A lot of different factors go into the price of a bottle of distilled spirits. The type of alcohol is one factor, aging is another.
But what makes a bottle of Scotch more expensive in one state than another is the state tax on alcohol. From the highest to the lowest, the state alcohol tax can make a big difference in the retail price.
According to the Tax Foundation, distilled spirits are taxed at the highest rates of all alcoholic beverages. The tax rates are based on a combination of greater alcohol content in spirits than wine or beer and higher tax rates applied on alcohol content with spirits.
As an example, the Tax Foundation notes that a one-ounce shot of a spirit with 40% alcohol content (0.4 oz of alcohol) carries greater taxes than a 12-ounce beer with 4.8% alcohol content (0.4 oz of alcohol).
Using data from the Distilled Spirits Council of the United States (DISCUS), the Tax Foundation ranks states for their tax on alcohol. The tax is based on a gallon of spirits, so to determine the additional cost of a 750-milliliter bottle, divide the tax by five.
The states with the highest tax on alcohol:
State Tax per gallon
| Washington state | $36.55 |
| Oregon | $22.86 |
| Virginia | $22.06 |
| Alabama | $21.69 |
| North Carolina | $16.40 |
| Utah | $15.92 |
| Iowa | $14.10 |
| Michigan | $13.57 |
| Alaska | $12.80 |
| Idaho | $12.15 |
The states with the lowest tax on alcohol:
State Tax per gallon
| Missouri | $2.00 |
| Colorado | $2.28 |
| Texas | $2.40 |
| Kansas | $2.50 |
| Indiana | $2.68 |
| Arizona | $3.00 |
| Louisiana | $3.03 |
| Wisconsin | $3.25 |
| California | $3.30 |
| Nevada | $3.60 |
In addition to the state tax, consumers also pay a federal excise tax on distilled spirits but in a less straightforward way. According to the Tax Foundation, spirits are subject to a tiered tax system.
Federal rates are $2.70 per proof gallon on the first 100,000 gallons per calendar year, $13.34/proof gallon for more than 100,000 gallons but less than 22.23 million and $13.50/proof gallon for more than 22.23 million gallons.