What states have the highest alcohol excise taxes? (Alcohol taxes explained!)

What is excise tax?

Excise taxes, also commonly referred to as “sin taxes,” are taxes imposed on specific goods, services, and activities, on a wide variety of those involved in the supply chain, such as the manufacturer, retailer, or consumers. They largely depend on the specifics of the product, goods, services, activity, or location. An excise tax can sometimes be explained as any duty on manufactured goods levied on the manufacturer rather than at the point of sale and is considered an indirect tax, which means the producer or seller ends up paying the levy directly to the government while being expected to recover or pay for this loss by raising the price paid by the consumer. Excises are typically imposed in addition to other popular indirect taxes such as sales tax or value-added tax and are typically distinguished from sales or value-added tax mainly because excise is a per-unit tax that costs a specific amount for a volume or unit of the item purchased, while a sales tax or value-added tax is an ad valorem tax and is directly proportional to the cost of the goods. Also, excise taxes apply to a smaller range of products, and excise is proportionately higher, or a higher fraction than that of the typical retail price of most products.

Excise taxes have played a significant fiscal role throughout early history in the United States. The federal government funding initially relied solely on tariffs put in place on foreign trade, but then, in 1791, under president and general, George Washington, his then-Secretary of the Treasury at the time, Alexander Hamilton, implemented what is known today as the first federal excise tax on whiskey, thus kicking off a system of taxation still in use today. Excise tax is still incredibly prevalent and prominent In the United States, where it is imposed with impunity on the sale and distribution of tobacco, alcohol, and gasoline. These everyday items of mass use, sometimes and often argued as necessities, bring about significant revenue streams for both the federal and local governments. Both tobacco and alcohol are legal drugs, and their uses are prohibited to citizens not yet of a certain age (18 for tobacco and 21 for alcohol). The tables below are mainly focused on how much excise tax is charged for beer, wine, and spirits, depending on state, and is organized by the amount charged per gallon, and includes additional notes and other taxes that are related.

How much excise tax is charged for beer?

StateTax Rate ($/gal)Notes/Other or Additional Taxes   
Alabama$0.53
Alaska                           $1.07
Arizona              $0.16
Arkansas                                    $0.23additional 3% tax for off-premises sales and 10% for on-premises sales
California          $0.20
Colorado           $0.08
Connecticut       $0.24
Delaware           $0.26
Florida               $0.48
Georgia                                         $0.32  charges $1.08 per case and an additional $0.53 per gallon local tax 
Hawaii               $0.93
Idaho                                        $0.15 beer with ABV over 5% is $0.45 per gallon
Illinois               $0.231$0.29 per gallon in Chicago and $0.09 per gallon in Cook County
Indiana              $0.115
Iowa                  $0.19
Kansas                                      $0.18additional 8% tax for all off-premise sales and 10% for on-premises
Kentucky                                  $0.08 additional 10.0% wholesale tax added
Louisiana                                   $0.40additional $0.048 per gallon local tax
Maine                $0.35                        additional 7% for all on-premises sales tax
Maryland           $0.09                        additional 9% sales tax added to all purchases
Massachusetts   $0.11                        additional 0.57% added to on private club sales
Michigan           $0.20
Minnesota         $0.148                      beer under 3.2% ABV is $0.077 per gallon. Add an additional 9% sales tax to all purchases
Mississippi        $0.4268
Missouri            $0.06
Montana            $0.14
Nebraska            $0.31
Nevada               $0.16
New Hampshire $0.30
New Jersey        $0.12
New Mexico      $0.41
New York          $0.14                        $0.12 per gallon in New York City
North Carolina   $0.6171
North Dakota     $0.16                        additional 7% state sales tax added plus an additional “bulk beer” tax is added at $0.08 per gallon.
Ohio                   $0.18
Oklahoma          $0.40                        beer under an ABV of 3.2% is $0.36 per gallon and an additional 13.5% is added to any on-premises sales
Oregon               $0.08
Pennsylvania      $0.08
Rhode Island      $0.11                        additional $0.04 per case wholesale tax added
South Carolina   $0.77
South Dakota     $0.27
Tennessee          $1.29                        additional “Excise Barrelage Tax” is added to any beer stored in a barrel and an additional Wholesale Tax is added
Texas                                      $0.194 6.7% is added to all on-premises sales
Utah                                       $0.4226beer with an ABV over 3.2% must be sold through the state store
Vermont                                   $0.265beer with an ABV over 6% is $0.55 and 10% is added to all on-premises sales.
Virginia              $0.2565
Washington        $0.26
West Virginia     $0.18
Wisconsin         $0.06
Wyoming           $0.02
Washington DC                        $0.09 9% for both off and on-premises sales

Note: The U.S. Median for tax per gallon of beer is roughly $0.20/gal, all states included on this list add an additional sales tax except for Alaska, Delaware, Montana, New Hampshire, and Oregon.

How much excise tax is charged for wine?

