Michigan has eighth highest liquor taxes in nation
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Michiganders pay more in taxes for their liquor than in most other states, a tax research group finds.
Why it matters: 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.
By the numbers: Michigan taxes distilled spirits $14.61 per gallon — that's the eighth highest among U.S. states.
- It's over two dollars more than Ohio's $12.33, and the highest in the Midwest besides Iowa's $15.14, according to the Tax Foundation, an independent policy research organization.
- It's also up more than two dollars since 2016, when the Michigan rate was $11.94 a gallon.
- Michiganders near the border with Indiana could save majorly. Their rate is just $2.68.
Yes, but: We rank much lower when we're taxing alcohol that isn't liquor.
- Michigan's beer tax ranks in the bottom half of states (28th), at 20 cents per gallon.
- Our wine tax ranks even lower (35th) at 51 cents per gallon.
Of note: Alcohol is also subject to Michigan's 6% sales tax.
Catch up quick: Michigan's high liquor tax goes way back to the period after prohibition, per Bridge Michigan. States could choose whether to run alcohol sales or leave them up to private businesses.
- Michigan is among about 17 states that control spirit sales through government agencies.
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 the Tax Foundation. That's driven by newer products like hard seltzers and ready-to-drink cocktails.
- But the alcoholic beverage industry as a whole has slumped, with more consumers opting for nonalcoholic beverages, or at least fewer alcoholic ones.
- The craft beer industry, for example, has been downsizing significantly.