- High Tax Burden on Beer: In the U.S., beer taxes represent the most significant cost component, accounting for up to 40.8% of the retail price, surpassing labor and materials, with federal excise taxes varying from $0.113 to $0.581 per gallon depending on production levels and import status.
- State Tax Variations: The highest beer taxes are found in Tennessee ($1.287 per gallon), Alaska ($1.07), and Hawaii ($0.93), while the lowest are in Wyoming ($0.019), Missouri ($0.06), and Wisconsin ($0.065). Tax rates vary significantly by state, with some states imposing additional sales taxes and fees that can affect the overall cost.
- Recent Changes and Complexity of Taxation: In 2025, several states adjusted their beer tax rates, with Connecticut and Kentucky reducing theirs, while Arkansas, North Dakota, and Utah increased theirs. The beer tax landscape is complex, involving various taxes based on alcohol content, production, and retail sales, highlighting the need for consumer and policymaker awareness regarding the true cost of beer.
Source Tax Foundation
