15 Fun Facts About Beer And Taxes On National Beer Day

April 7 marks the day that beer was allowed to be legally manufactured and sold following a long, dry Prohibition. On March 22, 1933, President Franklin Roosevelt signed the Cullen–Harrison Act into law, which moved the US away from Prohibition by allowing the manufacture and sale of beer that was approximately 4% alcohol by volume (just a little less than the average today) and some wines. After he signed, Roosevelt reportedly remarked to his aide Louis Howe, “I think this would be a good time for a beer.”

Prohibition would officially remain in place for a few more months, but the ability to drink beer and wine was worth cheering. Here are a few more facts about beer—and its close relationship to tax—to help you celebrate in 2023:

1. Egypt was likely the first civilization to tax beer. Queen Cleopatra put a tax on beer—the people’s drink—allegedly to curb public drunkenness as a kind of “sin tax.” In keeping with similar tax policies, it was believed that the tax was actually used to raise money to build up her navy.
2. Beer is the most popular alcoholic beverage in the United States—though the lead isn’t as big as it used to be. 35% of those who answered a recent Gallup poll preferred beer, compared to 31% who preferred wine and 30% who favored liquor (3% have no preference). However, because of the way that the US government taxes alcohol, the feds collect more money from liquor sales than beer sales.
3. To help pay for the US Civil War, Congress imposed an excise tax on beer. The Revenue Act of 1862, signed into law by President Lincoln, included a tax on “all beer, lager beer, ale, porter, and other similar fermented liquors, by whatever name such liquors may be called.” This was particularly lucrative in the mid-19th century as Germans arriving in the US opened breweries. It may not have been popular then—or now—but taxing beer is a revenue raiser, generating billions each year.
4. German beers are often labeled “Gebraut nach dem Bayerischen Reinheitsgebot von 1516,” which translates roughly to “brewed according to the Bavarian Purity Law of 1516.” The law initially limited the ingredients that could be used to make beer in Germany (barley malt, hops, yeast, and water) and allowed the government to tax beer. The Reinheitsgebot became an official part of the German tax code in 1919 but was largely gutted when Germany became part of the European Union.
5. 99% of all beer cans and 97% of all soft drink cans are made of aluminum. The section 232 tariffs on steel and aluminum, signed into law in 2018 under the Trump administration and continuing under the Biden administration, have generated over $1.9 billion. Only a fraction of that money, about 7% or $126 million, has gone to the US government. The rest, according to research conducted on behalf of the Beer Institute by HARBOR Aluminum, has gone to US rolling mills and US and Canadian smelters mills, who charge end-users – such as US brewers – a tariff-burdened price regardless of whether the metal was meant to be tariffed based on its content or origin.
6. Based on data from 2020, the beer industry in the United States generated nearly 2.04 million jobs and an economic impact of over $331.8 billion. According to Beer Serves America, taxes paid by the beer industry and its employees and consumer taxes generated by the sale of malt beverage products totaled nearly $55.2 billion in tax revenues. This equals 40% of the retail price paid for these products by consumers.
7. Rates vary widely when it comes to state beer excise tax rates—as low as $0.02 per gallon in Wyoming and as high as $1.29 per gallon in Tennessee in 2022. Missouri and Wisconsin tie for second lowest at $0.06 per gallon, and Alaska is second highest with its $1.07 per gallon tax.
8. In 2019, state and local governments collected $7.7 billion in alcohol taxes or 0.2% of general revenue. In no state did combined state and local alcohol tax collections account for more than 1% of general revenue.
9. Once upon a time, beer cans were made in three pieces—the body (from a flat sheet) and two ends. Now, most beer cans are two-piece cans to keep it light. Beer distributors prefer lightweight cans since they are easier to pack and ship. Shipping costs for beer are often based on weight, while most taxes on beer are based on volume.
10. While general sales taxes are tacked on after the price of goods is subtotaled, most states go straight to the retailer for beer excise taxes, collecting according to the quantity of beer sold usually expressed as a rate of dollars per gallon. Although you can’t see the taxes on your receipt, vendors pass those costs to consumers through higher prices. One exception, according to the Beer Institute, are those aluminum tariffs—brewers have largely been absorbing those costs.
11. According to the Brewers Association of Australia, the three countries in the world with the highest beer tax rates are Norway, Japan, and Finland.
12. Arthur Guinness II—the father of Guinness stout—changed his family’s beer recipe to include unmalted roasted barley instead of black malt. The unmalted barley wasn’t subject to extra taxes, making it affordable for the Guinness family and the beer’s taste distinctive. By the end of the 19th century, Guinness was the largest brewery in Europe.
13. In Canada, children’s breakfast cereal makers get a tax break if their cereals contain free toys—so long as the toys are not “beer, liquor, or wine.”
14. Qatar taxed alcohol heavily during the 2022 World Cup, nearly doubling the price. Months later, Dubai, the most populous city in the United Arab Emirates, suspended its 30% tax on alcohol, along with the fee for a license that individuals need to buy alcohol. The move was viewed as a step towards helping the UAE compete with its neighbors, including Qatar and Saudi Arabia, to attract more tourists and businesses.
15. Cenosillicaphobia is the fear of an empty beer glass. Okay, that’s not a tax fact, just a fact. Don’t live in fear–go, get a beer.