Texas Alcohol Taxes: What Bars Pay vs What Stores Pay (Current Rates)
A drink at a Texas bar is taxed differently than a bottle from a store. Bars with a Mixed Beverage Permit pay a 6.7% mixed beverage gross receipts tax and collect an 8.25% mixed beverage sales tax from customers. Stores collect regular sales tax: 6.25% state plus up to 2% local. Excise taxes are built into the price before either one sees it.
Current Texas alcohol tax rates
| Tax | Rate | Who pays it | Applies to |
|---|---|---|---|
| Mixed beverage gross receipts tax | 6.7% of gross receipts | The bar, out of its own revenue | Alcohol served on site by MB, private club, NT and distiller permit holders |
| Mixed beverage sales tax | 8.25% | The customer, collected by the bar | The same on-site drinks, plus ice and mixers served with them |
| Sales tax | 6.25% state, up to 2% local (8.25% max) | The customer, collected by the store | Alcohol sold to go, and beer and wine at places without a mixed beverage permit |
| Excise taxes | Per gallon (below) | Distributors, wholesalers and manufacturers | Every gallon sold to a retailer, passed along in the price |
Excise tax rates
| Class | Rate | Works out to about |
|---|---|---|
| Distilled spirits | $2.40 per gallon | 47 cents per 750 mL bottle |
| Spirits in miniatures (20 to 60 mL) | 5 cents per container | |
| Wine, 14% alcohol or less | $0.204 per gallon | 4 cents per 750 mL bottle |
| Wine, over 14% alcohol | $0.408 per gallon | 8 cents per 750 mL bottle |
| Sparkling wine | $0.516 per gallon | 10 cents per 750 mL bottle |
| Malt beverages (beer) | $0.193548 per gallon | 2 cents per 12 oz can |
TABC collects excise taxes from the businesses that sell to retailers. Most bars and stores don't file them, but the tax is part of what they pay for their inventory.
$100 of drinks at a bar vs $100 at a store
| Bar with an MB permit | Store selling to go | |
|---|---|---|
| Tax the customer pays | $8.25 mixed beverage sales tax | Up to $8.25 sales tax, depending on the city |
| Tax the business pays on top | $6.70 gross receipts tax | None |
| Total to the State on the sale | $14.95 | Up to $8.25 |
The 6.7% comes out of the bar's own revenue; the law doesn't allow adding it to or deducting it from the price of the drink. The math above assumes the bar adds sales tax on top of its menu prices. Bars can instead build the 8.25% into their prices, but they have to pick one method and stick with it.
Details that trip people up
- Beer and wine at a BG restaurant aren't subject to mixed beverage taxes, because a BG isn't a mixed beverage permit. Those sales collect regular sales tax.
- Beer and wine at an MB bar are. Once a business holds a Mixed Beverage Permit, every on-site alcohol sale owes both mixed beverage taxes, even at catered events serving only beer and wine.
- To-go and delivery from a bar, including unopened wine, are taxed as regular sales, not mixed beverages.
- Bartender and server fees for serving alcohol are taxable under both mixed beverage taxes, even when the customer supplies the alcohol.
- Mandatory gratuities up to 20% that go to service staff aren't taxed. Above 20%, the whole charge is.
- Local share: there's no local mixed beverage tax, but cities and counties get back at least 10.7143% of the mixed beverage taxes collected from businesses within them.
- Filing: bars file both mixed beverage reports monthly, due the 20th of the following month. The gross receipts report is the one that becomes the public sales data.
See what any Texas bar reports in alcohol sales each month. Search Bar Sales IQ
Sources: Texas Comptroller Mixed Beverage Taxes FAQ · Texas Comptroller Sales and Use Tax · TABC Alcohol Excise Taxes. This guide explains what public records show; it isn't legal advice. Check with TABC before acting on a licensing question.
Questions
What is the mixed beverage tax rate in Texas?
There are two: a 6.7% mixed beverage gross receipts tax paid by the business, and an 8.25% mixed beverage sales tax paid by the customer.
Do Texas bars charge sales tax on drinks?
Bars with a Mixed Beverage Permit charge an 8.25% mixed beverage sales tax on drinks served on site, and also pay a separate 6.7% gross receipts tax themselves.
What is the sales tax on alcohol bought at a Texas store?
Regular sales tax: 6.25% state plus up to 2% local, for a maximum of 8.25%.
What is the Texas excise tax on liquor?
$2.40 per gallon of distilled spirits, about 47 cents per 750 mL bottle. Beer is about $0.19 per gallon and wine $0.204 to $0.516 per gallon depending on type.