Connecticut's "Nip Tax" Generates Millions for Towns, But Critics Push for Local Ban Authority

Connecticut’s five-cent surcharge on small liquor bottles has generated more than $12 million for municipalities since 2022, but advocates want lawmakers to allow towns to ban the controversial containers altogether.

The “nickel-per-nip” program adds five cents to any bottle of alcohol under 50 mL, targeting the small bottles holding a standard shot of liquor. The name “nips” emerged in the 1770s from the European word “nipperkin,” meaning alcohol measuring less than a half-pint, according to the program details.

Revenue from the surcharge returns to the town where bottles are sold and must fund litter and waste reduction initiatives under state law.

Connecticut residents purchase an average of 93.8 million nips annually, with sales trending upward statewide, according to program data. That translates to roughly 39 nips per person of legal drinking age each year. The program generated $4.9 million from 2024 to 2025 alone.

Tom Metzner of “CT Towns Nixing The Nip” argues the program fails to address core problems and wants legislators to grant municipalities authority to ban nip sales locally.

“It does nothing to address drinking and driving,” Metzner said. “It does nothing to prevent the litter.”

However, Larry Cafero, executive director of Wine and Spirits Wholesalers of Connecticut, which manages the program’s collection and distribution, defends the initiative. His organization supports maintaining the current system.

“Before they call for a ban, their first question should be, ‘What is my municipality using these funds for?’” Cafero said.

The revenue distribution shows significant variation across Connecticut. New Haven leads with $242,298 received from 2024 to 2025, reflecting average annual sales of 4.4 million nips. Hartford ranked second with more than $181,000 in revenue.

Eastern Connecticut towns typically see higher per-resident nip sales than western municipalities, though they generate less total revenue due to smaller populations, according to program data.

Brian O’Connor, director of public policy and advocacy for the Connecticut Conference of Municipalities, said many towns now consider nip funds part of their operational budgets.

“Many towns count on whatever they get,” O’Connor said. “It deviates some depending on the year, but it’s probably consistent.”

Municipalities use the funds for various environmental initiatives. Personnel costs, including recycling coordinators, account for significant spending, along with education programs representing about 25% of expenditures, according to O’Connor. Towns also purchase equipment like street sweepers and dumpsters or fund food waste collection programs.

Some municipalities direct money toward municipal recycling programs, cleanup days, or Earth Day events. The funds need not address nip-related cleanup specifically, according to state requirements.

Waterbury received $601,705 since the program’s inception and spent nearly $226,000 as of mid-December on items including litter vacuums and street sweeper brooms, making it the fourth-highest recipient statewide.

Discussion continues about expanding allowable uses for nip revenue. Some towns advocate for directing funds toward public safety and drunk driving prevention initiatives.

“I think a few towns have advocated for putting it toward public safety, drunk driving initiatives, those kind of things,” O’Connor said. “The litter is a problem, but a lot of times what they’re finding is that people are buying the nips and then throwing them out the [car] window.”

The Connecticut Conference of Municipalities supports broadening spending authority for the funds, according to O’Connor.

Currently, alcohol sales remain under state regulation rather than local control. The debate over municipal banning authority reflects broader tensions between generating environmental cleanup revenue and addressing concerns about impaired driving and litter from the small bottles.