Lena Savoie
Alcoholic beverage taxes in Oklahoma have existed since the prohibition was repealed in 1933 for low-alcohol beverages and 1959 for other alcoholic beverages. Beer, wine, and liquor are taxed at rates between one-half cent and two cents per ounce. In addition to the wholesale tax, there is a 13.5% tax on mixed drinks served at bars and restaurants. The various alcoholic beverage taxes are divided differently among different governments. The state general revenue fund gets all of the low-alcohol beer tax and the mixed drink tax and approximately two-thirds of the other beverage taxes. The price of all alcohol sold in Oklahoma also includes federal alcohol excise taxes, which are collected from the brewer/distiller by the Alcohol and Tobacco Tax and Trade Bureau.
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What You'll Learn
Excise tax on alcoholic beverages
In Oklahoma, an excise tax is levied on all alcoholic beverages imported, manufactured, sold, used, distributed, or possessed in the state. This includes beer, wine, spirits, and sparkling wine. The rates for this excise tax are as follows:
- $1.47 per liter for spirits
- $0.19 per liter for wine
- $0.55 per liter for sparkling wine
- $12.50 per barrel (31 gallons) for beer
Beer manufactured in Oklahoma for export is exempt from this tax. The excise tax on wine and spirits is typically collected and remitted by Oklahoma wholesalers or wineries, depending on the distribution method. These taxes are included in the retail price of the beverage and paid to the Oklahoma Alcoholic Beverage Laws Enforcement Commission (ABLE Commission).
In addition to the excise tax, there is also a 13.5% mixed beverage tax on all sales of liquor, wine, and beer in Oklahoma. This tax applies to both on-premises consumption and, following the Cocktails-to-Go Act, off-premises consumption in sealed containers. The mixed beverage tax also applies to complimentary drinks and is separate from the sales tax, which some customers may be exempt from with a valid permit.
Oklahoma's alcoholic beverage taxes have a history dating back to the repeal of prohibition in 1933 for low-alcohol beverages and 1959 for other alcoholic drinks. The rates were last raised in 1987, and the taxes are divided among different levels of government, with the state general revenue fund receiving all of the low-alcohol beer tax and approximately two-thirds of the other beverage taxes.
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Federal alcohol excise taxes
Alcohol excise taxes are one of the oldest taxes in the US, with the federal government levying its first whiskey tax in 1791, predating the ratification of the Bill of Rights. Excise taxes are designed to increase market prices and decrease legal consumption, thereby reducing alcohol-related externalities such as drunk driving, violence, and property damage. Additionally, these taxes generate revenue that can be used to fund anti-addiction programs, enforce sober driving, and support education initiatives.
The differential tax treatment of various alcohol products has been criticized for creating incentives that may detract from the development of new and better products. Additionally, production subsidies meant to counter the effects of differential tax rates often benefit only a select few producers. The controversy surrounding cover-over revenues, which involve returning federal excise taxes to territories like Puerto Rico and the USVI, is linked to the debate over subsidies provided to rum producers in these regions.
In Oklahoma, alcoholic beverage taxes have been in place since the repeal of Prohibition in 1933 for low-alcohol beverages and 1959 for other alcoholic drinks. The rates were last raised in 1987. Beer, wine, and liquor are taxed at rates between one-half and two cents per ounce, with these taxes included in the retail price. Wholesalers pay these taxes to the Oklahoma Alcoholic Beverage Laws Enforcement Commission. In addition to the wholesale tax, there is a 13.5% tax on mixed drinks served at bars and restaurants. The various alcoholic beverage taxes are distributed among different levels of government, with the state general revenue fund receiving all of the low-alcohol beer tax, the mixed drink tax, and about two-thirds of the other beverage taxes. The remaining taxes are allocated to counties and cities based on their population.
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Sales tax exemptions
In Oklahoma, all sales of liquor, wine, and beer are subject to a 13.5% mixed beverage tax. This is in addition to any admission charges that include a complimentary mixed drink. However, customers who present a valid sales tax exemption permit are exempt from paying sales tax on their alcoholic beverage purchases. It is important to note that these exempt customers are still subject to the mixed beverage tax on their purchases.
The state of Oklahoma levies a franchise tax on corporations that do business within its borders. This franchise tax is calculated at a rate of $1.25 for every $1,000 of capital invested or used in the state. Additionally, foreign corporations are assessed an extra $100 per year, which is payable to the OTC (Oklahoma Tax Commission) with the Oklahoma Secretary of State acting as their registered agent.
