Mixed Beverage Tax in Texas: Taxable Sales, Bonds, and Filing

If you serve alcohol for on-premises consumption in Texas, the mixed beverage tax in Texas is actually two taxes: a 6.7 percent gross receipts tax that comes out of your own revenue, and an 8.25 percent sales tax you collect from the customer. Both are reported monthly to the Texas Comptroller, both are due by the 20th of the following month, and missing either one triggers penalties starting the next day.¹²

The Gross Receipts Tax and the Sales Tax Compared

The 6.7 percent gross receipts tax is your expense. It applies to the total you receive from selling, preparing, or serving alcoholic beverages and related items like ice and mixers consumed on the premises.¹ You cannot add it as a separate line on the customer’s tab, and you cannot deduct it from the sale price.³ Build it into your drink pricing or watch it eat your margin.

The 8.25 percent sales tax is the customer’s. You collect it at the register, and the moment it lands there it belongs to the state. You are a trustee for those funds until you remit them.² Your point-of-sale system needs to track the two amounts separately, because they are reported on different forms and governed by different subchapters of the Tax Code.

What Counts as a Taxable Sale

Both taxes apply to distilled spirits, wine, beer, and ale served for on-premises consumption, plus ice and nonalcoholic beverages sold to be mixed with alcohol and consumed on site.⁴ A separate charge for a tonic or club soda that goes into a cocktail is still a mixed beverage charge.

A nonalcoholic drink sold on its own is not. Coffee, soft drinks, and bottled water sold to someone who is not combining them with alcohol fall under regular state sales and use tax instead. Food sales are the same: ordinary sales tax, not mixed beverage tax, no matter what the customer is drinking.³

Mandatory Gratuities

A mandatory gratuity on an alcohol tab is excluded from mixed beverage tax only when all three of these are true: the charge is no more than 20 percent of the alcoholic beverage sales price, it is separately identified as a tip or gratuity on the receipt, and it is paid out entirely to qualified employees. If the house keeps any part of it, that part is taxable. If the mandatory gratuity exceeds 20 percent, the entire amount is taxable regardless of how it is distributed.³ Voluntary tips left by customers never enter the tax base.

Cover Charges

Cover, door, entry, and admission fees are not subject to mixed beverage tax. They are subject to regular state sales tax, and they still need to show up in your daily summaries.⁵

Complimentary Drinks

A free drink is not a mixed beverage sale because no money changes hands. You instead owe state use tax on the cost of the taxable ingredients, including liquor, beer, wine, and most mixers. That use tax goes on your regular sales and use tax return, not on your mixed beverage reports.⁶

Who the Taxes Apply To

Texas Tax Code Chapter 183 reaches any business holding a qualifying permit from the Texas Alcoholic Beverage Commission. That includes holders of a mixed beverage permit, private club registration permit, private club exemption certificate, nonprofit entity temporary event permit, and distiller’s and rectifier’s permit. It also covers variations with a retailer late hours certificate or a food and beverage certificate.⁷

There is no minimum sales threshold and no grace period for new permit holders. Even a one-day charity event served under a nonprofit entity temporary event permit owes both taxes for that event.³ Tax obligations begin with the first drink sold after TABC issues the permit.

Security Bonds Before You Open

Before serving, you must post two separate surety bonds or cash deposits with the Comptroller: one securing the 6.7 percent gross receipts tax, one securing the 8.25 percent sales tax. The amount depends on your permit:

Mixed beverage permit: $3,750 to $100,000
Private club registration permit: $2,250 to $100,000
Private club exemption certificate: $1,500 to $100,000

If four times your monthly average tax liability runs higher than the figure above, you post the higher amount.⁸ You cannot legally serve until both bonds are in place, so budget for them in your opening costs.

Filing and Payment

Both reports are due on or before the 20th of the month following the reporting period. A report is required every month even in a month with zero alcohol sales.⁵ If the 20th is a weekend or state holiday, the deadline moves to the next business day.⁹

Filing method depends on your prior year’s volume. The Comptroller’s fiscal year runs September 1 through August 31. If you paid under $50,000 in mixed beverage taxes last fiscal year, you can file by WebFile or on paper. At $50,000 or more, WebFile is mandatory.⁴

There is no timely filing discount. Unlike regular sales and use tax, mixed beverage taxes offer no reward for paying early or on schedule.³

Penalties for Late Filing or Payment

A flat $50 penalty applies to every late report, even one showing zero tax owed. On top of that, a payment one to 30 days late carries a 5 percent penalty on the amount due. Past 30 days, an additional 5 percent kicks in for a total of 10 percent. Interest on the unpaid balance starts 60 days after the original due date at a variable rate set at the prime rate plus one percent.¹⁰ One forgotten zero-dollar report in a slow month still generates a $50 bill.

Records You Have to Keep

Keep all mixed beverage records for at least four years, and longer if any assessment, refund claim, or administrative proceeding is pending.⁵ Paper or electronic is fine, as long as records are available to the Comptroller on request within a reasonable time.

Daily summaries have to go well beyond total sales and tax collected. They must log complimentary drinks dispensed by type, number, and normal selling price; alcohol lost to theft, with a police report; alcohol lost to breakage or spillage, documented when it happens; alcohol used in cooking; cover charges collected; and any changes to prices, glass sizes, or recipes during the month.⁵ Auditors use these summaries to reconstruct what your bar should have collected against what you reported. Weak records are the fastest path to an estimated assessment, and estimated assessments almost always come in higher than what you actually owed.

Refunds for Overpayment

You generally have four years from the date the tax was due to file a refund claim. The claim has to be in writing, state each reason for the overpayment in detail, and identify the specific reporting period. You can submit it by email to the Comptroller’s refund office or by mail. If an accountant, attorney, or anyone other than the permit holder files on your behalf, a Limited Power of Attorney form is required.¹¹ The statute of limitations stops running once the claim meets all requirements, so a complete filing matters more than a fast one.

1
State of Texas. Texas Code 183.021 – Tax Imposed on Gross Receipts of Permittee From Mixed Beverages
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State of Texas. Texas Code 183.041 – Tax Imposed on Sales of Mixed Beverages and Related Items
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Texas Comptroller of Public Accounts. Mixed Beverage Taxes Frequently Asked Questions
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Texas Comptroller of Public Accounts. Mixed Beverage Gross Receipts Tax
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Cornell Law Institute. 34 Tex. Admin. Code 3.1001 – Mixed Beverage Gross Receipts Tax
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Texas Comptroller of Public Accounts. Mixed Beverage Tax Return
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State of Texas. Texas Code Tax Code 183.001 – Definitions
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Texas Comptroller of Public Accounts. Security Bonds for Texas Mixed Beverage Taxpayers
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Texas Comptroller of Public Accounts. Revenue Object 3250 – Mixed Beverage Gross Receipts Tax
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State of Texas. Texas Code Tax Code 183.024 – Failure to Pay Tax or File Report
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Texas Comptroller of Public Accounts. Mixed Beverage Sales Tax Refunds