District of Columbia Beverage Tax Stamps

When the Amendment  repealing Prohibition was fully ratified on December 5, 1933, the issue of regulating and taxing sales of alcohol was taken up. Early on, it was decided that the method by which this would be accomplished — both in states and the District of Columbia — was by the use of tax stamps. The District Commissioners planned to begin collecting  taxes and license fees on beer, wine, and liquor beginning in early 1934. They estimated that Washingtonians would consume enough hard liquor in 1934 to bring the per capita consumption to seven-tenths of a gallon, or 350,000 gallons for the entire city.

The District Commissioners ordered the preparation of 3,450,000 District liquor revenue stamps from the Bureau of Engraving and Printing on May 10, 1934.  Each container of taxable beverages sold after June 1, 1934, would need to have a stamp affixed to it to verify that the tax had been paid, and beverage dealers were required to make a complete inventory of their stocks as of May 31, 1934, in preparation of the stamp tax system. Additionally, each stamp would be canceled by the stamping of the license number of the dealer across the face of the stamp.

Alcoholic beverage stamps May 19, 1934 (District officials inspecting beverage tax stamps at the Bureau of Engraving and Printing, May 19, 1934)

Interestingly, once the stamps went into use, stamp collectors began attempting to purchase the stamps for their collections, but their requests were turned down. The stamps were for revenue purposes only. According to an article published on June 3, 1934, the stamps were produced in sheets of 50 with the words “District of Columbia” at the top and ” Beverage Tax Paid” on the bottom. In the middle between the words in large figures the design contained a numeral 1/4, 1/2, 1/8, 1/16, etc. above the word gallon.

While the stamps were all the same size, they were printed in different colors for different types of alcohol, which similarly corresponded to the different tax rates for each.

Alcohol stampThe alcohol stamps were printed in yellow and originally priced as following: 1 gallon, $1.10 each, or, $55 for a sheet; 1/4 gallon, 27 1/2 cents per stamp, or, $13,75 per sheet; 1/2 gallon, 13 3/4 cents per sheet, or, $6.88 per sheet; and 1/16 gallon, 6 7/8 cents per stamp, or, $3.44 for a sheet.

scan0001(Champagne revenue stamps.)

Champagne stamps were purple and the liquor/spirits stamps were orange. Their initial tax rates were different that the alcohol stamps beginning with the rate of 50 cents per 1 gallon stamp, or $25 per sheet, and being reduced by volume in a similar manner as the alcohol stamps.scan0003(Liquor stamps. The back of the stamp on the right bears the inscription “Brandy Martha, Ann, Helen and I bought for fruit cake!”)

Wine stamps were green and taxed at the initial rate of 35 cents per single 1 gallon stamps, or $17.50 per sheet of 50., with a similar rate structure for lesser volumes as the other types of beverage tax stamps.

scan0002(Wine tax stamps.)

The Government collected $184,923,525 in alcoholic beverage taxes in the first seven months of legalized liquor sales. This included $7,554,374 from Maryland (including the District of Columbia) and $49,276 from Virginia.

While the system worked reasonably well, it was not without problems. Initially there was confusion between some of the colors and which types of alcohol they should be affixed to leading some purveyors to affix incorrect, and higher rate stamps to the wrong bottles. Changes in the tax rate also resulted in some merchants attempting to stock up on stamps at the lower tax rate to use after the rate change took affect.

Liquor dealers began advocating for the end of the stamp tax system at the end of 1956, stating that the system was archaic, expensive, and labor intensive with no benefit to consumers. The stamp system was finally ended in its entirety in 1961 and replaced by a monthly reporting system.

 

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