How do Federal Excise Taxes Work on Pure Ethanol

Federal Excise Taxes are taxes the government imposes on certain goods and services, including alcohol, tobacco, and firearms. These taxes are designed to generate revenue for the government and discourage these products’ consumption. In the case of 100% Pure Ethanol (Ethyl Alcohol or 200 Proof Ethanol), Federal Excise Taxes are imposed on producing and selling pure ethanol products.

What are Federal Excise Taxes for Pure Ethanol?

The Federal Excise Tax on 200 Proof Ethanol is currently $26.68 per gallon. This tax is among the highest taxes on any product in the United States. The tax is levied on the ethanol producer, and higher prices pass the cost on to the consumer.

What are the Tax Rates on Ethanol?

To calculate the federal excise tax on different proofs of ethanol, you can use the following equation:

First, convert the proof to percent alcohol:

For example) 

Step 1

(Proof of alcohol / 2) = Percent Alcohol

190 proof ethanol / 2 = 95% alcohol

Step 2

($26.68 x % alcohol) = FET Rate

$26.68 x 95% alcohol = $25.346 tax per gallon

[Check out our federal excise tax calculator here (Coming Soon)]

How Improve Efficiencies of Pure Ethanol Costs

Reduced Tax Ethanol Program for Pure Ethanol

Work with a reliable supplier, like Simple Solvents, that can offer reduced tax ethanol at only $5.40 per gallon of 200 proof ethanol vs. $26.68. This is almost a 5x reduction in tax implications. By contacting Simple Solvents, see if you are eligible for reduced tax ethanol now.

Efficiencies in Logistics of Pure Ethanol

Another to reduce the impact of Federal Excise Taxes is by focusing on efficiency in logistics. By managing freight and offering flexibility in pick-up, producers can reduce delivery costs and timelines, which can help offset the tax cost. Let Simple Solvents work your logistics to improve efficiencies and time spent procuring ethanol.

Efficiencies in Production

You can increase efficiencies during production of products that use pure ethanol in the manufacturing process. One example includes improving the recovery rate of your ethanol during the extraction process. Additionally, standard operating procedures can help reduce accidents and losses of ethanol.

In conclusion, Federal Excise Taxes on Pure Ethanol are high. They can significantly impact the pricing of ethanol products and products that use ethanol in the manufacturing process. Simple Solvents is here to assist with every step of the process.

Buy 200 Proof Pure Ethanol from Simple Solvents Now