How Do Mixed Beverage Taxes Affect Menu Pricing, and What Disclosure Rules Apply on the Customer Check?

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The two mixed beverage taxes do not just sit in the background of a business’s accounting; they shape how a menu is priced and how taxes can appear on a customer’s check. The rules differ for the two taxes, and getting them backward, treating the permittee’s own tax as a charge to add to the bill, creates a problem rather than solving one. Pricing and disclosure are where the distinction between the two taxes becomes concrete.

This page explains how the two taxes shape pricing and what can appear on a receipt. It is general information, not tax or legal advice.

The two taxes behave differently at the register

Texas imposes two mixed beverage taxes under Tax Code Chapter 183: a 6.7% gross receipts tax paid by the permittee, and an 8.25% sales tax that may be collected from the customer. Their different natures drive different pricing and disclosure treatment.

The gross receipts tax cannot be added on

The gross receipts tax is the permittee’s own obligation. Under Comptroller Rule 3.1001, it may not be separately charged to or paid by the customer, and the permittee may not add it to the selling price as a separate charge or deduct it from the amount received. In practical terms, this tax has to be built into the business’s pricing and economics rather than tacked onto the check, because the permittee, not the customer, owes it.

The trap here is real: an amount a business identifies on an invoice as a “tax” is fully due to the state, on top of the gross receipts tax the permittee already owes. A business that tries to pass its 6.7% obligation to customers as a separate tax line can end up owing more, not less.

The sales tax may be passed to the customer

The sales tax, by contrast, may be passed to the customer in one of two ways: by adding it as a line item on the bill, or by including it in the sales price. If a business builds the sales tax into the price, its records must show that the sales price of alcohol includes the tax. This is where a business has a genuine choice about presentation.

What may appear on the customer’s check

The disclosure rules give a permittee specific, permitted ways to state taxes on a receipt, and the Comptroller provides examples. A permittee may, for instance, present the sales tax as included in the price or as a stated amount, and may disclose the gross receipts tax for informational purposes. The Tax Code allows a permittee, for informational purposes only, to include on a receipt a separate statement of the amount of tax the permittee will pay, or a combined statement of the permittee’s gross receipts tax and the customer’s sales tax on that item.

The key distinction in disclosure is between:

  • the sales tax, which may be charged to and collected from the customer and shown as such; and
  • the gross receipts tax, which may be disclosed for information but is paid by the permittee and is fully due to the state if labeled and charged as a “tax” on the customer.

So a receipt can tell a customer what the business will pay in gross receipts tax, but disclosing it is different from charging it. The mechanics of exactly how taxes are stated on a check follow the Comptroller’s rules, and a business should set up its point-of-sale and receipts to match those permitted formats.

Why getting this right matters

Pricing and disclosure errors are a common source of audit problems, precisely because the two taxes are treated differently. A business that prices as though there is only one tax, or that adds its own gross receipts obligation to the customer’s check as a separate “tax,” exposes itself to additional liability and to inconsistencies an audit will surface. A business that prices and discloses consistent with the rules, sales tax passed through if it chooses, gross receipts tax built into its economics and only disclosed if at all, keeps its receipts defensible.

What this means in practice

The operator who prices and discloses correctly separates the two taxes in both the menu and the receipt. The gross receipts tax is the business’s own cost, factored into pricing and never added to the check as a separate charge; the sales tax may be passed to the customer, as a line item or in the price, with records showing inclusion when it is built in.

Because the disclosure formats are specified by the Comptroller’s rules, the practical step is to configure pricing, the point-of-sale system, and receipts to follow the permitted formats, and to confirm the current rules rather than improvising. Treating the two taxes as one line item is the mistake to avoid; treating them according to their different rules is what keeps pricing and receipts compliant.

This article is for general educational purposes only and is not tax or legal advice. It does not create an attorney-client relationship and does not substitute for advice from a qualified tax professional. Texas tax law and Comptroller rules change, and how the mixed beverage taxes affect pricing and disclosure depends on the specific facts. The rules described here should be confirmed against current primary sources. For advice about a specific situation, consult a licensed Texas attorney or qualified tax advisor.

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