The correct answer is C. agricultural income tax.
State governments raise revenue from a variety of sources, including:
- Taxes on income, sales, and property.
- Fees for services such as driver’s licenses and vehicle registration.
- Interest on investments.
- Loans from the central government.
- Transfers from the central government, such as grants for education and healthcare.
Agricultural income tax is not a major source of revenue for state governments. In fact, only a few states levy such a tax. This is because agriculture is a relatively small sector of the economy in most states, and farmers are often considered to be a politically powerful group. As a result, state governments are reluctant to impose taxes that could burden farmers.
The other options are all major sources of revenue for state governments. Income tax is the largest source of revenue for most states, followed by sales tax and property tax. Fees, interest, and loans are also important sources of revenue, but they are not as significant as taxes. Transfers from the central government are a major source of revenue for some states, but they are not as important for others.