Utah ranks 13th highest in the nation when it comes to beer taxes, collecting 41¢ in taxes per gallon of beer. The lowest beer tax in the nation is levied in neighboring Wyoming at 2¢, and the highest beer tax hits consumers in Tennessee at $1.29. The map below from the Tax Foundation shows how Utah ranks on beer taxes.
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Depending on individual state and local governments, the beer tax rate can include per-volume taxes, percentage based wholesale taxes, distributor taxes, or additional sales taxes and fees.
According to the Beer Institute, if all of the taxes levied on the production, distribution and retailing of beer are added up, they amount to more than 40% of the retail price. In fact, the total taxes levied on the production, distribution and sale of beer amounts to $31.9 billion. Even in an era of enormous government budgets, that’s a lot of money coming from a single product! The direct cost to consumers is $5.6 billion in hidden excise tax payments to state and federal governments. At the end of the day, when people buy beer, the tax burden is nearly 70% higher than for the average purchase made in the U.S.
In Utah, revenues from the state beer tax go to the state’s General Fund and the Alcoholic Beverage Enforcement and Treatment Restricted Account. In 2014, the beer tax generated over $8 million in revenue to the state.
Beyond the beer tax, Utah taxes heavy beer, wine and liquor at an even higher rate – usually well above half the sale price of the alcohol. Ten percent of these revenues fund Utah’s school lunch program, one percent goes to the Department of Public Safety, and the rest is transferred to the General Fund. In 2014, these alcohol taxes generated more than $126 million.
The only entity exempt from the beer tax is, ironically, the US government and its agencies. Religious wine is also exempt from paying liquor tax, and military installations pay a much lower percentage rate than other entities.