Alcoholic Beverage Taxes Excise taxes are imposed on the sale of alcoholic beverages by manufacturers on a per-gallon basis. California's alcoholic beverage tax is levied in addition to a federal excise tax. In addition, annual license fees must be paid by retail establishments selling liquor. As shown in the accompanying figure, different tax rates apply, depending on the beverage. The majority of revenues come from distilled spirits and beer.
Tax is doubled for higher proof.
The California State Constitution allows for a state-run lottery and wagering on horse races, as well as bingo for charitable purposes. Lottery revenues are a minor source of funds for schools. Horse Racing Levies Horse racing license fees and taxes are levied on the amounts wagered at horse racing meets. The tax rate ranges from 0.4 percent to 2 percent depending on the style of racing, the type of wager, and where the wager is placed. The SDI tax is levied on employees in the form of payroll deductions in order to fund the disability insurance program.