How state beer taxes hike 6-pack prices

Because local levies differ drastically depending on regional politics, where you live has a lot to do with what you pay.

By Jason Notte Jun 12, 2013 6:57AM
Two pints of beer on barrel (c) Adermark Media/Flickr/Getty Images)Brewers and beer lobbyists are working legislation through Congress that would put tighter caps on federal beer excise taxes. But some states charge up to double the federal rate, draining consumers' beer money and skewing sales.


Washington, D.C., lobbying group the Beer Institute and a number of breweries -- with help from U.S. Reps. Tom Latham, R-Iowa, and Ron Kind, D-Wis., and 33 co-sponsors -- are pushing the Brewers Excise and Economic Relief Act of 2013 (BEER Act), which would reduce the federal excise tax on beer for all brewers and beer importers.


Craft beer industry group the Brewers Association, meanwhile, is making its own play for lower excise taxes on upstart brewers with the Small Brewer Reinvestment and Expanding Workforce Act (Small BREW Act). Sens. Ben Cardin, D-Md., and Susan Collins, R-Maine, have signed on to that particular piece of legislation.


Yet CNNMoney noted Tuesday that states also have a stake in beer excise taxes, and the amount they charge varies wildly. Tennessee, for example, tacks on an extra 66 cents for every six-pack of beer a customer buys, according to The Tax Foundation -- or double the federal rate of 33 cents per six-pack. That's the highest rate in the country and contrasts starkly with Wyoming, which charges a token penny per six-pack at the low end of the tax scale.


So why does it vary so widely, as shown by this CNNMoney map? Political clout may have a bit to do with it. In Tennessee, for example, while brewers bear a heavy tax burden, whiskey makers such as Jack Daniel's parent company Brown Forman (BF.A) have enough pull to keep excise taxes on their product at 30th in the nation.


Meanwhile, in Missouri (3 cents per six-pack), Wisconsin (3 cents), Colorado (5 cents), Pennsylvania (5 cents) and Oregon (5 cents) -- states where Anheuser-Busch (BUD), SABMiller, MolsonCoors (TAP), D.G. Yuengling & Son and the Craft Brew Alliance (BREW), respectively, turn water and hops into jobs and GDP -- beer excise taxes are among the lowest in the country.


Washington state, however, home to a thriving craft beer community and brewing industry, pays one the top 10 rates in the country at 43 cents per six-pack. Minnesota, with an excise tax of 27 cents per six-pack, pays nine times what its neighbors in Wisconsin do.


Tack that on to the existing federal excise tax, state sales tax, bottle fees or other alcohol-specific levies, and it makes a big difference in the price of beer. According to the Beer Institute, taxes make up more than 40% of beer's retail price. That's just fine by Alcohol Justice, an anti-drunken-driving group that wants all state beer taxes hiked to reduce consumption and pay for abuse prevention and health care programs.


But as the Beer Institute notes, the recent recession made it clear just who'll stop buying when beer taxes rise: blue-collar buyers.


"These are guys who drink premium and premium light brands, because it's affordable and that's what middle-class Americans drink," Beer Institute spokesman Chris Thorne told MSN Money in January. "Meanwhile, Wall Street bankers, lobbyists and other well-paid professionals survived the Great Recession just fine and continued to plunk down big bucks for high-end beer, thereby growing their share of market."


More on moneyNOW

29Comments
Jun 12, 2013 1:20PM
avatar
Remember reading about the boston tea party.  It was about excessive, high taxes on something the people wanted.

Jun 12, 2013 1:05PM
avatar

If beer taxes get too high, just brew your own.