State               Tax Rate ($/gal)        Notes/Other or Additional Taxes
Alabama            $1.70                       wine with an ABV over 16.5% is $9.16                    
Alaska                $2.50                                               
Arizona              $0.84                                               
Arkansas            $0.75                        wine with an ABV under 6.3% is $0.25                     
California           $0.20                        sparkling wine is $0.30.          
Colorado            $0.32                                               
Connecticut        $0.79                        sparkling wine is $1.98 and any ABV over 21% is $1.98.
Delaware            $1.63                                               
Florida                $2.25                        sparkling wine is $3.50 and any ABV over 17.259% is $3.00.       
Georgia              $1.51                        wine with ABV over 14% is $2.54 and a $0.83 per gallon local tax is added to all sales.
Hawaii               $1.38                        sparkling wine is $2.12 and wine coolers are $0.85.  
Idaho                  $0.45                                               
Illinois                $1.39                        wine with ABV over 20% is $8.55. In Cook County, $0.24 per gallon excise tax is added to wine up to 14%, and $.45 per gallon is wine between 14%-20%. In Chicago, $.36 per gallon is added to wine and $.89 per gallon is between 14%-20%.
Indiana               $0.47                        wine with an ABV over 21% is $2.68                       
Iowa                   $1.75                        wine with an ABV under 5% is $0.19                       
Kansas               $0.30                        wine with an ABV over 14% is $0.75 and a 8% liquor enforcement tax is added to off-premises sales.
Kentucky           $0.50                        additional 6% sales tax is added to off-premises sales as well as a 10% wholesale tax.
Louisiana           $0.76                        sparkling wine is $2.08 and wine with an ABV between 14%-24% is $1.33, anything over 24% is $2.08. The city of New Orleans is $.05 per gallon and wine with an ABV under 14% is $.10 per gallon, wine between 14%-24% is $.40 per gallon. This includes sparkling wine.
Maine                $0.60                        sparkling and fortified wine is $1.24. 
Maryland           $0.40                        additional 9% sales tax on all alcoholic beverages
Massachusetts    $0.55                        sparkling wine is $0.70.           
Michigan            $0.51                        wine with ABV over 16% is $0.76
Minnesota          $0.30                        sparkling wine is $1.82 and wine with an ABV between 14%-21% is $0.95, anything between 21%-24% is $1.82, and anything over 24% is $3.52. There is also a $0.01 per bottle tax added except for miniatures. There is an added 6.875% general sales tax and 2.5% liquor gross receipts tax applied to beer, wine, and other alcoholic beverages sold at both on and off-sale premises.
Mississippi         $0.35                        sparkling wine is $1.00 and wine products are subject to mark-up.
Missouri             $0.42                                               
Montana             $1.06                        control state for wine with ABV over 16% and these wine products are subject to mark-up
Nebraska            $0.95                                               
Nevada               $0.70                        wine with ABV between 14%-22% is $1.30 and anything over 22% is $3.60 
New Hampshire $0.00                        wine products are still subject to mark-up
New Jersey        $0.88                                               
New Mexico      $1.70                                               
New York          $0.30                                               
North Carolina   $1.00                        wine with ABV over 17% is $1.11
North Dakota    $0.50                        wine with ABV over 17% is $0.60 and a 7% gross receipts tax on retail sales is added for both on and off-premises consumption.
Ohio                   $0.32                        sparkling wine is $1.50 and anything with ABV over 14% is $1.00. The state excise tax rate on vermouth is $1.08 per gallon and all state tax rates include a $.02 per gallon OH Grape Fund fee. Cuyahoga County imposes a $0.32 per gallon excise tax on wine.
Oklahoma          $0.72                        sparkling wine is $2.08.                                  
Oregon               $0.67                        wine with ABV over 16% is $0.77    
Pennsylvania      $0.00                        wine products subject to mark up as well as an 18% Emergency Tax, PA wineries exempt, and $2.50 per gallon excise tax on direct-to-consumer wine shipments.
Rhode Island      $1.40                        sparkling wine is $0.75.                      
South Carolina   $0.90                        $0.18 per gallon additional tax on wine
South Dakota     $0.93                        sparkling wine is $2.07 and if ABW is between 14.1-20%, it is $1.45 and anything between or over 20.1-24% ABW is $2.07. There is an additional 2% occupational wholesale tax.
Tennessee          $1.21                                               
Texas                 $0.20                        sparkling wine is $0.52 and any wine with an ABV over 14% is $0.41        
Utah                   $0.00                        wine products subject to mark-up
Vermont             $0.55                        wine with ABV over 16% is subject to mark-up
Virginia              $1.51                        wine with ABV under 4% is $0.26    
Washington        $0.87                        fortified wine is $1.72
West Virginia    $1.00                        additional state and local sales tax as well as a 5% municipal liquor tax
Wisconsin          $0.25                        wine with ABV over 14% is $0.45    
Wyoming           $0.28                        wine products subject to mark-up
Washington DC $0.30                        sparkling wine is $0.45 and wine with an ABV over 14% is $0.40. The on-premises alcohol sales tax rate is 10% and the off-premises alcohol sales tax rate is 10.25%.

