Tennessee residents pay the highest state beer tax rate in the nation — $1.29 per gallon.
That’s well over twice the highest state gasoline tax rates, according to recent analyses from the Tax Foundation, a nonprofit research group.
Beer taxes vary widely across the nation, though. For example, in Wyoming, which has the lowest beer tax rate, residents pay a mere 2 cents per gallon in taxes.
The Tax Foundation reports that wide range is due to the variety of formulas that state and local governments use to tax beer. They can include:
- Fixed per-volume taxes
- Wholesale taxes (which are often a percentage of a product’s wholesale price)
- Distributor taxes (which are sometimes structured as license fees as a percentage of revenues)
- Case or bottle fees (which can vary based on container size)
- Additional sales taxes (which are in excess of the general sales tax rate)
Gas taxes also vary, though only from a high of 50.4 cents per gallon in Pennsylvania to a low of 12.25 cents in Hawaii, with the federal gas tax adding 18.4 cents to those amounts.
The states with the biggest beer taxes are:
- Tennessee: $1.29 per gallon
- Alaska: $1.07
- Alabama: $1.05
- Georgia: $1.01
- Hawaii: $0.93
The states with the lowest beer taxes are:
- Wyoming: $0.02 per gallon
- Missouri, Wisconsin (tie): $0.06
- Colorado, Oregon, Pennsylvania (three-way tie): $0.08
- Massachusetts: $0.11
- Indiana, New Jersey, Rhode Island (three-way tie): $0.12
For help keeping your tab down, check out “5 Tips to Save on Beer.”
What’s your take on alcohol taxes? Do they affect your purchase decisions? Share your thoughts with us by dropping a comment below or on our Facebook page.