How High Are Champagne Taxes in Your State?

December 28, 2020

Whether 2020 has felt like a blur or a slog—whether it feels like December or as if it’s still March—we are finally reaching the end of a hard year. Traditional New Year’s Eve parties may be out this year, but if your festivities still include popping a bottle of bubbly, the champagne you toast with will be taxed.

According to data compiled from the Distilled Spirits Council of the United States and state revenue departments, Florida comes in with the highest state champagne tax rate at $3.50 per gallon. Next are Kentucky ($3.30 a gallon) and Alaska ($2.50 a gallon). Wisconsin ($0.25) is at the other end of the spectrum, with New York, Kansas, and California tied for second lowest at $0.30 a gallon. A typical bottle of champagne is 760 ml, with “magnum” bottles at 1.5 liters, representing just under 0.2 and 0.4 gallons, respectively.

Most states use the same excise tax rates for champagne and table wine, but 14 have alternate rates for sparkling wine.

Even though states can levy taxes at the production, wholesale, or retail level, vendors ultimately pass along those taxes to consumers in the form of higher prices. On the other hand, four states (Arkansas, Maryland, Minnesota, and South Dakota) and the District of Columbia levy sales taxes specific to alcoholic beverages that consumers pay directly.

As you pop open your bottle of bubbly to toast to better times ahead, take a look at how your state compares on these excise taxes. And here’s wishing you and yours a happier, and healthier, 2021.

New Year's Eve and Taxes. New Year's Eve tax map. Champagne taxes by state

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A 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.

An 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 make up a relatively small and volatile portion of state and local tax collections.