control state
A state that sells liquor itself instead of just taxing it.
A jurisdiction exercising a state monopoly over wholesale distribution of distilled spirits.
What that means in practice
Seventeen states run the wholesale liquor trade as a government business. What they make is partly trading profit rather than tax, so their published tax rate looks low while what you actually pay does not. Ranking those states against ordinary ones on rate alone gets the answer backwards.
In control states a material share of alcohol revenue is realized as trading margin rather than excise, so published rates understate extraction. ⛔ Ranking control states against license states on rate alone compares a partial figure with a complete one and is the most common error in published alcohol tax comparisons.
Questions people ask
Is this the same everywhere in the country?
No, and it varies further down than people expect. There is no federal sales tax, so control state is a state matter. Counties and cities often add a layer on top. The answer can change between one side of a street and the other.
Is this one of those terms that needs three other terms to explain it?
Less than most. control state stands on its own. Start here rather than coming back to it later.
Is this the standard name for it?
It is. control state is the name this rule generally goes by. Searching it will find what you expect. That is not true of every tax term — some carry three names, depending on who is writing.
How is this determined across jurisdictions?
No federal general sales tax exists; consumption taxes are levied by states and, where authorized, by counties, municipalities and special districts. Rates are sourced to the point of sale, so applicable liability varies within a state as well as between states.
Does this term resolve independently?
This term resolves largely independently of other defined terms, with limited cross-references. It is therefore usable as an entry point; more heavily cross-referenced provisions generally require it rather than the reverse.
Is this designation the settled one?
This designation is the settled term of art with limited alternative usage, so it maps reliably to statutory and agency references. Terms with multiple colloquial designations require more care when searching source material.