Utah's Sin Tax: Alcohol Edition

Utah has some of the most restrictive alcohol laws in the United States. The state earns revenue from the sale of alcoholic beverages, and alcohol taxes are referred to as sin taxes. In March 2025, a bill was presented to raise the sin tax on alcohol purchases from a cost-plus 88.5% markup to 88.85% markup. Utah's excise tax on liquor is $12.18 per gallon, one of the highest liquor taxes in the country. The state also has a general sales tax of 4.85% on alcoholic beverages.

Alcohol excise taxes in Utah are among the highest in the US

The Utah excise tax on liquor is $12.18 per gallon, one of the highest liquor taxes in the country. The state's excise tax on spirits is ranked #8 out of all 50 states. The Utah liquor tax applies to all hard alcohol (excluding beer and wine) and is included in the purchase price by the retailer.

The Utah excise tax on beer is $0.41 per gallon, higher than 74% of the other 50 states. The state's beer excise tax is ranked #13 out of all 50 states. The Utah beer tax is already added to the purchase price of all beer bought in the state, regardless of whether it is in kegs, bottles, or cans.

The Utah excise tax on wine is $0.00 per gallon, one of the highest wine taxes in the country.

Utah is an "Alcoholic beverage control state", where the sale of liquor and spirits is state-controlled. Liquor sales are only permitted in state alcohol stores, also called "ABC Stores". The state earns revenue by selling alcoholic beverages, so there is no need to apply an additional excise tax on liquor. However, Utah's general sales tax of 4.85% also applies to the purchase of wine and liquor.

Utah's alcohol laws are some of the most restrictive in the United States. The state has a monopoly over the wholesaling and/or retailing of some or all categories of alcoholic beverages. The Utah Department of Alcoholic Beverage Services (UDABS) has regulated the sale of alcoholic beverages since 1935, two years after the end of Prohibition. The state's alcohol laws are influenced by the Church of Jesus Christ of Latter-day Saints, to which 55% of Utah residents belong. The church advises against the consumption of alcohol for its members.

Alcohol sales are only permitted in state-owned stores

Alcohol sales legislation in Utah is some of the most restrictive in the United States. The Utah Department of Alcoholic Beverage Services (UDABS) has regulated the sale of alcoholic beverages since 1935, two years after the end of Prohibition.

Utah is an "Alcoholic beverage control state", meaning the sale of liquor and spirits is state-controlled. Alcohol sales are only permitted in state-owned stores, also called "ABC Stores". The state earns revenue from selling alcoholic beverages, so there is no need to apply an additional excise tax on liquor. However, the price of all alcohol sold in Utah includes Federal alcohol excise taxes, which are generally passed on to the consumer in the beverage's price. Excise taxes on alcohol are implemented by every state, and in Utah, these are some of the highest in the country. For example, the Utah excise tax on liquor is $12.18 per gallon, and the tax on beer is $0.41 per gallon.

Utah is one of seventeen control states, meaning the state has a monopoly over the wholesaling and/or retailing of some or all categories of alcoholic beverages. Beer over 4% ABV is only available in State Liquor Stores and Package Agencies and at clubs and restaurants licensed to sell liquor.

The strict alcohol laws in Utah are largely due to the influence of the Church of Jesus Christ of Latter-day Saints, to which 55% of Utah residents belong. The Church advises against the consumption of alcohol for its members.

Utah's alcohol laws have been the subject of much debate in recent years, with some arguing that they are too restrictive and negatively impact the state's tourism and nightlife. In 2025, there were discussions around "proximity", which refers to how close a liquor licensee can be to a community location like a school, church, or park. Utah's strict laws on proximity have been a source of frustration for restaurants that are unable to serve alcohol due to their location, even if the nearby church, school, or city is fine with it.

In March 2025, there were also discussions around raising the "sin tax" on alcohol purchases from a cost-plus 88.5% markup to 88.85% markup. The money from the increased tax would be used to fund inmate education programs.

Alcohol tax revenue funds state programs

Alcohol excise taxes in Utah are implemented on wine, beer, and liquor (including most types of hard alcohol). These taxes are sometimes referred to as "sin taxes", which also include taxes on items deemed harmful, such as cigarettes, gambling, and drugs. The state of Utah earns revenue from the sale of alcoholic beverages in state-controlled stores, and this revenue contributes to various state programs.

Utah's general sales tax of 4.85% is applied to the purchase of alcoholic beverages. Additionally, Utah imposes excise taxes on alcohol, which are collected from the merchant and usually passed on to the consumer in the form of higher prices. The Utah excise tax on liquor is $12.18 per gallon, ranking among the highest liquor taxes in the country. The state's excise tax on beer is $0.41 per gallon, higher than 74% of the other states, and the tax on wine is $0.00 per gallon, one of the highest wine taxes nationwide.

