What Is the Mixed Beverage Gross Receipts Tax, and How Does It Differ from the Mixed Beverage Sales Tax?
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Texas taxes drinks sold under a mixed beverage permit twice. The mixed beverage gross receipts tax is 6.7 percent of the permittee’s receipts from alcoholic drinks and the ice and mixers served with them, and the permittee owes it out of its own revenue; it may not be charged to the customer. The mixed beverage sales tax is 8.25 percent of the sales price of the same items, and the permittee may collect it from the customer. Both are filed monthly with the Texas Comptroller.
The two taxes side by side
| Mixed beverage gross receipts tax | Mixed beverage sales tax | |
|---|---|---|
| Statute | <a href="https://statutes.capitol.texas.gov/Docs/TX/htm/TX.183.htm">Tax Code Section 183.021</a> | Tax Code Section 183.041 |
| Rate | 6.7 percent | 8.25 percent |
| Base | the permittee's gross receipts from mixed beverages, and from ice and nonalcoholic beverages sold to be mixed with alcohol and consumed on the premises | the sales price of each mixed beverage, and of ice and nonalcoholic beverages sold to be mixed with alcohol and consumed on the premises |
| Who bears it | the permittee | the customer, if the permittee collects it |
| Charged to the customer? | no; Section 183.0212(c) says it "may not be separately charged to or paid by the customer" | yes, either added to the bill or included in the price |
| Monthly report | due by the 20th of the following month, even with no sales | a separate monthly report, also due by the 20th |
Items taxed under the mixed beverage sales tax are exempt from local sales and use taxes (Section 183.043(d)), and the Tax Code directs that the mixed beverage sales tax be administered, collected, and enforced the same way as the general sales and use tax (Section 183.043).
Where the two came from
Both current rates took effect on January 1, 2014, under House Bill 3572 of the 83rd Legislature. That law lowered the gross receipts tax to 6.7 percent and created the separate 8.25 percent mixed beverage sales tax. Guidance written before 2014 describes a single, higher gross receipts tax and does not reflect current law.
What “may not be charged to the customer” means
The gross receipts tax is the permittee’s own cost of doing business, so it belongs in the menu price, not on the check as a charge. The Tax Code allows a permittee to disclose it on a receipt for information only, in specific formats, which are separate from the ways the mixed beverage sales tax may be shown.
Filing and paying
A mixed beverage permittee files the mixed beverage gross receipts tax return and the mixed beverage sales tax return with the Comptroller by the 20th day of each month (Sections 183.022 and 183.0421), and the gross receipts report is due even if the business made no alcohol sales that month. Its other taxable sales, such as food, go on the ordinary sales and use tax return on the schedule the Comptroller assigns.
One drink, two taxes (hypothetical)
Take a drink that brings in $10 of gross receipts, with the sales tax added to the bill. The permittee owes $0.67 of gross receipts tax out of its own $10, and the customer pays about $10.83, the extra $0.83 being the mixed beverage sales tax the permittee collects and remits. The first amount is a cost that belongs in the menu price; the second passes through to the customer. A permittee that includes the sales tax in the menu price instead has to carry both inside the price and keep records showing that it did.
This article is general information about Texas alcoholic beverage law, not legal advice, and reading it does not create an attorney-client relationship. Statutes and TABC rules change; confirm current requirements with the Texas Alcoholic Beverage Commission, the relevant city or county, or a licensed Texas attorney before acting.