Beer tax bill sails through legislature, heads to Haslam

Tennessee

(AP Photo/Rob Carr)

NASHVILLE, Tenn. (AP) -- A proposal to freeze the state's beer tax is headed to the governor for his consideration.

The measure was approved 87-2 in the House on Wednesday. The Senate approved it 30-1 earlier this week.

Tennessee's beer taxes outstrip any other state's because the bulk of the levy is based on price rather than volume. The more a beer costs, the higher the taxes that must be paid to buy it.

In Tennessee, brewers pay federal and state taxes per 31-gallon barrel, and then a 17 percent tax is charged to wholesalers based on price. Consumers then pay as much as 9.75 percent in sales taxes on top of the previous charges.

The proposal would convert the 17 percent tax to a flat tax in line with the current rate.


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