing to go along with this process even when all these programs are protected.”

If executive actions like DACA (Deferred Action for Childhood Arrivals) and DAPA (Deferred Action for Parents of Americans and Lawful Permanent Residents) are fully implemented, current state and local tax contributions would be boosted by more than $805 million. In Arizona, that would be an additional $18.5 million in tax revenue.

Navarro still encourages undocumented immigrants to pay taxes so that if they are granted legal status, they have a good track record with the government.

“There is a specific way for people undocumented in general in this country to pay taxes without a Social Security number, so anyone here in spite of their immigration status has access through IRS to the Internal Transaction Number,” Navarro said. “This number helps them pay taxes and make this declaration of taxes every year.”

Undocumented Immigrants and Tax ContributionsInfographic