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Alcohol Tax By State

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Alcohol Taxation across States

As our world becomes more interconnected, the collective appreciation for fermented and distilled beverages like beer, wine, and spirits continues to thrive, underpinning cultural traditions, social gatherings, and culinary experiences. However, beneath the enjoyment, these drinks carry both risks and costs. The boost provided by ethanol, alcohol's active component, comes with potential health downsides, such as motor impairments, slower reaction times, and potential for chronic diseases like liver disease and certain types of cancer. In response, governments often impose taxes to manage consumption rates and recover societal costs associated with alcohol-related issues.

Among these is the Alcohol Excise Tax, a levy imposed notably within the United States on a fixed quantity of alcohol. These taxes apply to producers, importers, wholesalers, and sometimes retailers, usually percolating down to consumers through increased prices. The federal government collects roughly $1 billion per month from these excise taxes, with variations in tax rates between beer, wine, and spirits due to differing alcohol content.

Interesting trends and anomalies in statewide alcohol taxes per gallon specific to beer:

  • Tennessee tops the list with the highest beer excise tax at $1.29 per gallon, closely followed by Alaska at $1.07 per gallon. On the other end of spectrum, Wyoming has the lowest tax rate at just $0.02 per gallon. 
  • An east vs. west divide can be seen in the tax rates; with the Eastern states like Georgia ($0.85), South Carolina ($0.77), and North Carolina ($0.62) imposing higher beer taxes as compared to most of the Western states. 
  • Interestingly, New Hampshire, a state that requires all wine and spirits to be purchased from government monopoly stores, has a moderate beer tax rate at $0.30 per gallon compared to other states.
  • With the beer tax rate set at $0.19 per gallon, Texas, a state with one of the largest populations, sits roughly in the middle of the spectrum.

By State

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