Good news for the growing number of distillers in Baton Rouge and Louisiana: the Bayou State is home to nation’s 42nd-lowest excise tax rate on spirits—at $3.03 per gallon. In Washington state, where the tax is the highest in the nation, distillers pay more than ten-times as much, $31.48 per gallon.
The Tax Foundation, in a new analysis of spirits tax rates, reports Washington is followed by Oregon ($22.78), Virginia ($19.90), Alabama ($18.25), and North Carolina ($14.66).
On the other end of the scale, the least-taxed states are Wyoming and New Hampshire, where government-run stores set prices low enough to essentially have a no-tax-rate on spirits. Other low-tax states are Missouri ($2), 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.
Rates may also differ within states according to alcohol content, place of production, or place purchased. 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.
The Tax Foundation got its data from the Distilled Spirits Council of the United States. See its full report and state rankings.
