The Excise Act of 1791 was the government’s first act to raise taxes to pay government debts. The Federal government had promised to assume the individual state debts from the Revolutionary War and needed income to pay these debts. The law would eventually lead to the first constitutional crisis – The Whiskey Rebellion.

The law was written to levy taxes on distillers of spirits. It went into effect on July 1, 1791. The tax varied from $.09 to $.25 per gallon, depending upon the percentage of proof on the still. The law stipulated that an annual tax of $.60 on the capacity of the still would be charged, but the distiller could pay $.09 on actual production instead of potential production. The law met with serious resistance and in 1792 the law was modified. These changes were an attempt to placate the resistance to the law from rural farmer distillers. The changes were a reduction on all classes of proof to a range of $.02 to $.07 cents per gallon and taxes were lowered on country stills.

The changes were of little consequence as there was still resistance to the law. In 1794, rural distillers boycotted the payment of their taxes. Western Pennsylvania and Kentucky distillers were militant in their resistance and tax collectors were tarred and feathered and it eventually came to blows in western Pennsylvania when an armed conflict broke out. A person was killed and the violence forced the Federal government to call up a militia of 13,000 men to crush the resistance. The resistance faded away in face of this show of force and there were only two men captured and charged with treason. President George Washington pardoned both of them. The taxes were to stay until the election of Thomas Jefferson as president. He had promised to balance the budget and repeal the whiskey tax. This he did in 1802. The tax came back in a similar form in 1815 in order to pay off the debts accrued from the War of 1812, but was again repealed in 1818 when the debts were paid. There was no tax on whiskey until 1861 when the American Civil War brought back the need to pay war debts. That tax is still with us today.