Top Definition
The penalty bestowed on a person when they order a more expensive beer than they usually drink because someone else is paying. The sheep- tax is most commonly paid when a bit of the more expensive beer is spilled on the orderer.

Origin: Based on the historical practice of taking sheep, wool, etc. as a tax on livestock.
Paul: Hi John, let me buy you a beer. Whatcha drinkin'?

John: (drinking a Miller Lite) I'll have the IPA on tap.

Sheep-Taxing Bartender: (sloshing the beer on John) Oops, I seem to have spilled a bit on you.
by Mereditch October 18, 2013

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