The state with the highest tax rate on distilled spirits is Washington, where the tax (dollars per gallon) is $26.70, according to the Tax Foundation in its 2012 report, Facts & Figures: How Does Your State Compare?
Coming in second is Oregon, where the tax rate on liquor is $23.03. Virginia is third, with a rate of $20.91, and Alabama fourth at $18.61.
In the states where the government controls sales, says the Tax Foundation, “products are subject to ad valorem mark-up and excise taxes. The excise tax is calculated using a methodology developed by the Distilled Spirits Council of the United States.”
In Washington, Oregon, Virginia, and Alabama, the governments there control the sale of booze. This is the case for the top 10 states with the highest tax rates on liquor – excluding Alaska, which is not a state-controlled liquor entity -- as listed below:
1. Washington $26.70 (dollars per gallon)
2. Oregon $23.03
3. Virginia $20.91
4. Alabama $18.61
5. Michigan $13.24
6. Iowa $13.18
7. N. Carolina $13.03
8. Alaska $12.80
9. Utah $11.63
10. Idaho $11.28
The 10 states with the lowest tax rates on alcohol are the following:
1. New Hampshire $0.00 (dollars per gallon)
2. Vermont $0.32
3. Wyoming $0.83
4. Missouri $2.00
5. Colorado $2.28
6. Texas $2.40
7. Kansas $2.50
8. Louisiana $2.50
9. W. Virginia $2.55
10. Indiana $2.68
Six of those 10 low-tax-on-liquor states do not have government-controlled sales, but four do: New Hampshire, Vermont, Wyoming, and West Virginia.
Thirty two states have non-government control over the sale of alcohol. Eighteen states are “control states,” where the government controls the sales.