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PolitiFact’s “Half True” Ruling on State Beer Taxes

2 min readBy: Scott Hodge

Earlier this month, when we published a map of state excise tax rates on beer, we received an unexpected response from PolitiFact Tennessee (a joint project of the Memphis Commercial Appeal and the Knoxville News Sentinel). They rated our listing of Tennessee’s state excise taxAn excise tax is a tax imposed on a specific good or activity. Excise taxes are commonly levied on cigarettes, alcoholic beverages, soda, gasoline, insurance premiums, amusement activities, and betting, and typically make up a relatively small and volatile portion of state and local and, to a lesser extent, federal tax collections. rate on beer as “False.” We’ve been working on state taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. policy since 1937 and publishing data on beer taxes since 1950, so being called out like this was rather surprising – especially given that the figure (in this case $0.14 per gallon) was actually correct.

The PolitiFact team was motivated to write on the topic after representatives of the brewing industry complained on Twitter about Tennessee’s ranking. The state has the 39th highest beer excise tax in the country, but the aggrieved brewers pointed out that there are other taxes in Tennessee that increase the final price of beer as well, in particular a 17% wholesale sales taxA sales tax is levied on retail sales of goods and services and, ideally, should apply to all final consumption with few exemptions. Many governments exempt goods like groceries; base broadening, such as including groceries, could keep rates lower. A sales tax should exempt business-to-business transactions which, when taxed, cause tax pyramiding. .

Responding to the original article by PolitiFact Tennessee, we pointed out that while this is correct, it is irrelevant to the question of whether our map should be considered “True” or “False.” The map was titled “State Beer Excise Tax Rates (Dollars Per Gallon),” and it accurately lists the dollars-per-gallon state excise tax rate on beer in Tennessee and every other state. That makes it true.

The writers and editors at PolitiFact Tennessee responded quickly and politely to our pointing this out, and promised to review the story and its conclusion. After additional phone calls and email messages were exchanged, they issued a revised ruling, calling the data on our map “Half True.” Again, we take issue with this ruling.

Toward the end of the revised piece, the writers emphasize that beer company executives find it “infuriating” when anyone highlights the state excise rate without simultaneously acknowledging the wholesale sales tax that also adds to the cost of their product. With all due respect to both journalists and brewers from the Volunteer State, however, that does not change the definition of what is true. We published accurate excise rate data, and no amount of fury emanating from beer industry lobbyists in Tennessee is going to change that accurate data into being only “Half True.”