Sipping a cold beer on a hot summer day can be one of life’s great adult pleasures. But where you live has a big impact on the price of such a privilege.
In some states, large excise taxes levied on the manufacturer, wholesaler or retailer can be passed on to the customer, pushing up the price of beer.
Recently, the Tax Foundation broke down these taxes state by state to determine where consumers pay the highest taxes on beer. The foundation looked at state excise taxes only and did not include federal taxes on alcohol.
Taxes make up the single most expensive ingredient in beer, according to the Tax Foundation, accounting for “more of the final price of beer than labor and materials combined.” The many different layers of taxes can make up more than 40% of the retail price, the analysis found.
All 50 states and the District of Columbia have excise taxes on beer. That is in addition to other state and local taxes on beer.
Here are the states with the highest — and lowest — beer taxes:
Highest taxes:
- Tennessee: $1.287 per gallon of beer (4.7% alcohol by volume, in 12-ounce containers and imported from another state)
- Alaska: $1.07 per gallon
- Hawaii: 93 cents per gallon
- Kentucky: 89.1 cents per gallon
- District of Columbia: 79 cents per gallon
- South Carolina: 76.8 cents per gallon
- North Carolina: 61.7 cents per gallon
- Maryland: 60 cents per gallon
- Alabama: 53.3 cents per gallon
- Florida: 48 cents per gallon
- Georgia: 48 cents per gallon
Lowest taxes:
- Rhode Island: 12.4 cents per gallon of beer (4.7% alcohol by volume, in 12-ounce containers and imported from another state)
- New Jersey: 12 cents per gallon
- Indiana: 11.5 cents per gallon
- Massachusetts: 10.6 cents per gallon
- Oregon: 8.4 cents per gallon
- Colorado: 8 cents per gallon
- Pennsylvania: 8 cents per gallon
- Wisconsin: 6.5 cents per gallon
- Missouri: 6 cents per gallon
- Wyoming: 1.9 cents per gallon
The Tax Foundation also says several states have made notable changes to their beer taxes in 2025. They include:
- “Connecticut reduced the tax rate on beer from $0.24 per gallon to $0.19 per gallon.
- Kentucky reduced the tax rate on beer from $0.93 per gallon to $0.89 per gallon.
- Arkansas increased the tax rate on beer from $0.35 per gallon to $0.38 per gallon.
- North Dakota increased the tax rate on beer from $0.40 per gallon to $0.43 per gallon.
- Utah increased the tax rate on beer from $0.41 per gallon to $0.43 per gallon.”
Find out how you can save on beer purchases — and recoup some of your Costco membership fee — in “7 Purchases That Will Pay for Your Costco Membership.”
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