The Tax Bite
on Everyday Products….BEER

This April, after you finish doing your income taxes and send them off to the IRS, you may want to have a drink. So you may drive down to the local convenience store to pick up a bottle of beer. What you probably don’t realize is how much you are paying in taxes again when you buy the beer.

The average bottle of beer costs 77 cents. Of that, 15 cents, or about 20 %, goes to state and federal sales and excise sales taxes. Both state and federal governments impose special excise taxes on beer, in addition to standard sales taxes.

But that is only the beginning. Out of what the consumer pays for beer, the beer producer must pay federal income taxes, state income taxes, federal payroll taxes, unemployment insurance taxes, workmen’s compensation taxes, state franchise taxes, local property taxes and any local income taxes. Out of the remaining 62 cents that goes to the beer producer after state and federal sales taxes, the producer pays 18 cents, or about 25 percent of his total sales price, for these taxes.

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