As a result of the damage from the 1936 flood, the Pennsylvania General Assembly imposed an emergency tax on all alcohol sold in the Commonwealth. The "temporary" 10%tax was initially intended to help pay for clean up, recovery, and assistance to flood victims. The tax was never repealed and in 1963 the tax was raised to 15% and again in 1968 to 18% (not including the statewide 6% sales tax). The nearly $200 million collected annually no longer goes to flood victims, however, instead going into the general fund for discretionary use by lawmakers.
The Pennsylvania Department of Revenue states:
"All liquors sold by the LCB are subject to this tax which is computed on the actual 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."