The revenue generated from alcohol taxes and markups in Utah is utilised for various purposes. Under Utah law, a significant portion of the money must be returned to the state. For example, funds are allocated to the general fund, the school lunch program, the State Bureau of Investigation for liquor law enforcement, and education programs aimed at preventing underage drinking. Additionally, a portion of the revenue is kept by the Utah Department of Alcoholic Beverage Control (DABC) to cover operating costs.

The state has also used alcohol tax revenue to support specific initiatives. In 2017, an increase in markup on liquor sales was proposed, with the additional money designated for alcohol enforcement and prevention programs. More recently, a Senate bill included a provision to raise the "sin tax" on alcohol purchases, with the generated revenue intended to fund inmate education programs.

While revenue generation is a primary motivation for alcohol taxes, there is also a recognition that higher prices and taxes can contribute to reducing alcohol-related harm. William Kerr, a senior scientist at the Alcohol Research Center, stated that there is evidence linking increased taxes and prices to a decrease in deaths and injuries caused by alcohol overconsumption and underage drinking.

Alcohol laws in Utah are some of the most restrictive in the US

Utah is an "Alcoholic Beverage Control State", meaning the sale of liquor and spirits is state-controlled. Liquor sales are only permitted in state-owned alcohol stores, also called "ABC Stores". These stores are closed on Sundays and holidays and often close as early as 7 pm. The state earns revenue from these sales, so there is no additional excise tax on liquor. However, other alcoholic beverages like wine, beer, and liquor are subject to excise taxes on both the state and federal levels, which are passed on to the consumer in the form of raised alcohol prices.

Utah's alcohol laws have a long history of being strict and are regularly tweaked. In 2019, the state increased the permitted alcohol content in beers sold in grocery and convenience stores to 5% ABV, up from 4%. This change was significant as it expanded the variety of beers available in local stores. However, beer containing more than 5% ABV, as well as liquor and wine, can only be sold at state-controlled liquor stores. Additionally, Utah has strict ID requirements for purchasing alcohol, and all adults must be prepared to show valid identification when buying alcohol or entering a bar.

The state also has unique regulations for restaurants and bars. Until 2002, bars were called "private clubs", and patrons had to purchase a membership to enter. While this requirement was removed, restaurants and bars are still subject to specific rules. For example, restaurants must serve food with alcoholic beverages, and bars must display conspicuous signs stating, "This is a bar" and "No one under 21 is allowed." Furthermore, the famous Zion Curtain laws mandated that restaurants install partitions to separate bartenders preparing drinks from patrons' views, although these laws have been reformed in recent years.

In conclusion, Utah's alcohol laws are indeed some of the most restrictive in the US, with high taxes, strict ID requirements, limited purchasing options, and unique regulations for restaurants and bars. These laws reflect the state's complex relationship with alcohol, influenced by the predominant religion and the ongoing efforts to balance providing legal access to alcohol while respecting the beliefs of a significant portion of the population.

Alcohol tax rates vary based on the type of beverage

Alcohol tax rates do indeed vary based on the type of beverage. Taxes on alcoholic beverages are referred to as ""sin taxes", and they also include excise taxes on items like cigarettes, gambling, and drugs. In the US, alcohol sales are subject to taxation at the federal, state, and local levels. Federal excise taxes per "standard drink" (0.6 oz of ethanol) are estimated at $0.054 for beer, $0.042 for wine, and $0.127 for spirits.

In Utah, the state collects special excise taxes on the sale of all types of alcohol, specifically targeting wine, beer, and liquor. The Utah excise tax on beer is $0.41 per gallon, higher than 74% of the other 50 states. The tax on wine is $0.00 per gallon, one of the highest in the country. The Utah excise tax on liquor is $12.18 per gallon, also one of the highest in the country.

Utah's general sales tax of 4.85% also applies to the purchase of wine and liquor. In addition, federal alcohol excise taxes are generally passed on to the consumer in the beverage's price. Excise taxes are applied on a per-unit basis, usually per gallon for liquids, and are collected from the merchant who sells the alcohol. However, these taxes are typically passed on to the consumer in the form of raised alcohol prices.

The variation in tax rates across different beverages and locations can have various effects on demand, prices, and consumption patterns. For instance, beer has been found to have the least elastic demand, followed by wine, and then spirits. Additionally, taxes can influence producer and consumer behaviour, such as substitution towards non-taxed features or higher-quality, higher-priced brands.

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