Houston Alcohol Taxes: What You Need To Know

Alcoholic beverages in Texas are subject to two types of taxes: the mixed beverage gross receipts tax and the mixed beverage sales tax. The former is paid by the seller, while the latter is paid by the customer. The Texas Alcoholic Beverage Commission (TABC) regulates the alcoholic beverage industry in the state, including issuing permits and collecting taxes. Harris County, which includes Houston, has specific rules regarding fees for establishments serving alcohol. These fees are governed by the Texas Alcoholic Beverage Code and are typically equal to one-half of the state permit fee.

Mixed beverage sales tax

Mixed beverage permittees in Texas must collect and remit a mixed beverage sales tax on each mixed beverage they sell, prepare, or serve. This includes distilled spirits, beer, ale, and wine. The mixed beverage sales tax is also due on each non-alcoholic beverage and on ice sold, prepared, or served to be mixed with an alcoholic beverage and consumed on the premises of the mixed beverage permittee.

There are two mixed beverage taxes, both based on the sale, preparation, or service of alcoholic beverages and mixers. The permittee (seller) pays the mixed beverage gross receipts tax to the state, and the customer pays the seller the mixed beverage sales tax, which the seller remits to the state. The gross receipts tax rate is 6.7%, and the sales tax rate is 8.25%. The Texas Alcoholic Beverage Commission (TABC) regulates alcoholic beverages, including issuing permits and collecting alcohol taxes.

In Texas, the governing body of a city or town may levy and collect a fee not exceeding one-half of the state fee for each license issued for premises located within the city or town. Harris County, which includes Houston, follows this structure for establishments serving beer and wine. For liquor licenses, the county fee is equal to one-half of the state permit fee.

Nonprofit organizations that qualify for exemption from sales and use tax may sell alcoholic beverages tax-free during a qualifying fundraising sale or auction authorized by the Texas Tax Code. However, the purchase of alcohol does not normally relate to the purpose of an exempt organization, so most sales to nonprofit organizations are not exempt from mixed beverage sales tax.

Mixed beverage gross receipts tax

The Texas Alcoholic Beverage Commission (TABC) regulates the alcoholic beverage industry in the state and is responsible for issuing permits and collecting taxes. In Harris County, which includes Houston, the collection of fees for establishments serving alcohol is governed by specific provisions in the Texas Alcoholic Beverage Code. These provisions allow the governing body of a city or town to levy and collect fees for licenses and permits, with a limit of not exceeding one-half of the state fee.

Nonprofit organizations that qualify for exemption from sales tax under Texas Tax Code may sell alcoholic beverages tax-free during qualifying fundraising events. However, the purchase of alcohol does not typically relate to the purpose of an exempt organization, so most sales to nonprofit organizations are subject to the mixed beverage gross receipts tax.

The mixed beverage gross receipts tax is separate from the mixed beverage sales tax, which is paid by the customer. The sales tax rate is 8.25% and can be added as a separate line item on the customer's bill or included in the sales price of the beverage. The two tax rates combined result in a total tax amount of 14% on alcoholic beverages, which is paid to the state of Texas.

Alcoholic beverage permits

The Texas Alcoholic Beverage Commission (TABC) regulates the alcoholic beverage industry in Texas and is responsible for issuing alcoholic beverage permits and collecting alcohol taxes. The TABC's Licensing Division offers support to customers across the alcoholic beverage industry, processing close to 100,000 licenses and permits each year.

There are different types of TABC licenses and permits, including:

• Out-of-State Winery Direct Shipper's Permit (DS): This permit authorises out-of-state wineries to sell and ship wine to Texas-based TABC license or permit holders who are authorised to import these beverages into Texas.
• Brewer's License (BW): This license authorises the holder to manufacture, import, transport, and sell malt beverages within Texas. It also allows the holder to conduct free tastings for consumers at certain events.
• General Distributor's License (BB): This license authorises the distribution of malt beverages, including the authority to import and transport products within Texas.
• Branch Distributor's License (BC): This license is similar to the BB license but is specific to branch offices of distributors.
• Distiller's License: This license authorises the holder to manufacture, rectify, purify, refine, or mix distilled spirits and wines. It includes the authority to transport and store alcoholic beverages, as well as sell them to consumers under certain conditions.

