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A Cinco de Mayo toast to tequila taxes

May 5, 2012

Happy Cinco de Mayo.

Today is the commemoration of Mexico's victory in 1862 at the Battle of Puebla over the invading French forces of Napoleon III.

Over the years, the holiday spread from Mexico, through the American Southwest and eventually across the United States. And perhaps America's recognition of Cinco de Mayo is fitting:

The United States was a major cause of France's attack on Mexico. The war America recently won over Mexico leveled the Mexican treasury and led to financial disaster. Thus, Juarez suspended payment to France and incited Napoleon III, ruler of France, to act. U.S. President Abraham Lincoln and the United States were dependent on Mexico staving off the French troops until the Confederacy could be defeated and Lincoln could deploy troops south to aid Juarez.

Historic significance and U.S. involvement aside, most Americans don't know the real reason behind Cinco de Mayo.

But being a party loving country we still celebrate heartily, primarily by hoisting some Mexican beers and, of course, tequila-laced margaritas.

Tequila_Pee Wee's Big Adventure video clip1 Click image to start video of Pee Wee Herman's tequila dance.

Adding up alcohol taxes: That means May 5 is a big money making day for adult beverage manufacturers.

And all those bottles of beer and liquor also represent federal and state alcohol taxes.

The federal government generally levies an excise tax of $18 per barrel on beer. That comes to around .05 cents per 12-ounce can.

As for tequila and similar products, distilled spirits makers face a federal excise tax of $13.50 (less any credit for wine and flavor content) on each proof gallon of hard liquor. That's a $2.14 tax on an 80 proof bottle of booze.

At lower governmental levels, some officials in recent years have revised local alcohol laws in order to maximize the tax take.

Tequila at tax time: But there's one more tequila-specific tax connection.

Oprah Winfrey has admitted that each April she depends on the distillation from the blue agave plant to get her through Tax Day.

You also might find these items of interest:

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The More Tax Posts tab at the top of this page will take you to, well, more tax posts. You also can search below for a tax topic. 

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TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

Comments
  • Pietro_F

    More of a red wine tax return drinker myself, which can lead to great lament in years I end up owing.

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