The Texas mixed beverage gross receipts tax is a 6.7 percent tax on every dollar a permitted business earns from selling, preparing, or serving alcoholic drinks for on-premises consumption. The business pays it out of its own revenue, files monthly with the Texas Comptroller, and cannot pass it through to customers on the receipt. It’s governed by Chapter 183 of the Texas Tax Code.
Who Owes the Tax
The tax falls on holders of specific permits issued by the Texas Alcoholic Beverage Commission. Under the rules implementing Chapter 183, “permittee” covers holders of a mixed beverage permit, private club registration permit, private club exemption certificate permit, nonprofit entity temporary event permit, and distiller’s and rectifier’s permit. It also covers those permits when paired with add-on certificates like a late hours certificate or food and beverage certificate.1Legal Information Institute. 34 Texas Admin Code 3.1001 – Mixed Beverage Gross Receipts Tax The definition reaches any agent, servant, or employee of the permit holder who handles alcohol operations.
If you hold one of these permits and serve alcoholic drinks on your premises, you owe the tax no matter how small your sales. There’s no minimum revenue threshold.
What Counts as Taxable Gross Receipts
The 6.7 percent applies to your total gross receipts from selling, preparing, or serving mixed beverages on the premises. Every beer, glass of wine, cocktail, and shot of liquor. It also covers ice and nonalcoholic beverages when they’re sold as part of a drink that will be mixed with alcohol and consumed on-site.2State of Texas. Texas Tax Code 183.021 – Tax Imposed on Gross Receipts of Permittee From Mixed Beverages
Complimentary Drinks
Giving drinks away doesn’t erase the tax. Complimentary alcoholic beverages must be valued at the price the business would normally charge a paying customer, and that amount goes into taxable gross receipts. Comping rounds doesn’t reduce your liability.
Cover Charges
Cover charges and door fees generally stay out of your mixed beverage gross receipts. You only report a cover charge as taxable if the TABC has specifically determined the charge violates its rules. Absent that kind of notice, cover charges don’t go on the return.3Texas Comptroller of Public Accounts. Mixed Beverage Tax Return
You Cannot Add the Tax to a Customer’s Bill
Section 183.0212 of the Tax Code flatly prohibits adding the gross receipts tax to the sales price of an alcoholic beverage or deducting it from the price.4Texas Comptroller of Public Accounts. Mixed Beverage Taxes Frequently Asked Questions It cannot appear as a separate line item on a tab. The tax comes out of your revenue. If you want to account for it, build it into your drink pricing, but don’t itemize it on receipts.
How the Gross Receipts Tax Differs From the Sales Tax
Texas imposes two separate taxes on mixed beverage sales, and confusing them is one of the most common mistakes operators make. The gross receipts tax at 6.7 percent is the permittee’s obligation, paid from business revenue.2State of Texas. Texas Tax Code 183.021 – Tax Imposed on Gross Receipts of Permittee From Mixed Beverages The mixed beverage sales tax at 8.25 percent is imposed on the consumer and collected by the permittee at the point of sale.5State of Texas. Texas Tax Code 183.041 – Tax Imposed on Sales of Mixed Beverages and Related Items Both go to the Comptroller, but they’re separate obligations with separate reporting lines.
The sales tax works the way any other Texas sales tax does: the customer pays it, the business remits it. The gross receipts tax has no everyday equivalent, which is why it catches new permit holders off guard.
No Exemptions
Entities that are normally exempt from Texas sales tax under Sections 151.309 and 151.310 of the Tax Code, including government agencies and certain nonprofits, must still report and pay the mixed beverage gross receipts tax.6Texas Comptroller of Public Accounts. Mixed Beverage Sales Tax Exemptions that apply to ordinary retail sales tax don’t carry over. Hold a mixed beverage permit, serve alcohol, owe 6.7 percent.
Filing Deadlines and Payment
Returns are due monthly. File and pay by the 20th day of the month following the reporting period.6Texas Comptroller of Public Accounts. Mixed Beverage Sales Tax January activity is due February 20. There’s no quarterly or annual option.
The Comptroller accepts returns through its online Webfile system or on paper using Form 67-100 (Texas Mixed Beverage Gross Receipts Tax Report). Your filing method depends on how much tax you paid in the preceding state fiscal year (September 1 through August 31):
- Under $50,000: Webfile or paper.
- $50,000 or more: Webfile only.
Payments go through electronic funds transfer, credit card, or a check mailed with a paper return. Electronic filing generates a confirmation number that serves as your proof of compliance for the month. Keep it.
Security Bonds Before You Open
Before you start pouring, you need to post two separate surety bonds with the Comptroller, one securing the 6.7 percent gross receipts tax and one securing the 8.25 percent sales tax. These sit on top of any conduct surety bond the TABC requires for your permit.
Bond floors for new permittees run from $1,500 to $3,750 depending on the permit type, with a ceiling of $100,000. After you build a track record, your bond is set at four times your monthly average tax liability if that figure exceeds the minimum for your permit type.7Texas Comptroller of Public Accounts. Security Bonds for Texas Mixed Beverage Taxpayers
Penalties for Late Filing and Payment
Penalties escalate quickly:
- 1 to 30 days late: 5 percent of the tax due.
- More than 30 days late: 10 percent of the tax due.
- After receiving a Notice of Tax Due: another 10 percent, bringing the total to 20 percent.
Every late return also triggers a flat $50 penalty, even if you owe zero tax for the period.8Texas Comptroller of Public Accounts. Penalties for Past Due Taxes Interest starts accruing on the 61st day after the due date at a variable rate the Comptroller sets each January.
Records and Audits
Keep all records related to your mixed beverage operations for at least four years. That means daily sales summaries, point-of-sale reports, purchase invoices from distributors, inventory tracking logs, and bank statements that reconcile with reported receipts.1Legal Information Institute. 34 Texas Admin Code 3.1001 – Mixed Beverage Gross Receipts Tax If an administrative hearing or judicial proceeding is pending, hold the records through the end of the process, even if that runs past four years.
The Comptroller’s audit window matches. The state has four years from the date a tax becomes due and payable to assess a deficiency.9Legal Information Institute. 34 Texas Admin Code 3.339 – Statute of Limitations The most common audit red flag is a mismatch between reported gross receipts and what your purchase invoices suggest you should have sold.
Deducting the Tax on Your Federal Return
The gross receipts tax is a state tax directly attributable to your business operations, which makes it deductible as an ordinary business expense on your federal income tax return. Sole proprietors deduct it on Schedule C (Form 1040). Partnerships, S corporations, and C corporations deduct it on their respective business returns.10Internal Revenue Service. Publication 334, Tax Guide for Small Business The deduction applies only to the gross receipts tax you pay from your own revenue, not to the sales tax you collect from customers and remit, since that money was never your income.