Jun 12, 2013 11:08AM
avatar
Beer prices are going up, here comes the inflation.
Jun 12, 2013 2:32PM
avatar

state taxes, federal taxes, income taxes, inheritance taxes, sales taxes, city taxes, ad valorem taxes, property taxes, food taxes, fica taxes, SS taxes, unemployment taxes, county taxes, mobile home taxes, cigarette taxes, beer taxes, wine taxes, hospital taxes, road taxes, gasoline taxes, vehicle tag taxes, school taxes, savings taxes, taxes on taxes, taxes on water, taxes on air, taxes on shoes, taxes on clothes, taxes on salaries, taxes on pensions, taxes on phone, taxes on electricity, taxes on internet, taxes on computers, taxes on satellite services, taxes on watches, taxes on prolia, taxes on aspirin, taxes on gasoline, taxes on shaving creme, taxes on tampons, taxes on medicare, taxes on medicaid, taxes on hotel rooms, taxes on beds, taxes on.....All going up!!!! When the ox is overloaded he will BALK!!!!  Keep Loading him for now, big brudder!!!

Jun 12, 2013 1:33PM
avatar
How much is the tax on a four pack? I pay enough for beer without these obscene taxes. The four pack of Stone Ruination and Dogfish Head 90 Minute IPA already set me back around $11 and the bomber of Ballast Point Sculpin IPA already sets me back around $7.
Jun 12, 2013 4:27PM
avatar
the taxes on anything have no relationship to the amount of money the government spends.  They will outspend us all no matter what.  If you are one of those who doesn't pay income taxes you will still pay more money for goods and services due to taxes.  In a little way we are all equal except for the income tax thing.
Jun 14, 2013 6:27AM
avatar
  See another group (Alcohol Justice) who want to eliminate ALL alcohol consumption, just like other groups want to eliminate 2nd Amendment gun rights, Bloomberg and others eliminating what we eat and drink ... what's next people .... when will we finally say, NO MORE !!
Jun 12, 2013 3:53PM
avatar
Buy your beer on a military base and avoid state & local beer taxes completely. Stores on bases around the USA are exempt from all state & local taxes, and tax free alcohol for the troops & retirees is a good way to keep the VA hospitals full of patients being treated for alcohol abuse.
Jun 12, 2013 2:16PM
avatar
you buzz, you pay your share of government taxation
Jun 12, 2013 1:34PM
avatar
Could we all please stop using the phrase "bikini bod", because, after all, everyone has one, for better or for worse.  And while we are exercising some linguistic self restraint, Congress, please enact a federal laws making it against federal law to enact a federal law that spells out a cutesy acronym?  BEER.  Here's a dinner parlor game to think about.  Come up with new law regulating **** sex, ANALUBE. To make it easier, the "U" and the "B" and the "E" have to be Unprotected, Back and Entry.  
Jun 12, 2013 2:35PM
avatar
Regressive taxation that punishes poor and middle class and KEEPS TAXATION LOW ON WEALTHY

Sales tax
Property tax
ANY FLAT TAX
booze tax
cig tax
ALL state FEES(tabs, license etc)

Are you willing to be taxed with these unfair taxes so that wealthy people can live nearly tax free?

Republicans = REGRESSIVE, UNFAIR TAXATION of those who can least afford to pay. Tax cuts for wealthy.

Jun 12, 2013 3:17PM
avatar
I think the beer tax is fine, However the uses for it I dont agree with.  I think each state needs an evaluation of the alchol problems they have and those with most problems should be taxed more and those funds be use to alchol recovery programs and education programs for early age drinking.
Jun 12, 2013 5:48PM
avatar
I'm all for raising Beer, Wine ,Liquor and Cigarettes Taxes to the point where people will stop using the Drugs and our Health Care, Automobile Insurence costs will once again be affordable .....SOCK IT TO THEM.
Jun 12, 2013 2:39PM
avatar
A quality education is NOT greedy government.

Republican PRISON-FOR-PROFIT is an example of greedy govt.

Want greed removed from govt?

Vote Democratic.

Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

Trending NOW

What’s this?

MARKET UPDATE

[BRIEFING.COM] The stock market is doing pretty much what it was expected to do today in front of the FOMC decision (i.e. nothing).  The major indices are little changed as traders wait anxiously for the Fed's latest directive and updated economic projections.

Everyone is waiting to see if the "considerable time" language is maintained in the directive after Wall Street Journal Fed watcher, Jon Hilsenrath, suggested yesterday it could be.

Mr. Hilsenrath's article ... More

MSN MONEY'S