Cash-strapped state governments are using every means at their
disposal to collect tax revenue. Although most of the money that
state and local governments collect comes from income taxes,
property taxes, and general sales taxes, most states also rely on
a variety of smaller but still-important sources of taxation to
add to their coffers.
So-called "sin taxes" on tobacco and alcohol are a popular way
for governments to raise money, and this past week, the Tax
Foundation featured a beer-tax map that shows the amount of taxes
that state governments collect on beer. Let's take a look at the
five states that charge the highest excise taxes per gallon on
beer sales, along with figures from the Beer Institute showing
where they rank in terms of beer consumption.
Hawaii charges $0.93 per gallon in state excise taxes on beer. As
a popular tourist destination, visitors to the islands represent
a substantial addition to the beer that its residents drink, and
the resulting revenue helps balance extremely high state income
tax rates. With average annual per-person beer consumption of
31.2 gallons per person annually, Hawaii makes it into the top 20
states in the nation.
Georgia's state excise taxes on beer amount to $1.01 per gallon.
Somewhat surprisingly for such a hot state, Georgia's per-person
consumption of beer finishes in the bottom 10 in the country, at
just 25.9 gallons per person annually. Yet with relatively low
collections of income tax, property tax, and sales tax, Georgia's
tapping beer as an excise-tax revenue source makes sense for its
In Alabama, the state government charges $1.05 per gallon in beer
excise taxes. With 30.5 gallons per person of annual consumption,
Alabama isn't a huge state for beer-drinking, but it does make it
into the top half of all 50 states. Moreover, very low tax rates
for income, sales, and property taxes make beer-tax revenue
Alaska may seem like the last place on Earth you'd want a frosty
cold beer, but somewhat surprisingly, the icy state weighs in
right in the middle of the pack in terms of the amount of beer
residents drink, at 29.8 gallons per year. Still, given Alaska's
lack of a state income tax, the state government sees it as a
useful revenue source, charging $1.07 per gallon in excise taxes
on the beverage.
Taking top honors in the beer excise tax list is Tennessee, which
charges $1.17 per gallon in excise taxes. With its state income
tax applying only to interest and dividend income, Tennessee has
to make up revenue from other sources, and with the state being
well known for spirits like whiskey, putting more of the burden
on beer makes sense for the local economy. Moreover, beer is
relatively unpopular in the state, with per-person consumption of
25.7 gallons ranking among the 10 lowest in the nation.
The impact of beer taxes
State excise taxes on beer don't necessarily have a huge impact
on state budgets overall, but in tough times, they still
represent an important source of tax revenue, and beer producers
down to smaller craft beer producers like
end up bearing their share of the burden along with their
Excise taxes may affect Boston Beer, but its Samuel Adams
brand helped to redefine beer and kick off the craft beer
revolution in the United States. Success breeds competition,
though, and while just a few years ago Boston Beer had claim
over most of the craft beer shelf, today the field is crowded.
Can Boston Beer rise above the rest
, or will it be squeezed between small local breweries on one
side and global beer giants on the other? To help you decide,
we've compiled a premium research report filled with everything
you need to know about Boston Beer's risks and opportunities.
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to find out whether Boston Beer is a buy today.
has no position in any stocks mentioned. You can follow him on
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