It’s IPA Day and as beer-lovers rush to the store to celebrate, some may find one ingredient too pricey to swallow. It’s not the hops or the yeast, but taxes! Think about that again. The most expensive ingredient in beer is taxes!  On average, more than 40 percent of the cost of beer comes from federal, state and local taxes. This tax burden borne by beer drinkers is almost 70 percent higher than for the average purchase in the U.S.

Federal excise taxes are levied at a $7 tax on each of the first 60,000 barrels. And for businesses who produce more than 2 million barrels a year (110 million six-packs), they must pay an $18 tax on every barrel produced.

On top of the $7 or $18 per barrel federal excise tax, states also levy taxes on beer. Each state uses a different formula to determine how much of a tax they want to levy on beer-drinkers, ranging from case or bottle fees to additional sales taxes. Regardless of the formula, beer-lovers across the nation face taxes yet again when just trying to enjoy a nice cold brew. Coming in at # 1, Tennessee has the highest beer tax at a steep $1.29 per gallon, whereas Wyoming’s $0.02 per gallon rate is the lowest among states.

See the map below for each state’s tax:

According to the Beer Institute, when taxes levied on production, distribution, and retailing of beer are added up, they account for more than 40% of the retail price. Low-balling the all-in-all beer tax bite at 40 percent, a beer-lover who pays $26.25 at the register for a 12-pack of Goose Island IPA might be surprised to know that over $10 dollars of that cost was taxes. Try swallowing that fact.