Alcohol Tax in Virginia: Spirits, Wine, Beer, and Sales Tax

Alcohol tax in Virginia comes in layers: a 20% state tax on distilled spirits sold through state-run ABC stores, a $0.40-per-liter excise tax on wine, per-container excise taxes on beer, standard sales tax at the register, and a local food and beverage tax when you drink at a restaurant. Federal excise taxes on producers sit underneath all of it, baked into the wholesale price before you ever see the shelf sticker.

Spirits: The 20% State Tax

Virginia is a control state. That means the government holds a monopoly on retail sales of distilled spirits, and you buy liquor at a Virginia ABC store or through its online portal rather than from a private retailer.¹

A 20% state tax applies to the price of all distilled spirits sold by the Board, including spirits purchased by restaurants and bars holding mixed beverage licenses.² Certain high-alcohol wines sold through ABC stores fall under this same 20% tax rather than the per-liter wine tax.

The shelf price already includes the 20% tax, a per-case handling fee, and a retail markup that varies by product. ABC rounds the final price up to the nearest nine cents.³ There is no separate gallonage calculation on spirits the way there is on wine or beer, because the state controls the whole supply chain.

Wine and Cider

Wine is taxed by volume. Virginia levies a $0.40-per-liter excise tax on every liter of wine sold in the Commonwealth.² A standard 750-milliliter bottle carries roughly $0.30 of this tax. ABC also lists a separate 4% state tax on wine retail prices at its stores, folded into the sticker price alongside the per-liter charge.³

Manufacturers and wholesalers pay the per-liter tax before the wine reaches retail shelves, so consumers never see it as a line item. It is embedded in the base price whether the bottle costs $8 or $80, which means the flat rate takes a bigger bite out of cheap wine than expensive wine.

Wine coolers are carved out of this section of the code. They are taxed alongside beer under a separate statute.²

Beer and Malt Beverages

Beer and wine coolers are taxed at the wholesale level using a tiered system based on container size. The rates come from Virginia Code 4.1-236.⁴

Barrel rate: 25.65 cents per gallon, or roughly $7.95 for a standard 31-gallon barrel.
Small bottles of 7 ounces or less: 2 cents per bottle.
Standard bottles over 7 and up to 12 ounces: 2.65 cents per bottle.
Large bottles over 12 ounces: 2.22 mills per ounce, which works out to about 3.6 cents on a 16-ounce tallboy.

A six-pack of standard 12-ounce bottles or cans carries about $0.16 in Virginia excise tax before any retail markup.

Sales Tax at the Register

Virginia’s retail sales tax applies on top of every excise tax already embedded in the price. The base state rate is 4.3%, and every locality adds at least 1%, so the minimum combined rate statewide is 5.3%.⁵

Three regions pay a higher combined rate of 6%: Northern Virginia (including Arlington, Fairfax, Loudoun, and Prince William), Hampton Roads (including Norfolk, Virginia Beach, and Newport News), and Central Virginia (including Richmond, Henrico, and Chesterfield). The extra 0.7% funds regional transportation projects.⁶

Sales tax applies whether you buy a bottle of wine at a grocery store, a handle of vodka at an ABC store, or a case of beer at a convenience store. It is calculated on the final retail price, which already contains the excise taxes and supply-chain markups.

Local Meals Tax on Drinks at Restaurants

Order a drink at a restaurant or bar and a local food and beverage tax lands on top of the sales tax. Virginia authorizes counties to impose this tax at up to 6% on food and beverages sold at restaurants, and the statute explicitly includes alcoholic drinks.⁷ Cities often set their own rates under separate charter authority, and those rates can run higher than the county cap. Cross a city or county line and the tax on the same cocktail can change noticeably.

One boundary matters: the local meals tax does not apply to factory-sealed alcoholic beverages purchased for off-premises consumption.⁷ Buy a sealed bottle at a winery’s retail shop to take home and the meals tax stays off the receipt, though the standard sales tax still applies. Only drinks served for on-premises consumption trigger it.

What the Layers Actually Cost You

Take a $30 bottle of bourbon bought at a Virginia ABC store in Northern Virginia. The federal excise tax is already sitting inside the wholesale cost. The 20% state spirits tax is baked into the $30 sticker. At the register, 6% sales tax adds another $1.80, bringing the out-the-door cost to $31.80. Roughly a quarter of what you paid went to some mix of federal, state, and local taxes.

Order that same bourbon as a mixed drink at a restaurant and the stack grows. The restaurant already paid the 20% spirits tax when it bought the bottle from ABC and passes that cost through in the drink price. Then sales tax and the local meals tax both apply to your cocktail’s menu price. In a locality with a 6% meals tax and a 6% sales tax, those two charges alone add 12% to the tab before tip.

Beer drinkers face a lighter overall burden because the excise rates are low and the 20% spirits tax never touches beer. Wine sits in between.

Federal Excise Taxes Underneath

Before any Virginia tax hits, the federal government collects excise taxes from producers and importers. These are baked into the wholesale cost, so you pay them indirectly through higher shelf prices. The Alcohol and Tobacco Tax and Trade Bureau administers collection.

Distilled spirits face a general federal rate of $13.50 per proof gallon, with reduced rates for small producers on their first 100,000 proof gallons.⁸ On a standard 750-milliliter bottle of 80-proof whiskey the federal tax alone adds roughly $2.14. Beer runs $18 per barrel at the general rate, with reduced rates for smaller brewers. Still wine at 16% ABV or below is taxed at $1.07 per wine gallon, with higher rates for stronger wines and sparkling wine at $3.40 per wine gallon; hard cider gets a favorable rate around $0.226 per wine gallon.⁹

1
Virginia Alcoholic Beverage Control Authority. Bureau of Law Enforcement
2
Virginia Code Commission. Virginia Code 4.1-234 – Tax on Wine and Other Alcoholic Beverages; Exceptions
3
Virginia Alcoholic Beverage Control Authority. Pricing Information
4
Virginia Code Commission. Virginia Code 4.1-236 – Excise Tax on Beer and Wine Coolers; Payment of Tax; Exceptions
5
Virginia Code Commission. Virginia Code 58.1-603 – Imposition of Sales Tax
6
Virginia Tax. Retail Sales and Use Tax
7
Virginia Code Commission. Virginia Code 58.1-3833 – County Food and Beverage Tax
8
Office of the Law Revision Counsel. 26 USC 5001 – Imposition, Rate, and Attachment of Tax
9
TTB: Alcohol and Tobacco Tax and Trade Bureau. Tax Rates