Same alcoholic beverage, 50 different tax bills
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Alcohol taxes vary dramatically from state to state, meaning the same can of beer, glass of wine or fancy cocktail can cost significantly more depending on where you order it.
Why it matters: Summer travelers crossing state lines could see those differences add up, especially in places that levy some of the nation's highest taxes on beer, wine or spirits.
The big picture: Alcohol taxes don't follow a single regional pattern. Each state weighs its own needs and interests.
- Washington taxes distilled spirits far more heavily than any other state — $36.68 per gallon compared to the median state spirits tax of $5.98, according to Tax Foundation, an independent policy research organization.
- Near the heart of Appalachia, Tennessee leads the nation on beer taxes, and Kentucky tops the list on wine taxes.
- Legendary beer-producing states like Missouri, Wisconsin and Colorado — think Anheuser-Busch, Miller and Coors, respectively — are among the least beer-taxed states, while California and its wine country have the lowest wine tax rate.
Between the lines: Washington is an expensive outlier, taxing $13-plus more per gallon of spirits than any other state.
- In 2011, state voters chose to transition from a state-controlled system, where the government set prices and managed revenue, to a privatized system. Steeper taxes were introduced to address that sudden government revenue shortfall.
What we're watching: Distilled spirits have topped beer and wine as the U.S. leader in alcohol sales for the past four years, according to taxfoundation.org. That place atop the sales charts is driven by newer products like hard seltzers and ready-to-drink cocktails.
- But the alcoholic beverage industry as a whole has been slumping, with more consumers opting for nonalcoholic beverages, or at least fewer alcoholic ones. The craft beer industry, for example, has been downsizing significantly.
The fine print: See how your state compares to others:
- Distilled spirits taxes by state, on 750 mL bottles of 40% alcohol-by-volume spirits.
- Beer taxes by state, on 12-ounce cans of 4.7% ABV beer.
- Wine taxes by state, on 750 mL of 11% ABV, noncarbonated wine.
