Map via the Tax Foundation.

Michigan’s wine taxes are lower than most states, but still the highest in the region. That’s according to a new report listing state wine excise taxes across the country, published by the Tax Foundation.

In an excise tax, government taxes the producer or seller of a product, which raises the price for buyers. These taxes are imposed in addition to other taxes, like the sales tax.

Michigan taxes wine at $0.51 per gallon, ranking it 35th in the nation. Indiana charges $0.47; Ohio, $0.32; and Wisconsin $0.25. Illinois charges $1.39, which is 11th-highest overall.

Among the states, Kentucky has the highest tax rate of $3.17 per gallon. California and Texas tie for the lowest, with an excise wine tax of $0.20 per gallon.

Excise taxes are commonly imposed on cigarettes, alcohol, gambling and gasoline. These are often considered “sin taxes” – higher fees on activities frowned upon or seen as unnecessary goods and services.

Morgan Scarboro, a policy analyst at the Tax Foundation, said these types of taxes are inefficient.

“These taxes are often regressive and non-neutral,” Scarboro said. “Also, the revenue is typically unstable. These taxes are often propped up as quick ways to collect additional revenue to fund important policy priorities, but important policies should be funded by stable taxes with broad bases.”

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