Liquor

Calculating the Effects of Tax Changes on Consumption and Revenue

LIQUOR

Current volume consumed: gallons

Do not include commas

Click here to find the volume of alcohol sold in your state in 2001.

Current revenue: $ Do not include commas

Check with your state's Department of Revenue, Alcohol Beverage Control Board, Liquor Board, or state legislative revenue committee.

Current excise tax rate: $ per gallon

State Excise Tax Rates

Current retail price: $ per gallon
National Average Retail Prices or Formula to Calculate State Average Retail Price

Price elasticity: You must include the negative sign

Price Elasticity Values
Price elasticity shows the relationship between price changes and consumption. Larger elasticities will show that a greater increase in price leads to a greater drop in consumption volume. For example, a price elasticity of -0.35 means that for every 10% increase in price, consumption will decline by 3.5%.

New excise tax rate: $ per gallon

Options for changing the tax rate:

Double the tax rate

National average excise tax rates

Measure the tax increase on a per-drink basis

Match the tax rate of surrounding states

These calculations assume a 7.5% markup on the tax increase.

At the new tax rate that you entered:

New volume: gallons

New revenue: $

Revenue will increase by:

$, or %