Yesterday we released an independent report (PDF) analyzing Nevada Governor Brian Sandoval’s proposed Business License Fee tax. The proposal replaces Nevada’s current $200-flat business license fee with a tiered gross...
- The Tax Policy Blog
- Guess Which State Has the Highest Liquor Taxes in the Nat...
Guess Which State Has the Highest Liquor Taxes in the Nation?
When voters in Washington took to the polls in November of 2011 to approve Initiative 1183, which ended the government’s monopoly on liquor sales, the last thing they expected was to pay more for their alcohol. But instead of cheaper alcohol, residents of the Evergreen State kept the 20.5% spirits sales tax and $3.77 per liter excise tax, but also picked up several new fees. As we noted back in 2012, retailers now pay a liquor retailer license fee of 17 percent of gross revenues along with an annual renewal fee of $166. Distributors must pay a license fee of 10 percent of gross revenues. As a result, Washington has the highest liquor taxes in the nation, with tax bills that approach 100 percent of the sale price of some products.
In order to avoid these high taxes, Washingtonians have turned to their neighbors, Idaho and Oregon, where state taxes on spirits stand at $10.92 and $22.73 per gallon compared to Washington’s $35.22 per gallon. For context, the national median liquor tax is $5.53 per gallon.
So much cross border shopping has occurred that Idaho constructed a new liquor store on the border and has reportedly increased revenue by around $10 million from business with Washingtonians. In a very real sense, consumers are expressing their frustration with their feet.
Sen. Janéa Holmquist Newbry has proposed a bill that would lower the 20.5 percent liquor sales tax to 6.5 percent over the course of eight years. Local sales taxes, which are currently not levied on distilled spirits, would be levied on liquor sales. The net result is a tax cut, and a small step closer to more reasonable liquor taxation in Washington.
Check out our map of liquor taxes across the country.
Follow Scott on Twitter.
Subscribe to the Tax Foundation Newsletter
We will never sell or share your information with third parties.
Join the Tax Foundation's fight for sound tax policy Go
About the Tax Policy Blog
The Tax Policy Blog is the official blog of the Tax Foundation, a non-partisan, non-profit research organization that has monitored tax policy at the federal, state and local levels since 1937. Our economists welcome your feedback. If you would like to send an e-mail to the author of a blog post, please click on that person's name to locate his or her e-mail address or visit our staff page here.
Recent Blog Posts
Related State Articles
- More Research against the Texas Margin Tax, New Kansas Pass-Through Carve Out Data, and Capital Gains Taxes in Washington
- Washington Governor: “Buck Up” and Accept Capital Gains Tax
- Lessons on Legalizing and Taxing Marijuana from the Colorado and Washington Experience: Testimony to the District of Columbia Committee on Business, Consumer, & Regulatory Affairs and the Committee on Finance & Revenue
- 1 of 30
- next ›