It’s the time of year to break up a cold season, and with the country reopening, a BBQ or baseball game is back on the schedule. In the midst of the typical summer spike in beer sales, take a minute to find out how much of your money is actually being used on the cost of a brew.
The United States has a federal excise tax on beer (from $ 0.11 to $ 0.58 per gallon depending on production, location, and quantity), but all 50 states and the District of Columbia also have their own taxes on fermented malt beverages . While general sales taxes are added after the subtotal of the price of goods, most states turn directly to the retailer to collect beer excise taxes (usually expressed in dollars per gallon) based on the amount of beer sold. Although you can’t see the taxes on your receipt, sellers pass these costs on to consumers in the form of higher prices.
In most states, the legal burden of collecting beer excise taxes is on the retailer, but there are some differences in how they are collected from state to state. For example, some states up the supply chain levy taxes by taxing brewers, importers, or other wholesalers as a percentage of sales, or at a fixed price per gallon, bottle, or carton sold. Many states also generate revenue by collecting license fees from beer traders.
Because beer taxes are often levied earlier in the supply chain, the only tax a consumer will see on their receipt is the applicable state or local sales tax applied to the purchase. Some states set higher VAT rates on alcoholic beverages (which apply to beer, wine, and spirits) instead of the general VAT rate.
The enclosed map shows the state beer excise tax rates in all 50 states and the District of Columbia. Prices vary widely: Wyoming is just $ 0.02 per gallon and Tennessee is $ 1.29 per gallon. Missouri and Wisconsin rank second at $ 0.06 per gallon, and Alaska is the second highest tax at $ 1.07 per gallon.
The price per gallon shown on the card reflects the excise beer tax for a 4.7 percent alcohol by volume (ABV) beer in a 12 ounce container. 16 states have excise rates for beer that vary based on alcohol content, place of manufacture, container size, or place of purchase. For example, in Idaho, beer with an alcohol content greater than 4 percent is considered “strong beer” and is taxed at $ 0.45 per gallon like wine. In Virginia, the price per bottle varies for bottles that exceed the 7 and 12 ounce thresholds.
How is your state doing?
Note: This is part of a series in which we examine government excise tax surveys.
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