These 10 States Have the Highest Tax on Beer and Alcohol

States have a variety of options for what to tax so they can collect additional revenue for their coffers.

Some states rely on gas taxes to fix roads, while others rely on beer and alcohol taxes to generate extra revenue.

If you're trying to save money shopping for alcohol, the high excise taxes on drinks in these states might make your job more difficult.

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10. Idaho

Tax rate on distilled spirits : $12.15 per gallon

Tax rate on beer : 15 cents per gallon

Idaho makes a distinction between beer and “strong beer.” The latter is beer with more than 5% alcohol by volume (ABV) and is taxed at a higher rate.

Sellers of strong beer also need a wine tax permit to sell beer at that strength.

9. Alaska

Tax rate on distilled spirits : $12.80 per gallon

Tax rate on beer : $1.07 per gallon

Alaska has by far the highest tax on beer on this list. It is the only state that breaks the dollar mark per gallon when it comes to its tax on the suds.

8. Michigan

Tax rate on distilled spirits : $13.57 per gallon

Tax rate on beer : 20 cents per gallon

In addition to the high alcohol taxes, Michigan has one of the highest deposit costs for bottles and cans in the country.

Shoppers have to pay a 10-cent deposit per can or bottle at the time of purchase, which they can get back when they return bottles and cans at select locations.

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7. Iowa

Tax rate on distilled spirits : $14.10 per gallon

Tax rate on beer : 19 cents per gallon

Part of Iowa’s tax revenue on beer comes from the 150 craft breweries in the state.

The Iowa Brewers Guild estimates that the state’s craft brew industry generated more than $1 billion in economic impact for the state last year.

6. Utah

Tax rate on distilled spirits : $15.92 per gallon

Tax rate on beer : 41 cents per gallon

Utah has a reputation for being a relatively dry state, but it still had around $579 million in alcohol sales in 2023.

That generated $236.13 million in the form of taxes that went back to the state.

5. North Carolina

Tax rate on distilled spirits : $16.40 per gallon

Tax rate on beer : 62 cents per gallon

North Carolina is a “control” state, where liquor is sold only at state-run stores. However, you can still buy beer and wine at your local grocery store or convenience store.

4. Alabama

Tax rate on distilled spirits : $21.69 per gallon

Tax rate on beer : 53 cents per gallon

Alabama’s strict liquor laws — including a tax on distilled spirits above $20 a gallon — allow the state to exercise greater control over the manufacturing, distribution, and sales of liquor.

3. Virginia

Tax rate on distilled spirits : $22.06 per gallon

Tax rate on beer : 26 cents per gallon

Virginia is another “control” state, which means the state controls the sale of liquor. You can only buy it at designated stores run by the state, and it marks up the cost in addition to taxes on bottles of liquor.

2. Oregon

Tax rate on distilled spirits : $22.86 per gallon

Tax rate on beer : 8 cents per gallon

Like Michigan, all beverages except wine and distilled liquor have a 10-cent deposit in addition to any taxes on alcohol.

The high deposit encourages consumers to return bottles and cans, with 86% of them being returned in Oregon.

1. Washington

Tax rate on distilled spirits : $36.55 per gallon

Tax rate on beer : 26 cents per gallon

Washington tries to stem excessive drinking by charging the highest tax on distilled spirits in the country, which pushes alcohol prices higher.

In fact, the state has the highest alcohol prices in the U.S. Some critics say the high cost is forcing consumers who hope to get ahead financially to cross the border to other states for cheaper drinks.

Bottom line

If you like a nightcap or want to have fun with friends and family, extra taxes on beer and alcohol can make life tougher.

Perhaps you could make some extra spending cash for alcohol by learning to invest in whiskey . Becoming a teetotaler is another way to save cash.

Money tips that can work for everyone

No matter what your bank account balance is, there's always an opportunity to optimize and improve your finances. Here's a quick checklist of things you can look at today.

Focus on paying off your debt . Debt can hold you back from making progress with your overall financial well-being. Aside from cutting expenses, there are tools that can help you pay off debt faster like balance transfer credit cards and debt counseling.

Earning extra income can give you breathing room. If finances are tight, earning some extra money to supplement your income can make a huge difference. A new job is one option to consider, but if you're not ready to make a big change or already retired, a part-time side job could be a better choice.

Cut your expenses. It sounds painful and so not fun, but it doesn't have to be. Take a look at your biggest expenses because that's where you'll probably find the biggest savings. For example, auto insurance rates have been soaring so shopping around for a new insurance company can be the fastest way to cut your bill. Also, look for ways to cut your grocery bill (despite rising inflation).