If you’re serving alcohol in Texas, understanding the mixed beverage sales tax Texas enforces isn’t just good business—it’s non-negotiable. With two overlapping taxes (the Mixed Beverage Sales Tax and the Mixed Beverage Gross Receipts Tax), staying compliant requires more than just ringing up drinks. Whether you operate a bar, restaurant, or event venue, these taxes directly impact your pricing, margins, and reporting obligations.
That’s where Hands Off Sales Tax (HOST) comes in. Designed to take the guesswork out of complex sales tax systems, HOST helps beverage businesses streamline compliance, automate filings, and avoid costly errors—so you can pour with confidence.
Understanding Texas Mixed Beverage Taxes
Navigating Texas’s mixed beverage taxation system is essential for businesses serving alcoholic beverages. The state imposes two distinct taxes: the Mixed Beverage Gross Receipts Tax (MBGRT) and the Mixed Beverage Sales Tax (MBST). Understanding the nuances of each is crucial for compliance and accurate financial planning.
A. Mixed Beverage Gross Receipts Tax (MBGRT)
Definition and Purpose
The MBGRT is a tax imposed on the total receipts a permittee earns from the sale, preparation, or service of mixed beverages, including distilled spirits, beer, ale, and wine, as well as ice and nonalcoholic beverages intended to be mixed with alcohol for on-premises consumption.
Current Tax Rate
The MBGRT is levied at a rate of 6.7% on the gross receipts from the aforementioned sales.
Applicability
This tax applies to:
- Sales of alcoholic beverages for on-premises consumption.
- Sales of ice and nonalcoholic mixers intended to be combined with alcohol and consumed on the premises.
Payment Responsibility
The MBGRT is the responsibility of the permittee (the seller). It cannot be passed on to the customer as a separate charge or included in the sales price. The permittee must remit this tax directly to the state.
B. Mixed Beverage Sales Tax (MBST)
Definition and Purpose
The MBST is a tax collected from the customer on each mixed beverage sold, prepared, or served by a permittee, including ice and nonalcoholic beverages intended to be mixed with alcohol for on-premises consumption.
Current Tax Rate
The MBST is levied at a rate of 8.25% on the sales price of the applicable items.
Applicability
This tax applies to:
- Sales of mixed beverages (distilled spirits, beer, ale, and wine) for on-premises consumption.
- Sales of ice and nonalcoholic mixers intended to be combined with alcohol and consumed on the premises.
Collection and Remittance
The MBST is collected from the customer by the permittee at the point of sale. The permittee is then responsible for remitting the collected tax to the state.
C. Key Differences Between MBGRT and MBST
| Aspect | MBGRT | MBST |
| Tax Rate | 6.7% | 8.25% |
| Tax Base | Gross receipts from sales | Sales price of each item |
| Payer | Permittee (seller) | Customer |
| Collection Method | Paid by permittee; not charged to customer | Collected from customer at point of sale |
| Remittance | Remitted by permittee to the state | Remitted by permittee to the state |
| Invoice Disclosure | Cannot be shown as a separate charge to customer | Can be shown as a separate line item or included in sales price |
Understanding these distinctions is vital for permittees to ensure compliance with Texas tax laws and to accurately manage pricing and financial reporting.
Taxable and Non-Taxable Items
Understanding which items are subject to Texas’s mixed beverage taxes is crucial for businesses to ensure compliance and accurate pricing. The taxability often depends on the nature of the item and its intended use.
Taxable Items
The following items are subject to both the Mixed Beverage Gross Receipts Tax (6.7%) and the Mixed Beverage Sales Tax (8.25%) when sold, prepared, or served by a mixed beverage permittee for on-premises consumption:
- Alcoholic Beverages for On-Premises Consumption: This includes distilled spirits, beer, ale, and wine served to customers on the premises.
- Ice and Nonalcoholic Mixers Intended for Mixing with Alcohol: Items such as sodas, juices, and other mixers sold to be combined with alcoholic beverages and consumed on-site are taxable.
Non-Taxable Items
Certain items are exempt from mixed beverage taxes, though they may be subject to other taxes:
- Alcoholic Beverages Sold for Off-Premises Consumption: Sales of sealed alcoholic beverages intended for consumption off the premises are not subject to mixed beverage taxes but are subject to the standard sales and use tax.
- Nonalcoholic Beverages Not Intended as Mixers: Beverages like coffee, tea, or soft drinks sold independently and not intended to be mixed with alcohol are exempt from mixed beverage taxes but may be subject to sales tax.
- Sales to Exempt Entities: Governmental entities and certain nonprofit organizations may be exempt from mixed beverage sales tax when purchasing items for official use. However, these exemptions do not apply to the mixed beverage gross receipts tax.
