How High Are Spirits Taxes in Your State?

by Morgan Scarboro, Tax Foundation, June 22, 2017 

Compared to taxes on alcoholic beverages such as wine and beer, distilled spirits are taxed at much higher rates across the states, ostensibly to adjust for higher alcohol content. Today’s map shows how spirits excise taxes in your state compare.

Data for this map comes from the Distilled Spirits Council of the United States. To allow for comparability across states, they use a methodology that calculates implied excise tax rates in those states with government monopoly sales.

Washington state has the highest spirits excise tax rate at $31.48 per gallon, followed by Oregon ($22.78), Virginia ($19.90), Alabama ($18.25), and North Carolina ($14.66). Spirits are taxed the least in Wyoming and New Hampshire, where government-run stores have set prices low enough that they are comparable to having no taxes on spirits. Following Wyoming and New Hampshire are Missouri ($2.00), Colorado ($2.28), Texas ($2.40), and Kansas ($2.50).

Like many excise taxes, the treatment of spirits varies widely across the states. Spirits excise rates may include a wholesale tax rate converted to a gallonage excise tax rate; case and/or bottle fees, which can vary based on size of container; retail and distributor license fees, converted into a gallonage excise tax rate; as well as additional sales taxes. (Note that this measure does not include general sales tax, only taxes in excess of the general sales tax rate.) Rates may also differ within states according to alcohol content, place of production, or place purchased (such as on- or off-premise or onboard airlines).