Mixed Beverage Sales Tax Audit
If you are a business owner in Texas, chances are that you are on our website because you either have a sales tax audit pending, or you want to prepare yourself for an audit.
Here is our latest Texas Comptroller’s sales tax audit story of a business owner and client in Dallas. A banquet hall owner was levied a tax bill of about $120,000.00, for uncollected sales tax on the sale of mixed beverages and the gross receipts of the rental of their banquet hall.
Here is the rule on Mixed Beverage tax in Texas:
A gross receipts tax is imposed on the amount received from the sale, preparation or service of mixed beverages and from the sale, preparation or service of ice or nonalcoholic beverages that are sold, prepared or served for the purpose of being mixed with an alcoholic beverage and consumed on the premises of the mixed beverage permittee. The mixed beverage gross receipts tax is in addition to the mixed beverage sales tax imposed on the sale or service of alcoholic beverages, ice or mixers.
The mixed beverage gross receipts tax is imposed on the person or organization holding the mixed beverage permit and not the customer. It may not be added to the selling price as a separate charge and may not be “backed out” from the amount received. An amount labeled as a “tax” is fully due to the state, in addition to the mixed beverage gross receipts tax.
A mixed beverage permittee may include on an invoice, receipt or bill:
a separate statement of the amount of mixed beverage tax to be paid by the permittee on the customer’s purchase of alcohol [Example 1]; or
a statement of the combined amount of mixed beverage gross receipts tax paid by the permittee and mixed beverage sales tax imposed on the customer’s purchase of alcohol [Example 2].
Mixed Beverage Gross Receipts Tax Receipt Examples
1. Example of a separate statement of the amount of mixed beverage gross receipts tax to be paid by the permittee on the customer’s purchase of alcohol:
Dbl Cheeseburger 4.75
Fr Fries 2.75
Mexican Martini (2) 7.00
Subtotal 14.50
Sales Tax 0.62
MB Sales Tax 0.58
TOTAL 15.70
Not included in bill: [Business Name]
pays 6.7% tax ($0.47) on this sale of
alcohol.
2. Example of a statement of the combined amount of mixed beverage gross receipts tax paid by the permittee and the amount of mixed beverage sales tax imposed on the customer’s purchase of alcohol:
Dbl Cheeseburger 4.75
Fr Fries 2.75
Margarita frz (2) 7.00
Subtotal 14.50
Sales Tax 0.62
MB Sales Tax 0.58
TOTAL 15.70
Included in bill: Customer pays $0.58 on
this sale of alcohol.
Not included in bill: [Business Name] pays
6.7% tax ($0.47) on this sale of alcohol.
Total amount paid to state on
alcohol $1.05.
The mixed beverage gross receipts tax disclosure statements are for informational purposes only. Mixed beverage gross receipts tax may not be separately charged to, or paid by, the customer and may not be shown as part of the calculation of charges to a customer on the invoice, receipt or bill. This includes any charge labeled a “Tax Reimbursement.”
The Alcoholic Beverage Code authorizes the Texas Alcoholic Beverage Commission to regulate alcoholic beverages, including issuing alcoholic beverage permits and collecting alcohol excise taxes.
Mixed Beverage Sales Tax Audit
Mansoor Ansari J.D., LL.M. (TAX)
