October 23, 2017  Last Update: December 21, 2016, 11:10 pm

$35 per Gallon Tax on Alcohol

Washington State was the first state to privatize alcohol sales completely, and is now also the state with the highest alcohol tax in the nation: $35 per gallon.

Washington State was the first state to privatize alcohol sales completely, and is now also the state with the highest alcohol tax in the nation: $35 per gallon.

Washington State was the first state to fully privatize the manufacturer, distribution, and sale of alcohol. And Washington State now enjoys the highest taxes on consumer alcohol purchases in the United States: nearly $35 per gallon. The next highest state (Oregon) taxes alcohol a full third less, at around $23 per gallon.

In 2012 Washington State voters’ Initiative 1183 put the state-run alcohol distribution to a vote. Voters approved the measure to privatize alcohol, but almost every man-on-the-street poll showed Washingtonians did not fully understand the details of that initiative. Built in was an additional tax that continued to impose a tax equivalent to the previous overhead of the state run system, even after the state was out of the business. The complicated tax structure was difficult to understand. For months after the law changed, even store managers didn’t know how to price and ring up alcohol purchases.

Studies of the subsequent year of private sales show DUI arrests down, DUI accidents down, and taxes way up. But police budgets also changed dramatically, as well as severe DUI rules imposing ignition locks, and numerous other factors which could account for variations in DUI charges and accidents.

The only thing certain so far is consumers in Washington State are paying a lot more for alcohol than drinkers in any other state of the union.

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Washington State residents pay $35 per gallon in taxes on alcohol, the highest in the US by far
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  1. […] Washington State was the first state to completely privatize the distribution and sale of alcohol, and Washington consumers are paying the price: nearly $35 per gallon in taxes at check out. […]

  2. […] In some states, it’s now legal to deliver alcohol on-demand and new tech startups are creating apps that make it easy. Alcohol delivery service is already big business in Seattle… the largest city in the state that collects more than $35 of tax revenue on every gallon of alcohol sold. […]

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