Spirits Tax
Learn about spirits basic tax, and what purchases are subject to this tax.
The information on this page does not replace the law found in the Liquor Tax Act, 1996, and related regulations.
For information about wine tax, visit the wine tax page. For information about beer tax, visit the beer tax page.
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The 2026 Ontario Budget, A Plan to Protect Ontario amended the Liquor Tax Act, 1996 to replace the spirits and spirit coolers categories with three categories distinguished by alcohol by volume (ABV), and combine the spirits basic, volume and environmental taxes into a single spirits basic tax rate based on ABV. The effective date of this change is April 1, 2026.
Alcohol manufacturers may refer to this notice to understand how the changes apply to them.
Spirits basic tax is included in the price a consumer pays for spirits made by an Ontario spirit manufacturer (distiller) from their on-site distillery retail store in Ontario.
Spirits basic tax does not apply to spirits purchased from:
- Liquor Control Board of Ontario (LCBO)
- licensees (e.g. bars and restaurants)
- retailers (e.g. grocery or convenience stores)
Spirits basic tax
The spirits basic tax is calculated as a percentage of the retail price of spirits. The retail price is the price set by the distillery, and excludes:
- any deposit on the container, and
- all taxes imposed on the purchase of the beverage under
- Part IX of the Excise Tax Act (Canada) (i.e., harmonized sales tax), and
- Liquor Tax Act, 1996 (i.e., spirits basic tax).
Effective April 1, 2026, the spirits basic tax rates, calculated based on the ABV, are as follows:
| Alcohol by Volume (ABV) | Basic Tax Rate |
|---|---|
| 7.1% or less | 20% |
| More than 7.1% and up to 18% | 25% |
| More than 18% | 30.75% |
Collection of tax
When applicable, a distiller collects the spirits basic tax and must report and remit the tax to the Ministry of Finance on a monthly basis. The return and tax remittance must be received by the 20th day of the next month.
Filing a Spirits Tax Return
Learn how to complete your spirits return in the Spirits Return Guide.
Information about filing requirements, supporting schedules, penalties for late filing and failure to remit tax collected or payable and payment information for remitting the tax is provided in the Spirits Return Guide.
Distillers deemed to be purchasers of their own products
A distiller is deemed to be the purchaser of spirits they distribute in Ontario without charge and must pay any applicable spirits basic tax. If a distiller provides samples of spirits at a charge and the charge does not cover all of the spirits basic tax associated with that sample, the distiller is deemed to be the purchaser of the sample to the extent of the shortfall and must pay the shortfall in the spirits basic tax for that sample.
Promotional distribution exemption
A distiller may claim a limited spirits basic tax exemption for up to 1250 litres of spirits it distributes without charge in Ontario each year to promote its spirits products.
Learn more about Promotional distribution exemption: Beer, wine and spirits tax
Tax-included pricing
Spirits made by a distiller that is subject to the spirits basic tax is priced to include the tax.
Distillers must provide information on the amount of spirits basic tax included in the price in a manner approved by the Minister of Finance.
Distillers may list the amount of spirits basic tax included on the invoice to purchasers, but are not required to do so.
If an invoice does not show the amount of spirits basic tax payable, distillers must prominently post or provide information that includes:
- the current spirits basic tax rate charged
- an explanation of how the retail price of spirits is determined under the Liquor Tax Act, 1996
- a reference to the Ministry’s website, ontario.ca/finance
Alcohol licensing
The Alcohol and Gaming Commission of Ontario (AGCO) and LCBO are responsible for the general regulation of the beer, wine and spirits industries in Ontario, including the licensing of alcohol manufacturers and authorizing of retail stores.
Direct bank deposit
Get your Ministry of Finance refund or rebate faster with direct deposit! It's easy and secure.
Download: Direct Deposit Request / Direct Deposit Authorization
Contact us
If this page does not address your specific situation, please refer to the Liquor Tax Act, 1996 and its related regulations, or contact us using one of the options below:
Email: AM-SAU.Enquiry@ontario.ca