Texas alcohol tax actually refers to several different taxes collected by two state agencies, with federal excise tax layered on top. The Texas Alcoholic Beverage Commission (TABC) collects volume-based excise taxes from distributors, wholesalers, and manufacturers. The Texas Comptroller of Public Accounts collects the two mixed beverage taxes paid by bars, restaurants, and clubs. The federal Alcohol and Tobacco Tax and Trade Bureau (TTB) collects its own excise tax from producers and importers. Which taxes you owe depends entirely on where you sit in the supply chain.
Who You File With
The single biggest source of confusion is that two Texas agencies handle alcohol taxes under separate reporting systems. If you distribute, wholesale, or manufacture alcohol, you file excise tax reports with the TABC based on volume.1TABC. Alcohol Excise Taxes If you hold a mixed beverage permit, you file the mixed beverage gross receipts tax and the mixed beverage sales tax with the Comptroller.2Texas Comptroller of Public Accounts. Mixed Beverage Taxes A business that both manufactures and sells by the drink can end up filing with both.
State Excise (Gallonage) Tax Rates
Excise taxes are paid before product reaches the retail shelf, calculated on the volume entering the commercial stream. Distributors and wholesalers pay on sales to retailers; manufacturers authorized to sell directly to consumers pay on those sales.1TABC. Alcohol Excise Taxes The current Texas rates:
- Distilled spirits: $2.40 per gallon.3State of Texas. Texas Alcoholic Beverage Code 201.03 – Tax on Distilled Spirits
- Wine 14% alcohol or less: $0.204 per gallon.
- Wine over 14% alcohol: $0.408 per gallon.1TABC. Alcohol Excise Taxes
- Ale and malt liquor: $0.198 per gallon.
- Beer (malt beverages): $6.00 per barrel, roughly $0.19 per gallon.4State of Texas. Texas Alcoholic Beverage Code 203.01 – Tax on Beer
Excise tax reports are filed monthly with the TABC.
The Two Mixed Beverage Taxes
If you run a bar, restaurant, or club with a mixed beverage permit, you owe two separate taxes on every drink sold.
Mixed Beverage Gross Receipts Tax (6.7%)
Mixed beverage permittees owe 6.7 percent on total gross receipts from sales of alcoholic drinks, along with the ice and non-alcoholic mixers served on the premises.5Texas Comptroller of Public Accounts. Revenue Object 3250 – Mixed Beverage Gross Receipts Tax This one is paid by the business out of its own revenue. You cannot add it to the customer’s bill as a line item. The legal authority is Texas Tax Code Chapter 183, and payment accompanies the monthly return to the Comptroller.6State of Texas. Texas Tax Code 183.023 – Payment
Mixed Beverage Sales Tax (8.25%)
A separate 8.25 percent sales tax applies to each alcoholic drink sold, and this one is charged to the customer.7State of Texas. Texas Tax Code 183.041 – Tax Imposed on Sales of Mixed Beverages and Related Items It covers distilled spirits, beer, wine, and the non-alcoholic mixers used with alcohol on the premises. Permittees may add it as a line item on the bill or build it into the sales price. On receipts, it can appear as a separate charge, combined with the gross receipts tax, or combined with all applicable taxes.8Texas Comptroller of Public Accounts. Mixed Beverage Sales Tax Whichever method you use, what you collect must match what you report.
Failure to report or pay can trigger percentage penalties and, in serious cases, suspension of the mixed beverage permit through a Comptroller referral to the TABC.
If You Only Sell Wine and Beer, the Rules Differ
Not every establishment selling alcohol pays the mixed beverage taxes. Holders of a wine and beer retailer’s permit or a beer retail dealer’s on-premises license pay regular state sales tax on alcohol instead of the 6.7 percent gross receipts tax and the 8.25 percent mixed beverage sales tax.2Texas Comptroller of Public Accounts. Mixed Beverage Taxes A mixed beverage permittee still needs a separate sales tax permit regardless of whether they sell food or other items. The combined mixed beverage burden runs noticeably higher than the standard 6.25 percent state sales tax rate, which is one reason some operators stay with a beer and wine permit.
Monthly Deadlines and Late Penalties
Mixed beverage tax returns are due monthly, by the 20th day of the month following the reporting period, through the Comptroller’s WebFile system or by mail.8Texas Comptroller of Public Accounts. Mixed Beverage Sales Tax The main forms are Form 67-100 for gross receipts and Form 67-103 for sales tax.9Texas Comptroller of Public Accounts. Form 67-103, Mixed Beverage Sales Tax Report Unlike regular sales tax, mixed beverage taxes carry no timely filing discount.10Texas Comptroller of Public Accounts. Mixed Beverage Taxes Frequently Asked Questions
Late payment penalties escalate quickly:
- 1 to 30 days late: 5 percent of the amount due.
- Over 30 days late: 10 percent of the amount due.
- After a formal notice: an additional 10 percent on top, bringing the total to 20 percent.
- Late report fee: $50 for each report filed late, even when no tax is owed.11Texas Comptroller of Public Accounts. Penalties for Past Due Taxes
The $50 late-report fee catches people off guard. A month with zero sales still requires a return. Percentage penalties stack on top, and interest accrues on the unpaid balance.
Federal Excise Tax
Federal excise tax from the TTB sits on top of state taxes and hits manufacturers and importers before product reaches state-level distribution.
Distilled spirits use a tiered structure based on annual production. The first 100,000 proof gallons removed per calendar year are taxed at $2.70 per proof gallon, production between 100,000 and 22.23 million proof gallons at $13.34, and anything above 22.23 million at $13.50.12Alcohol and Tobacco Tax and Trade Bureau. Tax Rates
Small domestic brewers producing two million barrels or fewer per year pay $3.50 per barrel on the first 60,000 barrels and $16.00 per barrel after that. Larger brewers and importers without an assigned reduced rate pay $18.00 per barrel.12Alcohol and Tobacco Tax and Trade Bureau. Tax Rates
Still wine at 16 percent alcohol or less is taxed at $1.07 per wine gallon, 16 to 21 percent at $1.57, and 21 to 24 percent at $3.15.12Alcohol and Tobacco Tax and Trade Bureau. Tax Rates Small producers can offset much of this through the Craft Beverage Modernization Act, which provides a $1.00 credit per wine gallon on the first 30,000 gallons, $0.90 on the next 100,000, and $0.535 on the next 620,000.13Alcohol and Tobacco Tax and Trade Bureau. Craft Beverage Modernization Act (CBMA) These credits were made permanent in 2020.
Federal returns are filed with the TTB, and electronic filing through Pay.gov is recommended. Taxpayers owing $5 million or more in a calendar year must pay by electronic funds transfer.14Alcohol and Tobacco Tax and Trade Bureau. Tax Returns and Operational Reports Due Dates Filing frequency depends on business type and volume.
Recordkeeping
Mixed beverage permittees need detailed logs of gross receipts, daily sales, and inventory records showing all wholesale purchases, with the Texas taxpayer identification number on every filing. Those records should reconcile wholesale purchases against reported sales so the numbers hold up under a Comptroller audit.
At the federal level, manufacturers using tax-free or specially denatured alcohol must keep records for at least three years, including commercial invoices, bills of lading, and copies of formulas filed with the TTB.15eCFR. 27 CFR 17.170 – Retention of Records A practical rule for most Texas operators is to keep anything related to alcohol purchases and sales for at least four years, which covers both the state and federal windows with a margin of safety.