are often imposed by governments, which keep a sharp eye on things that the governed seem to greatly enjoy; those that are not banned outright are usually destined to be taxed instead. The recurring question about beer taxes appears to be whether the government in question considers beer a food, a luxury, or a vice that is detrimental to society. Traditionally, beer has been considered primarily a food staple and a necessary part of a healthy diet. It was, therefore, taxed only moderately, if at all. It was even used alongside other foods as a form of payment for work ranging from the building of Egypt’s pyramids to service at England’s royal court. But just as governments inevitably run into hard times and are forced to find new and novel ways to fill their coffers, beer inevitably went from being recognized as healthy and nutritious to being considered an unnecessary luxury. The taxman soon set upon brewers.

In the United States, the federal taxation of beer began as a temporary war measure in 1863, during the Civil War (1861–1865). Until that time, beer had been treated as “liquid bread,” that is, a food not to be taxed. Because of the war, however, many patriotic brewers siding with the North were more than happy to provide the federal government with one dollar for every barrel of beer sold. Many of these brewers had formed the United States Brewers Association in 1862, which was instrumental in creating the first American beer taxation system.

Throughout the war, the members of the Association were very dutiful in their tax obligations. They even assisted the government in collecting these taxes. At war’s end, however, it quickly became clear that the emergency excise tax on beer was there to stay, and the Association dispatched a delegation to Europe to investigate how beer taxes were collected there. In Europe the Americans found a veritable jumble of tax collection methods. One exasperated visitor said, “Austro-Hungary taxes according to extract; Bavaria, Great Britain, and Norway tax malt by measure; Württemberg and the German Brewing-Tax Confederation levy on malt by weight; Russia, Belgium and the Netherlands base the tax on capacity of fermenting tuns, while France and Baden tax according to capacity of kettle.” In the end, the Association recommended to the U.S. Government a system of taxation based on the amount of finished product, in terms of barrels, which the breweries released into the consumer market. This excluded the beer consumed by brewery employees, of course. This system survives to this day in the United States. Some countries, including the United States, maintain a lower tax burden upon small brewing concerns, and this has proved to be a key factor in the development of the craft brewing segment.

In England, beer taxation was much older. There it started in 1266, when Henry III signed the “Assize of Bread & Ale” into law. This statute contained provisions for a form of beer taxation that we would recognize today as a combination of licensing fees, fines, and direct taxes. Brewers were compelled to make regular payments to the government on the production and sale of beer, and those who transgressed the laws would simply be forced to pay more. Later, during the reign of William III, Parliament enacted the first taxes on malt and hops, thus ushering in Britain’s long and complicated string of beer taxation, with taxes levied on malt, hops, and the finished beer. Because beer is made almost entirely from malt, not hops, by weight and ignoring water, and because the amount of malt in the mash is a rough measure of the amount of alcohol in the beer, the malt tax in effect amounted to a tax on alcohol, whereas the hop tax was comparatively negligible. Many British brewers, therefore, tried to reduce their malt tax payment by resorting to alternative fermentables. See adjuncts. But the government was not to be fooled so easily. It responded by slapping a tax, also called a duty, on the strength of the wort, measured in degrees of original gravity. See original gravity. This method of duty collection was changed only in 1993 when so-called duty-at-the-gate replaced it. This was a tax on finished beer calculated on both its volume and the relative volume of alcohol it contains.

On the Continent, too, beer taxation flourished. It is not entirely certain who came up with the idea, but documents reveal that during the time of Charlemagne the most common beer tax was a gruit tax placed on herbs brewers used to flavor their brews before hops became common. See gruit, hops. By 1220, the city of Ulm in southern Germany had imposed a tax on beer; by 1388, Margrave Friedrich VI of Kulmbach in northeastern Bavaria imposed a “tap penny” of one guilder per barrel on his brewers output and a “drink tax” on the beers dispensed by his innkeepers. Duke Wilhelm IV of Bavaria, best known as the principal author of the Bavaria Beer Purity Law of 1516, has another, less noble deed to his credit. See reinheitsgebot. In 1543, he wanted to purchase three towns in neighboring Swabia—Gundelfingen, Lauingen, and Höchstädt—a transaction for which he needed cash. So, in short order, he placed a general tax, a so-called beer penny, on all beer produced in Bavaria. In the end, he did not buy the town, but the tax stayed, because, thus ran his argument, he had to raise an army because the Ottoman Turks were a constant threat from the south. The beer penny even survived the Thirty Years War (1618–1648), only to rise continuously over the years.

Today, beer is taxed all over the world, often in multiple ways, in the form of license fees on producers, importers, distributors, and retailers; by way of taxes on its original gravity, alcoholic strength, and volume; and by way of consumption taxes such as sales taxes, value-added taxes, and goods and services taxes. In short, the methods of taxing beer are as varied as there are governments searching for ways to tax it.