Beer Excise Tax Payments

Aside from the usual real estate, income, and sales taxes that businesses pay, U.S. brewers pay an excise tax to the federal government, to state governments, and to some local governments.

The federal excise tax was first imposed during the Civil War as a temporary measure to support the Union army. Brewers paid a tax for each barrel of beer sold.

In 1990, as part of the effort to balance the budget, taxes on beer and luxury items were increased. For large brewers, the beer excise tax doubled, from $9 to $18 a barrel.

Each year U.S. brewers, importers and distributors pay $3.7 billion in federal excise taxes and $1.7 billion in state excise taxes. Ultimately these expenses are passed on to consumers.

Today, over 40 percent of the cost of a bottle of beer is for taxes, including excise taxes. The 1990 increase in the beer excise tax was devastating for the industry. Sales declined by 4.3 million barrels—the largest sales decline in the past 30 years—and 31,000 Americans lost their jobs.

Since 1990 most of the luxury tax increases have been repealed, but the beer excise tax increase remains. The beer industry feels this is an unfair burden for beer drinkers, who typically fall in the lower and middle classes.

The brewing industry is actively supporting a rollback of the 1990 excise tax increase. This would provide relief for the lower and middle classes, allow brewers and wholesalers to expand and hire more workers, and ultimately boost the American economy.

For additional statistics on taxes, select your state from the pulldown to the right or view research reports from the Beer Institute.

Click here to see your tax burden in your state