Sin and Taxes

"Why pick on us? What about a tax on alcohol?" Guaranteed, that's one of the first things out of a smoker's mouth on the issue of rising tobacco taxes. So, what about alcohol?

An NCSL report comparing the 50 states on alcohol taxes vs cigarette and tobacco taxes revealed that there are far fewer states that passed laws on alcohol, although many have tried. View the comparison chart here.

Here are some of the states' efforts on taxing alcohol:

California: Lawmakers have proposed targeting liquor and wine for a "dime a drink" surcharge.

Delaware: Lawmakers proposed a 50% increase to the alcohol tax. The measure did not pass.

Illinois: Their enacted budget raises the taxes on beer (25%), wine (90%, from $0.73 per gallon to $1.39 per gallon), and distilled spirits by (90%, from $4.50 per gallon to $8.55 per gallon).

Kentucky: The governor signed a measure that will apply a 6% sales tax on packaged alcohol sales starting April 1, 2009 (the exemption of alcoholic beverages from the state sales tax was ended). The measure is expected to generate $51.9 million in FY 2010.

Maryland: Lawmakers proposed raising the state's excise tax on alcohol to the equivalent of $0.05 per drink. The tax rate on liquor would have been raised to $6 per gallon from the current $1.50 per gallon. Additional taxes would have been assessed for beverages containing more than 50% alcohol. The tax rate for beer would also have risen to 36-cents per gallon from the current 9-cents per gallon. Wine taxes would have increased to $1.60 per gallon from the current 40-cents per gallon. These proposals did not pass.

Massachusetts: Enacted budget extends the state's sales tax to the retail purchase of beer, wine, and hard liquor. This measure is expected to generate $78.8 million in FY 2010.

Michigan: Governor has proposed doubling the annual liquor license fees that now range from $600 to $1,200. Governor has proposed enacting a fee for allowing bars to stay open extended hours.

Nevada: Lawmakers proposed, but did not pass, increasing the state's alcohol tax. Lawmakers proposed increasing the tax on a gallon of liquor from $3.66 to $7.87. Taxes on wine would have risen to $1.77 per gallon, compared with the current 70 cents. Taxes on a gallon of beer would have jumped to 69 cents per gallon, compared to 16 cents.

New Jersey: Lawmakers increased the tax per gallon of alcohol (except for beer) by 25%. The measure is expected to generate $22 million in FY 2010.

New York: Higher alcohol tax enacted. Tax on beer was increased 3-cents per gallon to a total of 14-cents per gallon. Tax on wine was increased 11-cents per gallon to a total of 30-cents per gallon. The alcohol tax increases are expected to generate $14 million.

North Carolina: Enacted budget increases alcohol taxes by 0.8 cents per can of beer and by 4 cents per bottle of wine.

Oregon: Lawmakers proposed increasing the beer tax by 1,900%. Currently the tax is 1-cent per gallon and lawmakers have proposed raising it to $1.60 per gallon. This measure was not enacted. The Oregon Liquor Control Commission imposed a temporary 50-cent tax surcharge on every bottle of liquor sold in the state.

Vermont: Legislature passed a budget that extends the state's 6% sales tax to include hard liquor. Beer and wine are already subject to the state's sales tax.

Washington: The Washington Liquor Control Board voted to increase the state markup on liquor by an average of $1 a liter. Beer and wine are exempt.