How Does Beer-Tax Affect You?
Posted:
Thursday, May 14th, 2009
Category:
Alcohol & Food Safety
Every state has different rules and regulations on the beer-tax. Every state has an excise tax that is based on a dollar amount per gallon, with Alaska ranking the highest at $1.07 per gallon as an excise tax. Fortunately for residents, there is no sales tax on beer or other taxes applied, which can offer a little relief. The U.S. average excise tax is about $0.18 per gallon, as of January 2008. That, of course, doesn’t include sales tax or other taxes that might be imposed by each different state within the U.S. So, how does the beer-tax affect you? It depends on your role in the alcoholic beverage and service industry.
As a business owner, you will have to either charge more for your alcohol so that you can pay your own taxes, or simply charge the taxes directly through to the customer to make sure that they’re taken care of. If you’re lucky enough to live in a state with a lower tax rate, it might not make as big of an impact on your sales and service when taxes are raised or sales slowdown. However, when you live in a state that has excise taxes in excess of $0.70, you might feel a little bit more of an impact from customers who cannot afford the enjoyment of a beverage all the time.
As the economy slows down, people begin spending less and less on wants and more on needs. Thus, alcoholic beverages become less and less popular. Alcohol isn’t a staple for daily life, and with all the taxes that people pay, they might find it quite easy to cut it from their budget. This directly impacts your business, but you can’t blame it all on the taxes. The economy certainly isn’t helping things, and while stress often causes more desire to have a drink and unwind, people don’t always have the money to spend like they once did.
In any likely scenario, small convenience stores, discount groceries where beer sales are permitted, and other locations with cheap prices on beer will be less affected by the recession than restaurants and bars that serve to patrons on-premises. Some states even have laws for an on-premise tax that businesses charge to customers, making the costs higher for those customers, and the loss greater for the establishment. No matter how the beer-tax affects you, trust that when the economy begins to rebound your business will as well, regardless of tax rates.
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