PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

How Much Will Taxes Add to the Costs of July 4th Fun?

By at 30 June, 2019, 9:11 am

by Raymond J. Keating-

Summer is in full swing, and Independence Day – July Fourth – is fast approaching. For many, this means the chance to host parties and/or get-togethers with friends. And yes, there might be adult beverages involved.

Unfortunately, since government extends its reach pretty much everywhere, the tab for that July 4th party will climb higher due to taxes on those beverages. Just how much government will take out of the party budget depends on where you live.

The Tax Foundation serves up the important information.

On wine taxes, the Tax Foundation’s Janelle Cammenga reported:

“You’ll find the highest wine excise taxes in Kentucky at $3.26 per gallon. This rate fell slightly from last year’s $3.47, thanks to a drop in the wholesale rate from 10.25% to 10% in June of 2018. However, the Bluegrass State has a long way to go before it drops below Alaska’s second-place spot of $2.50 per gallon. Those two states are followed by Florida ($2.25), Iowa ($1.75), and Alabama and New Mexico (tied at $1.70). On the other end of the spectrum, the lowest excise taxes can be found in California and Texas ($0.20), followed by Wisconsin ($0.25), and Kansas and New York ($0.30).”

The following map serves up wine taxes across the nation.

Well, here’s a tax with which high-tax states California and New York fail to abuse taxpayers. Unfortunately, both states enormous overall tax burdens make it difficult to live, work and own a business in those two states – diminishing the fun at any party. (See SBE Council’s “Small Business Policy Index 2019: Ranking the States on Policy Measures and Costs Impacting Entrepreneurship and Small Business Growth.”)

As for distilled spirits – beverages with higher alcohol content – Cammenga noted:

“Washington State by far leads the states with an excise tax rate on distilled spirits of $32.52 per gallon. The Evergreen State is followed by Oregon ($21.98), Virginia ($19.93), Alabama ($19.15), and Utah ($15.96). Spirits are taxed the least in Wyoming and New Hampshire. These two control states gain revenue directly from alcohol sales through government-run stores and have set prices low enough that they are comparable to buying spirits without taxes. Missouri taxes are the next lightest at $2.00 a gallon, followed by Colorado ($2.28), Texas ($2.40), and Kansas ($2.50).”

Again, see what your state’s tax is in the following Tax Foundation map.

Finally, what about a cold beer? Cammenga reported:

“Rates vary widely by state: as low as $0.02 per gallon in Wyoming and as high as $1.29 per gallon in Tennessee. Missouri and Wyoming tie for second lowest at $0.06 per gallon, and Alaska sits at the second highest with its $1.07 per gallon tax.”

She also noted the significance on taxes when purchasing a brew:

“According to the Beer Institute, “Taxes are the single most expensive ingredient in beer, costing more than the labor and raw materials combined.” Research has shown that approximately 40 percent of the retail price of beer is dedicated toward covering all the applicable taxes.”

Again, check out your state below.

Whether it’s work or relaxation, the greedy hand of government is ready to take what it can. It taxes working, saving, investing, starting up and running a business, and consumption – including having a couple of drinks to celebrate summer and Independence Day.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

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