Actually, Cities and Counties (in California anyway) are the ones that see the tax income. I know for a fact that car sales create the largest sales tax revenue for my town (which doesn't bode well).
A few years ago, during the boom, the State took part of the money away by reducing the DMV fees and then reimbursed the cities the money they lost (another one of those "trust us, we'll take care of you" moves). Got a feeling that's going away with this crisis.