Washington Tops U.S. Spirits Taxes

State taxes on distilled spirits vary sharply across the country, with Washington charging the highest excise tax and Wyoming and New Hampshire effectively charging none, according to an updated Tax Foundation map based on January 2026 data.

Washington levies $36.68 per gallon on distilled spirits sold off premises, far above every other state. Oregon ranks second at $23.74 per gallon, followed by Virginia at $23.47 and Alabama at $22.87. At the low end, Wyoming and New Hampshire both show an effective rate of $0.00 per gallon because they are control states that sell liquor through government-run systems rather than through a conventional excise tax. Missouri is next lowest at $2.00 per gallon.

The figures matter because distilled spirits remain the largest segment of the U.S. alcohol market by sales, with 42.4% of market share, slightly ahead of beer for the fourth straight year, the Tax Foundation said. The group said spirits sales have gained more than 13% in market share since 2000, helped by newer products such as ready-to-drink cocktails and hard seltzers that have blurred traditional tax categories.

The report said spirits generally face the heaviest tax burden among alcoholic beverages, even when adjusted for alcohol content. A standard shot of 40% alcohol spirits carries a higher tax burden than a standard beer serving with the same amount of alcohol, the group said.

The state-by-state differences are wide. In addition to Washington, Oregon and Virginia, other high-tax states include North Carolina at $18.23 per gallon, Utah at $16.07, Iowa at $15.14 and Michigan at $14.61. Several states cluster near the middle of the pack, including New York at $6.44, Florida at $6.50 and Texas at $2.40.

The Tax Foundation also noted changes from 2025 to 2026. Oregon’s spirits tax rose by $0.88 per gallon, moving it from fourth to second highest in the nation. Mississippi’s rate increased by $0.50 per gallon, while Arkansas’s rose by $0.29 per gallon. Washington’s rate fell by $0.30 per gallon but remained the highest in the country.

The organization said the patchwork reflects a complicated system in which states use different methods to tax spirits, including excise taxes, sales taxes tied to alcohol purchases, bottle fees and case fees, as well as markups in control states where governments oversee liquor sales directly. Some states also vary rates by alcohol content, container size or whether a drink is sold for on-premises or off-premises consumption.

Federal taxes add another layer. Spirits are subject to a tiered federal excise tax that starts at $2.70 per proof gallon for the first 100,000 gallons produced each calendar year, then rises to $13.34 per proof gallon for larger volumes up to 22.23 million gallons and to $13.50 beyond that threshold.

The Tax Foundation said these taxes are usually built into shelf prices rather than shown separately on receipts, which can make their effect less visible to consumers. It estimated that taxes and fees account for about half the price of a typical bottle of spirits.

The report also pointed to cross-border shopping incentives created by large tax gaps between neighboring states. It cited Washington residents buying about 8% of their spirits in Idaho, where taxes are lower even though Idaho still ranks among the higher-tax states nationally.

The group argued that states should consider moving away from categorical alcohol taxes toward a system based on actual alcohol content, saying that would be simpler and more neutral across beer, wine and spirits as new products continue to enter the market.