Is There a Tax on Wine? Federal, State, and Imports

Yes, there is a tax on wine, and usually more than one. Every bottle sold in the United States carries a federal excise tax built into its price, a state excise tax that varies enormously from one state to the next, and in most places a sales tax added at the register. On a standard 750 ml bottle of still wine at 16 percent alcohol or less, the federal piece alone is about 21 cents, though small wineries pay far less thanks to a credit. Add state and local taxes and the total on a typical bottle usually lands somewhere between roughly a dollar and two dollars, higher in restaurants and heavy-tax states.

The Federal Excise Tax

The federal government taxes all wine produced in or imported into the United States under 26 U.S.C. § 5041. The Alcohol and Tobacco Tax and Trade Bureau administers it, and the legal bill goes to the bonded producer or importer, not to you at the register.¹ By the time a bottle reaches the shelf, this tax is already folded into the wholesale cost.

Rates depend on alcohol content and whether the wine is still or sparkling. For still wine:

16 percent ABV or less: $1.07 per wine gallon
Over 16 through 21 percent ABV: $1.57 per wine gallon
Over 21 through 24 percent ABV: $3.15 per wine gallon

Anything above 24 percent alcohol is reclassified as a distilled spirit and taxed at the much higher spirits rate.²

Sparkling wine and champagne are taxed at a flat $3.40 per wine gallon. Artificially carbonated wines (those where carbonation was injected after production) pay $3.30 per gallon. Naturally sparkling wines made by the traditional method fall into the higher category.²

A wine gallon is a bit under five 750 ml bottles, so dividing any per-gallon rate by roughly five gives the per-bottle figure. That is how $1.07 per gallon becomes about 21 cents per bottle, and how the $3.40 sparkling rate translates to about 67 cents.

Why Small Wineries Pay Much Less

The Craft Beverage Modernization Act, made permanent in 2021, gives producers and qualifying importers a graduated credit against the base excise rate, applied per calendar year:

First 30,000 wine gallons: $1.00 per gallon credit
Next 100,000 wine gallons: $0.90 per gallon credit
Next 620,000 wine gallons: $0.535 per gallon credit

For a small winery making still wine at 16 percent ABV or less, that $1.00 credit against the $1.07 base rate leaves an effective federal tax of just seven cents per gallon on the first 30,000 gallons, a little over a penny per bottle.² A large producer shipping more than 750,000 gallons gets no credit and pays the full rate. Companies under common ownership are treated as a single taxpayer, so a conglomerate that owns multiple wine brands can’t stack separate credits across them.

State and Local Wine Taxes

Every state adds its own layer on top of the federal tax, and the variation is wide. State excise taxes on wine run from roughly 20 cents per gallon at the low end to over $2.00 per gallon at the high end, with a few outliers above that. Most states also apply their regular sales tax to wine, calculated as a percentage of the retail price and added at checkout.

About 17 states operate as “control states,” where the government manages some part of alcohol distribution. Not all of them control wine (some limit their monopoly to spirits). Where they do, revenue is generated through product markups rather than a visible per-gallon excise tax, so the tax burden is real but less transparent on the receipt.

Some states and localities add a further surcharge on wine sold for on-premise consumption. These can tack on another 6 to 8 percent or more beyond the standard sales tax, which is a large part of why the same bottle costs so much more at a restaurant than at a shop.

What It Adds Up to on a Bottle

Put the pieces together on a typical $15 bottle of still wine at 14 percent ABV from a large domestic producer:

Federal excise tax: about 21 cents per bottle (or roughly one cent if the producer is small enough to claim the full CBMA credit)
State excise tax: about 30 cents per bottle in a state charging $1.50 per gallon
Sales tax at 6 percent: about 90 cents

That works out to roughly $1.40 in total taxes on a $15 bottle. In a high-tax state, or at a restaurant with an on-premise surcharge, the total on the same bottle can easily clear $2.00. Sparkling wine starts higher because the federal rate alone is about 67 cents per bottle before any credits.

Imported Wine

Imported wine faces the same federal excise tax as domestic wine, plus a customs duty collected at the border. U.S. Customs and Border Protection collects both at entry.³

Under the 2026 Harmonized Tariff Schedule, still wine at 14 percent ABV or less in containers of two liters or smaller carries a duty of 6.3 cents per liter. Higher-alcohol still wine in the same container size pays 16.9 cents per liter, and sparkling wine pays 19.8 cents per liter regardless of container size. These rates apply to imports from countries with normal trade relations.⁴

Standard duties are only part of the picture right now. As of early 2026, a 10 percent ad valorem import duty under Section 122 applies to a wide range of goods including wine, and trade policy in this area has shifted quickly. Anyone importing commercially should check the current schedule before ordering.

Restaurants, Shops, and Direct Shipping

Where you buy a bottle changes what taxes you actually see and pay.

At a Store

Federal and state excise taxes are already inside the sticker price. Only sales tax appears as a separate line item on the receipt. Higher state excise taxes are one reason wine seems more expensive in some states even before sales tax hits.

At a Restaurant or Bar

Several states impose a mixed beverage or drink tax on alcohol served for on-site consumption that doesn’t apply to packaged sales. Buying an unopened bottle to go from a restaurant is typically subject only to normal sales tax; ordering the same bottle to drink there brings the on-premise surcharge into play.

Direct-to-Consumer Shipping

When you buy from a winery online, the shipping address determines the tax rules, not the winery’s location. Wineries holding a direct shipper permit must collect and remit both sales tax and state excise tax as if the sale had happened inside the destination state.⁵ Not every state allows direct shipment, and each state that does has its own permit and compliance rules.

Cider, Mead, and Fortified Wines

A few categories sit outside the standard still-wine rate and are worth knowing if you drink them.

Hard cider gets a much lower federal rate of 22.6 cents per wine gallon, roughly one-fifth of the standard still wine rate. To qualify it must be under 8.5 percent ABV, contain minimal carbonation, and be made primarily from apples or pears (over 50 percent by volume). Other fruits or fruit flavorings disqualify it; spices, honey, and hops are allowed.⁶ CBMA credits for cider are smaller in absolute terms (6.2, 5.6, and 3.3 cents across the three tiers) but bring the effective rate on small-producer cider close to nothing.

Mead is classified as wine for federal tax purposes and taxed at the standard $1.07 per gallon still-wine rate, as long as it stays under 8.5 percent ABV, contains no fruit or flavorings, and has minimal carbonation. There is no reduced mead-specific rate, but mead producers can claim the same CBMA credits as other wine producers.⁷

Fortified wines like port and sherry usually fall into the 16-to-21-percent ABV bracket at $1.57 per gallon. Wines pushed above 21 percent jump to $3.15, and anything over 24 percent is taxed as a distilled spirit rather than as wine.² Some states add their own premium on fortified wine on top of that.

1
TTB: Alcohol and Tobacco Tax and Trade Bureau. Quick Reference Guide to Wine Excise Tax
2
Office of the Law Revision Counsel. 26 USC 5041 – Imposition and Rate of Tax
3
eCFR. Subpart D – Tax On Imported Distilled Spirits, Wines, and Beer
4
Harmonized Tariff Schedule of the United States Revision 4 (2026). Chapter 22 – Beverages, Spirits and Vinegar Rates of Duty
5
California Legislative Information. California Code Business and Professions Code BPC Division 9 Chapter 4 – Section 23661.3
6
eCFR. Eligibility for the Hard Cider Tax Rate
7
TTB: Alcohol and Tobacco Tax and Trade Bureau. Tax Rates