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  1. #1
    Enthusiast
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    Feb 2013
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    PacNW
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    318

    Bourbon and your state taxes

    It's not uncommon for the price of a bottle to be used as a qualifier to why a bourbon or other whisky is considered different or better (value) than another, and it's commonly used as the primary reason why otherwise good or great bourbon is passed up on store shelves.

    I'm curious if we recognize how wide the retail price gap is between the same bottle of bourbon that shows up in Texas, Virginia or California due to alcohol or other "sin" taxes on distilled spirits.

    Let's start by using a standard, commonly available bottle as an example; Maker's Mark, which is distributed nationwide almost exclusively by Southern as far as I can tell. It's not uncommon for a producer and distributor to have what amounts to be a national contract price (though it's technically illegal) so let's assume a 750ml bottle of MM is purchased by every state distributor for $10.

    I am only familiar with my state, Washington, so I will show what a bottle of $10 product arriving into the state ends up costing at retail. Be prepared for four state taxes/fees in addition to the commercial markups.

    The distributor pays a 10% state license fee on all product they purchase.
    $10.00 becomes
    $11.00

    The distributor marks up their product 20% to 40%.
    $11.00 becomes
    $13.20/$15.40

    The retailer pays a 17% state liquor control board license fee on all product they purchase.
    $13.20/$15.40 becomes
    $15.44/$18.02

    The retailer marks up their product 30% to 50%.
    $15.44/$18.02 becomes
    $20.07/$27.03 ** this is the price on a shelf tag **

    The consumer pays a 20.5% state sales tax.
    $20.07/$27.03 becomes
    $24.18/$32.57

    The consumer pays a state liter tax of $3.77 per liter ($2.83 on a 750ml).
    $24.18/$32.57 becomes
    $27.01/$35.40 ** this is the price we pay **

    These are quite accurate totals based on prices I see around town for the lowest cost (big box beverage or Costco) to the highest (small independent liquor store). It gets pretty outrageous with higher priced products too. One of my favorite small stores offered me a bottle of PHC 7th at their best non-gouging price, but it was still $155 out the door.

    Anyone else care to share how your state would tax that same bottle of MM?

  2. #2
    Connoisseur
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    Sep 2012
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    Markham, ONT
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    514

    Re: Bourbon and your state taxes

    Quote Originally Posted by DBM View Post
    $20.07/$27.03 ** this is the price on a shelf tag **

    $27.01/$35.40 ** this is the price we pay **
    That is a big jump from price tag to actual cost. Each time prices are mentioned throughout SB I always wonder if people are quoting the former or latter?
    (Here in Ontario, the state monopoly includes all the taxes on the shelf price tag.)
    "Old guys tend to say it like it is." squire

  3. #3
    Virtuoso
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    Jun 2012
    Location
    Louisville, ky
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    1,199

    Re: Bourbon and your state taxes

    Quote Originally Posted by portwood View Post
    That is a big jump from price tag to actual cost. Each time prices are mentioned throughout SB I always wonder if people are quoting the former or latter?
    (Here in Ontario, the state monopoly includes all the taxes on the shelf price tag.)
    Washington state is an extreme example of spirits tax from sticker to final price. I assumed most states bury everything except traditional sales tax in what is shown on the shelf.

  4. #4
    Advanced Taster
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    Aug 2013
    Location
    South Jersey/PHL
    Posts
    132

    Re: Bourbon and your state taxes

    I always quote the shelf sticker price. Sales tax here is 7%. It's a couple bucks on a typical bottle. If our tax was 20%, I'd think about the price a lot differently and probably quote the OTD price.

  5. #5
    Connoisseur
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    Apr 2011
    Location
    Toledo, OH
    Posts
    857

    Re: Bourbon and your state taxes

    Ohio is a control state where the taxes are buried in the shelf price--which is the OTD price. I have been burned a few times in other states when what looked like a really good price was negated by taxes added at the check out counter. Carpe diem--which is Latin for buyer beware.
    If God made anything better than bourbon he must have kept it for Hisself.

  6. #6
    Guru
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    Dec 2012
    Location
    Houston
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    2,500

    Re: Bourbon and your state taxes

    Sales tax in TX is 8.25% and that's all we pay on liquor. I always quote the shelf price which does not include taxes.
    I've never tried GTS with any sort of soda. Maybe I'm missing out; but I'm OK with that.

  7. #7
    Trippah and Admin
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    Feb 2008
    Location
    Northeast Ahia
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    4,767

    Re: Bourbon and your state taxes

    Carpe diem is seize the day.

    Caveat emptor is what you were looking for.

    I haven't had a chance to look up the Ohio price before local taxes on the state list, but I will when I have a few so that we can compare.
    My name is Joel Goodson. I deal in human fulfillment.
    I grossed over eight thousand dollars in one night. Time of your life, huh kid?

  8. #8
    Connoisseur
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    Apr 2011
    Location
    Toledo, OH
    Posts
    857

    Re: Bourbon and your state taxes

    Quote Originally Posted by callmeox View Post
    Carpe diem is seize the day.

    Caveat emptor is what you were looking for.
    .
    Are you sure? I heard a waiter say that carpe diem also means the fish of the day. Either way, de gustibus non disputatum est--even if it tastes fishy. If I eat too much catfish with hushpuppies, that's Gallia omnis est in partes tres divisa--all of my gall bladder is divided in three parts.
    If God made anything better than bourbon he must have kept it for Hisself.

  9. #9
    Connoisseur
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    Dec 2011
    Location
    Ball Ground, GA
    Posts
    611

    Re: Bourbon and your state taxes

    Quote Originally Posted by Flyfish View Post
    Are you sure? I heard a waiter say that carpe diem also means the fish of the day. Either way, de gustibus non disputatum est--even if it tastes fishy. If I eat too much catfish with hushpuppies, that's Gallia omnis est in partes tres divisa--all of my gall bladder is divided in three parts.
    Nice recovery, blame the fish.
    Josh

  10. #10
    Guru
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    May 2013
    Location
    Louisville, KY
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    2,477

    Re: Bourbon and your state taxes

    Quote Originally Posted by Flyfish View Post
    Are you sure? I heard a waiter say that carpe diem also means the fish of the day.

    nice save!...........

 

 

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