"Johnstown Flood" Tax
As a result of the extensive damage from the 1936 flood, the Pennsylvania General Assembly imposed an emergency tax on all alcohol sold in the Commonwealth to raise money for recovery. The "temporary" 10% tax was intended to help pay for clean up, recovery, and assistance to flood victims. The tax was never rescinded and, in 1963 it was raised to 15% and in 1968 to 18% (on top of the statewide 6% sales tax). The nearly $200 million in annual revenues from this tax now goes into the general fund for discretionary use by lawmakers.
According to the Pennsylvania Department of Revenue:
"All liquors sold by the LCB are subject to this 18 percent tax, which is calculated on the price paid by the consumer including mark-up, handling charge and federal tax. The first sale of liquor also is subject to the sales and use tax at the time of purchase."
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