Some argue that state governments should not profit from residents’ vices. However, some states rely on these activities for a substantial proportion of their budget. In Nevada, “sin taxes” accounted for nearly 6% of the state’s revenue. Based on data from the Census Bureau and the American Gaming Association, 24/7 Wall St. identified the states where the largest percentage of revenue came in the form of proceeds from alcohol, tobacco and casino taxes, as well as the lottery and state-regulated liquor stores. These are the states profiting most from sin.
Frequently, consumption is higher in the states making the most from sin taxes. For example, many of the states that profit the most from sin rely heavily on tobacco revenue. While tobacco tax rates are relatively low in some of these states, sales are higher than the national average. In fact, the states with the highest taxes for alcohol and tobacco do not necessarily bring in the most money.
Relative to some of the other sin-related sources of income, taxes on alcohol are not a big source of revenue. However, some state governments opt to control liquor sales, which can involve regulating stores and collecting commissions. In others, it can even mean warehousing and selling the liquor directly to consumers. In New Hampshire, state-controlled liquor sales accounted for 1% of the state’s income.