Before you pop open a cold beer at a Fourth of July barbecue next week, here’s something to keep in mind: Tennessee residents pay the highest beer taxes in the nation. This and other so-called vice taxes add up to hundreds of millions of dollars every year.
1. How high are the beer taxes we pay in Tennessee and what do other states pay?
If you say, “well, I don’t buy or drink beer by the gallon,” that’s just how it’s recorded. The tax rates are based on the taxes on the off-premise sales of 4.7% alcohol beer in 12-ounce containers.
Rates range from as low as $0.02 per gallon in Wyoming and $0.06 per gallon in Missouri and Wisconsin. Alaska charges the second-highest after Tennessee’s $1.29 — they pay $1.07 per gallon, followed by Kentucky and Hawaii at $0.93 per gallon.
2. How much do these taxes add up to for the state?
A: Last year, beer drinkers in Tennessee paid almost $19 million in taxes.
But the other vice taxes actually add up to a lot more in revenue.
Last year, people buying tobacco paid $214 million in taxes, and two other taxes on alcohol totaled $303 million. Those are combined on so-called “mixed drink” taxes and “alcoholic beverages.” That’s all according to the state Dept of Revenue.
In total, alcohol taxes brought in $321 million last year.
When you add in tobacco, is $535 million.
We looked at 2022, that was also over $500 million, and 2021, was $450 million.
So vices can be expensive in more ways than one.