How much excise tax is charged for spirits?

State               Tax Rate ($/gal)        Notes/Other or Additional Taxes
Alabama            *see notes
Alaska                $12.80                      alcohol with ABV under 21% is charged $2.50 per gallon
Arizona              $3.00
Arkansas            $2.50                        alcohol with ABV under 5% is charged $0.50 per gallon and anything under 21% is charged $1.00 per gallon. An additional $0.20 is added per case as well as 3% for off and 14% for on-premises retail fees.
California           $3.30                        alcohol with ABV over 50% is charged $6.60 per gallon
Colorado            $2.28
Connecticut        $5.94                        alcohol with ABV under 7% is charged $2.71 per gallon
Delaware            $4.50                        alcohol with ABV at 25% or less is charged $3.00 per gallon
Florida                $6.50                        alcohol with an ABV under 17.259% is charged $2.25 per gallon and anything with an ABV over 55.780% is charged $9.53 per gallon.
Georgia               $3.79                        additional $0.83 per gallon is added in local taxes.
Hawaii                $5.98
Idaho                  *see notes
Illinois                $8.55                        alcohol with ABV under 20% is charged $1.39 per gallon. The excise tax on alcohol is $2.68 per gallon in Chicago and $2.50 per gallon in Cook County.
Indiana               $2.68                        alcohol with ABV under 15% is charged $0.47 per gallon
Iowa                   *see notes
Kansas               $2.50                        additional 8% for off and 10% for on-premises retail tax
Kentucky           $1.92                        alcohol with ABV under 6% is charged $0.25 per gallon. Also, an additional $0.05 per case and an 11% wholesale tax is added.
Louisiana           $3.03
Maine                 *see notes
Maryland           $1.50                        additional 9% sales tax
Massachusetts    $4.05                        alcohol with ABV under 15% is charged $1.10 per gallon and anything with ABV over 50% is charged $4.05 per gallon and an additional 0.57% is charged on private club sales.
Michigan            *see notes
Minnesota          $5.03                        additional $0.01 per bottle is added except for miniatures and 9% sales tax
Mississippi         *see notes
Missouri             $2.00
Montana             *see notes
Nebraska            $3.75
Nevada               $3.60                        alcohol with ABV between 5%-14% is charged $0.70/gallon and anything between 15% to 22% is charged $1.30 per gallon.
New Hampshire *see notes
New Jersey        $5.50
New Mexico      $6.06
New York           $6.44                        alcohol with ABV under 24% is charged $2.54 per gallon and an additional $1.00 per gallon is added in New York City.
North Carolina   *see notes
North Dakota     $2.50                        additional 7% state sales tax is added.
Ohio                  *see notes
Oklahoma          $5.56                        additional 13.5% is added for on-premises sales.
Oregon              *see notes
Pennsylvania     *see notes
Rhode Island     $5.40
South Carolina  $2.72                        additional $5.36 per case is added and a 9% surtax and an additional 5% on-premises tax.
South Dakota    $3.93                        alcohol with ABV under 14% is charged $0.93 per gallon and an additional 2% wholesale tax
Tennessee          $4.40                        additional 15% on-premises tax and alcohol with ABV under 7% is charged $1.10 per gallon.
Texas                 $2.40                        additional 6.7% is added for on-premises and $0.05 per drink on all airline sales.
Utah                   *see notes
Vermont             *see notes                additional 10% on-premises sales tax
Virginia              *see notes
Washington       $14.27                      additional $9.24 per gallon on-premises and an additional 20.5% retail sales tax, also 13.7% sales tax added to on-premises
West Virginia    *see notes
Wisconsin          $3.25                        additional $0.03 per gallon administrative fee
Wyoming           *see notes
Washington DC $1.50                        additional 9% for both off and on-premises sales tax

Note: In the 17 states annotated above, the government controls the sales of distilled spirits. Revenue in these states is generated from taxes, fees, price mark-ups, and net liquor profits. All states included on this list add an additional sales tax except for Alaska, Delaware, Montana, New Hampshire, and Oregon.

What state is the cheapest and which is the most expensive to buy alcohol?

This answer depends entirely upon the person’s position. Are they a consumer, manufacturer, distributor, purveyor? If a consumer, are they planning on buying and drinking at a bar or buying from a liquor store? If they are somewhere in the production and distribution chain, are they shipping their product across state lines? Is this person looking for beer, wine, or spirits? For the average consumer, just looking for a drink, the cheapest state to buy a 24-pack of beer is in Michigan and the most expensive is in Pennsylvania. The cheapest state to buy wine is California and Texas and the most expensive is by far Kentucky. The cheapest states to buy spirits are Wyoming and New Hampshire, and the most expensive is in Washington.     

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