Washington State Liquor Taxes
Today is a marvelous day in the state of Washington. The state no longer controls liquor distribution. That means that we can now buy liquor in grocery stores, Costco, etc. I’m not going to get into the drama surrounding vote last year (yes, I voted for it), but I do want to explain the taxes you’ll see on your bill.
We’ll use a bill from the delicious Woodinville Whiskey Company as an example. At the bottom it mentions the following taxes:
- $13.50/gallon federal excise liquor tax
- $3.77/liter WA liquor tax
- $20.5% WA liquor tax
- 17% WA retail fee (mandated by I-1183)
Lines 1 through 3 are taxes that you were paying under the old system too. They continue unchanged now. But what about line 4? I thought 1183 was supposed to give me cheaper booze?
It will. What isn’t listed mentioned on the receipt is that the 50-65% markup that Washington used to build into liquor prices is now gone. Instead retailers have to pay a 17% fee on every dollar of liquor they sell so obviously most retailers will pass this cost directly to customers though you might not always see it itemized on your bill. Now that we have a mostly free market system, we can expect to see less of a markup on liquor as businesses compete for your dollars.
We’re still paying a ton of money to Washington and Uncle Sam but at least I can buy rum with my tater tots at Safeway!
[UPDATE] It looks like the Washington State Liquor Board tried to lock down their price list site, but they didn’t do a very good job. I was able to snag the full the full price list in an Excel file so that you can do your own comparisons. It’s still unclear to me how many taxes are included in the price listed on shelves now and how many will be added at checkout. Time to experiment!