Beer Tax

13 April 2021 Published in Haas Style Blog

Aaah, tax season - or maybe it is AAAAAAHHHHHH!!!!! Tax Season!!!!!

Either way, we all know April 15th is a ‘holiday’ - a day you know about - and a day you find out if you have to pay Uncle Sam the money that is due on your taxes.  Tax is an interesting thing, we all love the fruits it provides, but hate the idea of paying them.  Well, have you ever thought of all the other taxes that are out there?  Property tax, gas tax, sales tax….what about Beer Tax?

Yeah, Beer Tax.  Well, for every pint, every can, every bottle of suds you sip - we had to pay some tax on that.  Tax is something that breweries, and all alcohol manufacturers have to pay, but it is not something that really gets exposed to you the consumer as part of the price.

Next time you get gas, take a look at the pump, right there on the front is a sticker that tells you how much is state tax, federal tax, and so on.  So you know if you paid $3.00 per gallon, some good chunk of this is paid to these various entities.  Thank you very much - they say.

I am sure every beer drinker realizes there are costs involved when you pull that package off the shelf at your local shop - but maybe Beer Tax did not come to mind.  Obviously the can costs something, the lid costs something, the 6-pack rings cost something, and that amazing liquid inside - also costs something.

So, Beer Tax.  We are regulated under two tax jurisdictions, State and Federal.  Federal is the same for all breweries across the country, we are taxed at $3.50 per barrel of finished beer (one US Barrel is equal to thirty-one gallons of beer).  We do not pay tax on beer that is spilled, only beer that lands in a finished container ready to sell - be that a can, bottle, or keg.

Every State has their own Beer Tax structure.  In Utah we pay per gallon.  We pay $0.41/gallon of beer or $13.10 per barrel (if you are tracking UT against federal tax that is almost four times)  

Other states charge by the package type, or various alcohol content even.  In Utah, we just break our beer into the categories regulated by the UDABC, Beer (5% ABV and below) and Heavy Beer (5.1% and above).  The base rate is the same, as indicated above, but there is a special high point tax that gets charged when you purchase beer at the liquor store or out of our Package Store.

Yep, the state wants another little piece of the action, so when we sell you a can of beer out of our package store, we get to pay a School Lunch Fee of 10%, a Public Safety Tax of 0.875%, and an Administrative Fee of 5% - yep 16% of the “wholesale” price gets lopped off and sent to the DABC each month.  

OK - is your head spinning.  Let’s crack a beer and try to break this down into some numbers I can drink-up.  I will offer three scenarios, a 12-oz can of 5% ABV beer purchased at the grocery store (or similar), a Pint of beer purchased at the brewery, a 12-oz can of Heavy Beer (High Point) purchased at our Package Store.

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Is your head shaking?  These seem like small numbers maybe, but these are for a single can of beer - so every $2 can of beer you pick up at the liquor store generates about $0.40 or 20% of Tax revenue for the State of Utah - pretty nice right!

Multiply this by the 12-pack you just bought at the grocery store - there is another $0.60 of tax paid, in addition to the Sales Tax you get to pay at the register.

So, as you compile and file your taxes this year (we know the date moved to May) - be grateful for beer, and realize that there is a lot of tax out there - it all goes somewhere and makes our clock tick - beer tax is a real thing - and we pay it every month.

Our hope is with each beer you realize this tax is going back to better our communities, improve our schools, and make our surroundings more enjoyable.

Cheers!