It’s no secret that Americans enjoy their fair share of beer. Every year, U.S. consumers drink over 6 billion gallons of the stuff — the most of any alcohol category by a long shot. Despite the drink’s reputation as a casual, everyday pleasure, beer can still be pricey, but not necessarily for the reason one may think. Instead of ingredients and production costs serving as the main drivers behind beer’s sticker price, taxes actually add more to the final consumer cost than both raw materials and labor combined, according to tax policy nonprofit Tax Foundation.
In the U.S., the federal government collects an excise tax on fermented malt beverages that ranges from $0.11 to $0.58 per gallon depending on production, quantity, and the brewery’s location. Moreover, each state and Washington D.C. has its own beer excise tax, with rates ranging from just two cents per gallon to a whopping $1.29. And that’s before any municipal-level taxes and sales tax. Things add up quickly: A report from software platform Yumpu determined that various levels of taxation account for roughly 40 percent of beer’s retail price.
