How Virginia drinks

Virginia buys the bottle directly from the distillery in Lynchburg, Tennessee, paying $11.48 for it. The state adds a $1 fee per 12-bottle case for warehouse processing, marks up the price by 69 percent and then applies a 20 percent excise tax, one of the nation's highest. After paying the state's standard sales tax, customers plunk down $24.68, no matter where they live in the state.

Montgomery County is a control county that holds a monopoly on the sale of distilled spirits. The county buys the bottle from the distillery for $12.42. Maryland collects a $1.50/gallon excise tax. The county then applies a 27 percent markup, arriving at a wholesale price of $16.15 for the bottle, which is for purchases by restaurants. Retail customers face an additional 18 percent markup, meaning the bottle is currently being advertised at stores for $19.09, or $20.24 after Maryland's 6 percent sales tax.

D.C. liquor sales are controlled by private wholesalers and retail outlets. Retail outlets buy products from wholesalers, who pay a $1.50/gallon excise tax to the D.C. government on their sales. Retail stores then set shelf prices according to market forces. The owner of D.C.'s largest store, Calvert-Woodley Wine and Spirits, said he has recently been buying a 750 ml bottle of Jack Daniel's wholesale for $17.20. Calvert-Woodley's non-sale price for the Jack Daniel's bottle is $22.99. D.C. imposes a 9 percent sales tax on alcohol, so consumers pay $25.06.

Liquor sales in most of Maryland are controlled by private wholesalers and retail outlets. Retail outlets buy product from wholesalers and set shelf prices according to market forces. Wholesale prices account for a $1.50/gallon excise tax paid to the D.C. government on their sales. The owner of Camelot Discount Liquors said he has recently been buying a 750 ml bottle of Jack Daniel's from the wholesaler for $16.79. The bottle has recently been selling at Camelot for $18.89. After Maryland's 6 percent sales tax, the bottle sells for $20.02.