Taxes for Some More than Others: Excise Taxes

In the U.S., national excise taxes are placed on fuels, tobacco, alcohol, tires, airline tickets, telephone calls, firearms, Tanning Salons, coal, heavy trucks, vaccines, ship voyages and air cargo. Some of these go toward services related to the industry, for example the TSA for airline tickets. Others go to the general fund. States have their own excise taxes, often on the same products. Taxes on gambling exist, for example the lottery tax. Additionally, excise taxes on sugar, pornography, prostitution and even on “bad” food have been proposed. These are on top of regular sales tax.

The Federal excise tax on cigarettes is $1.01 per pack. The average state tax on cigarettes is $1.25 per pack. The Federal tax on beer is $0.58 per gallon, wine is $1.07 per gallon, and spirits is $13.50 per 100-proof gallon. The national average state beer tax is $0.278 per gallon, wine averages $0.79 per gallon and liquor averages $3.75 per gallon.

So the average pack of cigarettes costs $5.95 including statewide sales tax, and out of that $2.26 is excise tax. So, on average, a person has to pay an additional 38% to buy cigarettes compared to regular goods. A gallon of 100 proof will cost you an extra $17.47 in taxes. You might as well buy top shelf if you’re shelling out that cash regardless.

The United States Federal Government collected $15.9 billion in domestic tobacco excise taxes. They collected another $3.667 Billion in domestic distilled spirit excise taxes, 3.186 for beer and $621 million for wine.

In FY 2011, Georgia collected $228,858,070 in Tobacco excise taxes and $161,803,418 in alcoholic beverage taxes. These go to the General Fund. Additionally, for FY 2012, Georgia will receive $138,472,267 from the tobacco Master Settlement Agreement. The funds will be distributed as such:

  • Low-Income Medicaid: $102,193,257
  • Mental Retardation Waiver Program: $10,255,138
  • Georgia Cancer Coalition: $7,668,946
  • Cancer Treatment for Los-Income Uninsured: $6,613,249
  • Elder Community Living and Support Services: $6,191,806
  • Smoking Prevention and Cessation: $5,152,439
  • Underage Smoking Compliance: $150,000
  • Cancer Registry: $115,637
  • Public Health Administration: $131,795

Additional Resources

State Alcohol Taxes: http://cspinet.org/new/pdf/state_rank–jan_2009.pdf

State Cigarette Taxes: http://www.tobaccofreekids.org/research/factsheets/pdf/0097.pdf

Federal Alcohol Taxes: http://www.tobaccofreekids.org/research/factsheets/pdf/0097.pdffgt

Federation of Tax Administrators State Cigarette Taxes: http://www.taxadmin.org/fta/rate/cigarette.pdf

Federation of Tax Administrators State Distilled Spirits Taxes: http://www.taxadmin.org/fta/rate/liquor.pdf

Federal Excise Tax Revenue: http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=74&Topic2id=80

State Tobacco Tax Revenue: http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=403

State Alcohol Tax Revenue: http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=399

Georgia Budget & Policy Institute: http://gbpi.org/wp-content/uploads/2011/08/20110825.pdf

Georgia Governors Budget Report FY2012: http://opb.georgia.gov/vgn/images/portal/cit_1210/23/26/180289834State%20of%20Georgia%20Budget%20Report%20FY%202013%20-%20Jan%2011%20A.pdf

 

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