Washington State is Number 1! For liquor taxes…

Washington State has the highest liquor taxes in the nation! Washington residents, as the end purchaser, pay the following taxes on liquor (either directly, or as price markup for taxes paid by distributors and retailers):

• 20.5% sales tax on spirits,
• + a $3.77 per liter excise tax,
• + 17% of gross revenues of retailer (termed a "license fee")
• + 10% of gross revenues of distributors.

According to the Tax Foundation, this results in the highest liquor taxes in the nation, with some taxes approaching 100% of the sale price of some products. The Tax Foundation calculates Washington's state taxes on spirits at a $35.22 per gallon, whereas Idaho is $10.92 and Oregon $22.73 per gallon. The national median liquor tax is $5.53 per gallon.

All info from an excellent piece at the Tax Foundation.

Not surprisingly, this has resulted in Washington residents purchasing liquor in Idaho and Oregon. In response, there has recently been a bill introduced in the legislature to reduce the Washington sales tax from 20.5% to 6.5% over 8 years. Certainly this is a step in the right direction.