Oklahoma's alcoholic beverage taxes have been in place since the prohibition was repealed in 1933 for low-alcohol beverages and 1959 for other alcoholic beverages. The rates were last raised in 1987. Beer, wine, and liquor are currently taxed at rates ranging from one-half cent to two cents per ounce. Wholesalers pay these taxes to the Oklahoma Alcoholic Beverage Laws Enforcement Commission, and the taxes are included in the retail price of the beverages.
In addition to the wholesale tax, there is a 13.5% tax levied on mixed drinks served at bars and restaurants. The distribution of these alcoholic beverage taxes varies among different governments. The state general revenue fund receives all of the low-alcohol beer tax and the mixed drink tax, along with approximately two-thirds of the other beverage taxes. The remaining portion of the taxes is allocated to counties and cities based on their share of the state's population.
Oklahoma's tax laws also address on-premises licenses and sales restrictions. For instance, on-premises Sunday sales may be prohibited or restricted by voters in each county. As of the time of writing, 13 counties have restricted on-premises Sunday sales, while five counties prohibit them entirely. Additionally, movie theaters are permitted to obtain a mixed beverage license, provided that patrons under 21 are not allowed to enter.
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Mixed beverage tax
In Oklahoma, there is a 13.5% mixed beverage tax on the sale of liquor, wine, and beer. This is in addition to any admission charges that include a complimentary mixed beverage. This tax is included in the retail price of the beverage and is paid by wholesalers to the Oklahoma Alcoholic Beverage Laws Enforcement Commission (ABLE Commission).
The mixed beverage tax applies to all alcoholic beverages served at bars and restaurants, including mixed drinks and complimentary drinks. It is important to note that customers who present a valid sales tax exemption permit are exempt from paying sales tax on their purchase of alcoholic beverages, but they are still subject to the mixed beverage tax.
The gross receipts tax, also known as the mixed beverage tax, is levied on the total retail sale price of mixed beverages, ice, and non-alcoholic beverages intended to be mixed with alcoholic beverages. This tax is listed separately on customer receipts and applies to on-premises consumption, excluding catered events, public events, and special events.
The legislation, known as the cocktails-to-go act or House Bill 2122, allows establishments with Mixed Beverage Licenses to sell "cocktail, mixed drink, or single-served wine" in a "sealed container" for off-premises consumption. To obtain a mixed beverage license, the licensee must have a full kitchen, sell food from a full menu, and maintain gross sales of at least 35% on food per month.
In addition to the state taxes, the price of alcohol in Oklahoma includes federal alcohol excise taxes, which are generally passed on to the consumer. These taxes are collected by the Alcohol and Tobacco Tax and Trade Bureau from the brewer or distiller. Some tax discounts are available for small brewers.
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On-premises licences
In Oklahoma, alcoholic beverages are taxed at rates between one-half and two cents per ounce. Wholesalers pay these taxes to the Oklahoma Alcoholic Beverage Laws Enforcement Commission (ABLE Commission), and they are included in the retail price of the beverage. In addition to the wholesale tax, there is a 13.5% tax on mixed drinks served at bars and restaurants.
When it comes to on-premises licences, there are a few things to consider. Firstly, licenses differ based on the type of alcohol you intend to sell and where you want to sell them. For on-premises sales, common licenses include:
- Retail license: This allows you to sell beer, wine, or spirits. If your retail store is incorporated, you will need to provide a Certificate of Incorporation.
- Low point beer license: Issued for the sale of beverages containing more than one-half of one percent (1/2 of 1%) alcohol by volume and not more than three and two-tenths percent (3.2%) alcohol by weight. Ensure that your property is properly zoned for low-point beer sales.
- Employee license: Required for each employee selling or serving alcoholic beverages. Servers must be at least 18 years old for selling beer and wine and 21 years old for mixed beverages.
The initial fee for an on-premise beer and wine license is $500, while a license for retail spirits is $1,005. A certificate of compliance is required for all Oklahoma liquor license applications, and you must ensure compliance with Oklahoma City codes relating to zoning, fire, safety, and health. The approval time for your license depends on the type of license and the completeness of your supporting documentation.
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Frequently asked questions
There is a 13.5% sales tax on mixed drinks served at bars and restaurants in Oklahoma. Beer, wine, and liquor are taxed at rates between one-half cent and two cents per ounce. There is also an excise tax on all wine and spirits collected by the Oklahoma wine and spirits wholesaler.
Alcoholic beverage taxes have been charged in Oklahoma since the prohibition was repealed in 1933 for low-alcohol beverages and 1959 for other alcoholic beverages. The rates were last raised in 1987.
A mixed beverage licensee must have a full kitchen on its premises, sell food items from a full menu, and maintain gross sales of food of at least 35% per month to be designated as a Type-II establishment.
