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By Dana Tims January 24, 2014

Does Oregon have the lowest beer tax in the nation?

After the decision by Washington voters last year to privatize the sale of liquor, Oregon legislators are now wrestling with whether to follow suit.

While no decision is likely during February’s monthlong legislative session, issues surrounding alcoholic beverages are very much on the table in Salem these days.

At a recent work session on the topic, Sen. Rod Monroe, D-Portland, noted that prices climbed dramatically in Washington after voters there allowed large retailers such as Costco to sell distilled spirits. He said Oregon should be cautious in making big changes and observed that if more money is the goal, expanding the number of state-owned liquor stores would provide one solution.

Then he added: "If our concern is revenue, we ought to look at the fact that we have the lowest beer tax in the nation."

While this may be welcome news, coming right before next weekend’s Super Bowl, we wondered if that’s true. Does Oregon have the lowest beer tax in the country? PolitiFact Oregon checked.

We called Scott Drenkard, an economist with the Tax Foundation, a nonpartisan tax research group in Washington, D.C. Its website includes a weekly map of the United States showing beer tax rates in all 50 states and the District of Columbia.

Drenkard, noting that the statistics are drawn from another group, the Distilled Spirits Council of the United States, said Oregon ranks 45th nationally with consumers paying a tax rate of 8 cents a gallon of beer. That comes out to just under 4 cents tacked on to the price of a six-pack.

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The rate puts Oregon behind only Colorado, Pennsylvania, Wisconsin, Missouri and Wyoming, which has a 2 cent-a-gallon beer tax.

Tennessee, by contrast, ranks first at $1.17 per gallon. Alaska’s $1.07 is second.

Monroe, contacted via email for a response, wrote: "If you add in the sales tax, Oregon has the lowest. The states that are lower than Oregon have a sales tax. When you add the sales tax to the beer tax the total is higher than Oregon."

According to the Federation of Tax Administrators, a Washington, D.C., tax-research group, Monroe is correct when it comes to sales taxes. Oregon is one of nine states that does not have a sales tax.

However, general sales taxes apply to most retail items, not just beer. We called Drenkard back to get his thoughts.

"Sales taxes do affect the price of beer, but it’s not a beer-specific tax," he said, noting that 20 states do impose additional taxes pertaining specifically to malted beverages. "Then again, corporate taxes also affect the price of goods, including beer. Should we add those in as well? Where do you draw a line?"

Oregon, according to a national group that tracks beer taxes, has one of the lowest such rates in the county. The 8-cents-a-gallon rate -- sixth-lowest nationally -- has remained unchanged since 1978.

But Monroe claimed that Oregon has the lowest beer tax in the U.S. Later, he tried to justify that assertion by saying it’s the lowest if Oregon’s lack of a sales tax is taken into account. He didn’t make that specification in his original statement, though, and sales taxes aren’t specific to beer. We rate his claim False.

Our Sources

Email exchanges with Sen. Rod Monroe, D-Portland, Jan. 21/22, 2014.

Telephone interview with Scott Drenkard, economist, Tax Foundation, Jan. 22, 2014.

Federation of Tax Administrators website, Jan. 22, 2014.

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