Due to differences in alcohol content, states tend to tax wine at a higher rate than beer but at a lower rate than distilled spirits.
When taxes are levied at the production, wholesale, or retail level, vendors ultimately pass along the cost of these taxes to consumers in the form of higher prices.
Most states use a licensing system to regulate the sale of alcoholic beverages, but some states—known as “control” states—impose a government monopoly on the wholesale or retail of beer, wine, spirits, or all alcoholic beverages.
Kentucky has the highest wine excise tax rate at $3.47 per gallon, followed by Alaska ($2.50), Florida ($2.25), Iowa ($1.75), and Alabama and New Mexico (tied at $1.70).
The lowest wine tax rates are found in California and Texas ($0.20), Wisconsin ($0.25), and Kansas and New York ($0.30).
Our thanks to Ray Kasey for bringing this matter to our attention.