In the U.S., taxes account for a higher percentage of the cost of beer than ingredients, labor, and other materials combined. It’s a result of levies collected by several parties. A federal excise tax ranges from $0.11 to $0.58 per gallon of fermented malt beverages based on production, quantity and brewery location. Each state and Washington D.C. also imposes individual excise taxes on beer, and, from there, municipal-level levies and retail sales taxes drive the price up.
Tennessee continued to impose the highest tax on beer in 2025 at $1.29 per gallon, according to data from the tax policy nonprofit Tax Foundation. Alaska and Hawaii recorded the second- and third-highest taxes per gallon at $1.07 and $0.93, respectively, landing them in the same spots as in last year’s report.