TABC also offers temporary permits and provides resources to help businesses understand their licensing and permitting needs. The fees for alcoholic beverage permits in Houston, Harris County, are governed by the Texas Alcoholic Beverage Code. The county fee is equal to half of the state permit fee. Applications for beer and wine licenses can be obtained from the TABC, and the local TABC office can provide guidance on the permitting process.

In addition to the permit fees, there are taxes on alcoholic beverages in Texas. Mixed Beverage permit holders pay two taxes on alcohol: the mixed beverage gross receipts tax and the mixed beverage sales tax. The former is paid by the seller, while the latter can be passed on to the customer as a separate line item on the bill. The combined taxes result in an 8.25% tax rate on alcoholic beverages, with 6.7% included in the sales price and the remaining 1.55% itemised separately. These taxes are applicable to all mixed beverages, including distilled spirits, beer, ale, and wine, and even non-alcoholic beverages served with the intent to be mixed with alcohol.

Alcoholic beverage tax exemptions

In Texas, alcoholic beverages are defined as any beverage containing more than 0.5% alcohol by volume. The Texas Alcoholic Beverage Commission (TABC) regulates the alcoholic beverage industry in the state, issuing permits and collecting taxes. There are two types of mixed beverage taxes in Texas: the mixed beverage gross receipts tax and the mixed beverage sales tax.

The mixed beverage gross receipts tax is paid by the permit holder (seller) to the state, and is based on the total amount received from the sale, preparation, or service of mixed beverages. The current rate is 6.7%.

The mixed beverage sales tax, on the other hand, is paid by the customer to the permit holder, who then remits it to the state. This tax can be added to the price of the alcoholic beverage or included in the selling price. The current rate is 8.25%.

While there are no exemptions from the mixed beverage gross receipts tax, certain nonprofit organizations that qualify for exemption under Texas Tax Code Sections 151.310 and 151.321 may be exempt from paying the mixed beverage sales tax on alcoholic beverages during a qualifying fundraising sale or auction. These organizations typically include religious, educational, and public service groups, as well as university and college student organizations.

In Harris County, which includes Houston, the collection of fees for establishments serving alcohol is governed by specific sections of the Texas Alcoholic Beverage Code. The governing body of a city or town may levy and collect fees for licenses and permits, but these fees cannot exceed one-half of the state fee.

Alcoholic beverage tax penalties

In Houston, Texas, alcoholic beverage taxes are governed by Title 3, Subtitle B - Chapter 61, Subchapter A - Section 61.36 of the Texas Alcoholic Beverage Code. This code outlines the fees and permits required for establishments serving alcoholic beverages. The Texas Alcoholic Beverage Commission (TABC) regulates alcoholic beverages, including issuing permits and collecting alcohol taxes.

There are two main types of alcoholic beverage taxes in Houston: the mixed beverage gross receipts tax and the mixed beverage sales tax. The mixed beverage gross receipts tax is paid by the permit holder (seller) to the state, and it is based on the total amount received from the sale, preparation, or service of mixed beverages. This includes ice and non-alcoholic beverages that are intended to be mixed with alcohol. The current rate for this tax is 6.7%.

On the other hand, the mixed beverage sales tax is paid by the customer to the seller, who then remits it to the state. This tax can be added as a separate line item on the customer's bill or included in the sales price of the alcoholic beverage. The rate for this tax is 8.25%.

Permit holders who fail to file their tax reports or pay their taxes on time are subject to penalties. If a report is filed after the due date, a $50 penalty is assessed for each late report. If the tax is paid 1-30 days late, a 5% penalty is applied, and if it is paid over 30 days late, the penalty increases to 10%. Past due taxes also accrue interest starting from 61 days after the due date.

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