E-Malt.com News article: USA, AL: Alabama beer tax is second highest in USA

Many beer fans may not realize it, but Alabama's taxes on beer are higher than every state but one, according to an analysis by the Tax Foundation, Al.com reported on March, 10.

According to a map created by the Washington, D.C.-based organization, Alabama's beer excise tax of $1.05 per gallon is only 2 cents behind Alaska's, which is the nation's highest levy on beer. Georgia's beer tax of $1.01 per gallon has the third place spot.

The majority of states have beer taxes that are below 45 cents per gallon, according to the Tax Foundation's map, which is based on data from the Distilled Spirits Council of the United States as of Sept. 1, 2011.

The state with the lowest beer excise tax - a levy paid on certain goods purchased - is Wyoming, with a rate of 2 cents.

Scott Drenkard, an economist with The Tax Foundation, said one issue states should be concerned with is whether their beer drinkers are hopping across state lines to buy cheaper brew. For example, if someone buys beer in Tennessee they pay just 14 cents per gallon. If lots of people are doing that, Alabama could be losing out on tax revenue, he said.

"There is little evidence to show that increased taxation on beer is going to lead to less of an inebriated state," Drenkard said. "In general, you maybe actually see the opposite, as consumers could switch to hard liquor."

The Alabama Beverage Control Board collected $49.8 mln in beer taxes in 2009-10, according to an annual report on the organization's website. The ABC said $22.2 mln of that amount went to the Education Trust Fund, while the general fund and the state Department of Human Resources split the rest.

Meanwhile, there doesn't appear to be any movement to lower beer tax rates in Alabama.

Stuart Carter, a former president of Free the Hops who is now on the grassroots beer advocacy group's board, said beer taxation is more of an industry issue than it is a consumer one.

"There's a good phrase: Do we have a dog in this fight? When it comes to rates of taxation, no, we don't," Carter said.

Because Free the Hops is a consumer advocate - one of its recent causes is pushing legislation that would raise the maximum size of beer containers in the state to 25.4 ounces - it doesn't push deeply into industry problems. But Carter said the group would be in favor of legislation that would lower the excise tax.


14 March, 2012