Properly distinguishing between taxable and non-taxable items ensures accurate tax collection and compliance with Texas tax laws.
Compliance Requirements for Businesses
Navigating the regulatory landscape of Texas’s mixed beverage taxes is crucial for businesses serving alcoholic beverages. Ensuring compliance involves obtaining the appropriate permits, adhering to filing and remittance procedures, and maintaining meticulous records.
Obtaining Necessary Permits
Mixed Beverage Permit (MB)
To legally sell mixed beverages for on-premises consumption in Texas, businesses must acquire a Mixed Beverage Permit (MB) from the Texas Alcoholic Beverage Commission (TABC). The application process can be completed through the Alcohol Industry Management System (AIMS), which is the preferred method due to its efficiency. Alternatively, paper applications are accepted but may result in longer processing times.
Texas Sales and Use Tax Permit
In addition to the MB permit, businesses are required to obtain a Texas Sales and Use Tax Permit from the Texas Comptroller of Public Accounts. This permit is mandatory regardless of whether the establishment sells nonalcoholic beverages, food, or other items. The application can be submitted online via the Texas Comptroller’s website.
Filing and Remittance Procedures
Monthly Reporting Obligations
Mixed beverage permittees are obligated to file monthly reports for both the Mixed Beverage Gross Receipts Tax and the Mixed Beverage Sales Tax. These reports are due on the 20th day of the month following the reporting period.
Payment Methods
Payments can be made electronically through the Texas Comptroller’s Webfile system. Electronic payments must be submitted by 11:59 p.m. Central Time on the due date to be considered timely.
Record-Keeping and Documentation
Importance of Accurate Sales Records
Maintaining accurate and detailed sales records is essential for compliance and audit preparedness. Records should include daily sales summaries, invoices, and receipts for all transactions.
Best Practices for Documentation
- Retention Period: Keep all records for a minimum of four years, as they are subject to inspection by authorized representatives of the TABC or other peace officers.
- Invoice Management: Ensure all alcoholic beverages on the premises are covered by invoices, which must be signed upon delivery and retained on-site.
- Distilled Spirits Identification: All distilled spirits must have an identification stamp affixed to each container. After emptying, the stamp should be mutilated to prevent reuse.
Adhering to these compliance requirements not only ensures legal operation but also fosters trust with customers and regulatory bodies.
Penalties and Interest for Non-Compliance
Adhering to Texas’s mixed beverage tax regulations is crucial for businesses to avoid financial penalties and interest charges. The Texas Comptroller’s Office enforces strict guidelines to ensure timely and accurate tax reporting and payment.
Late Filing Penalties
- A $50 penalty is assessed for each report filed after the due date, regardless of whether any tax is due.
Late Payment Penalties
- If the tax payment is 1–30 days late, a 5% penalty is applied to the unpaid amount.
- If the payment is over 30 days late, the penalty increases to 10% of the unpaid tax.
Interest on Overdue Taxes
- Interest begins to accrue on unpaid taxes 61 days after the due date.
- The interest rate is determined annually and can be calculated using the Comptroller’s Interest Owed and Earned tool.
Consequences of Failing to File Required Reports
- Failure to file the required tax reports can result in the Comptroller estimating the tax due and issuing a Notice of Tax/Fee Due.
- If the report and payment are not submitted within 20 days of the notice, an additional 10% penalty may be assessed on the estimated tax due.
Consistent compliance with filing and payment deadlines is essential to avoid these penalties and interest charges. Utilizing the Texas Comptroller’s Webfile system can help ensure timely submissions and payments.
Let HOST Handle the Heavy Pour of Tax Compliance
Managing mixed beverage sales tax in Texas isn’t just about knowing the rates—it’s about navigating complex regulations, maintaining airtight records, and meeting strict monthly filing deadlines. That’s where HOST (Hands Off Sales Tax) becomes your behind-the-bar tax expert.
HOST helps mixed beverage permit holders—from restaurants and bars to private clubs and venues—stay compliant with confidence. Here’s how:
- End-to-End Setup
HOST registers your business with the Texas Comptroller and ensures you’re set up with all the necessary permits for sales tax. - Accurate Monthly Filings
HOST prepares and files sales tax returns on time, every time. No guesswork, no missed deadlines, and no penalties. - Seamless Integration with Your POS
HOST can pull data directly from your POS system, automating categorization and minimizing manual input errors. - Audit-Ready Recordkeeping
All your reports, tax data, and remittance history are securely stored and organized for future reference—especially helpful if the state comes knocking. - Dedicated Support for Special Cases
Whether you’re serving at a nonprofit fundraiser or handling to-go cocktail kits, HOST ensures you’re applying the right tax rules.
Instead of juggling compliance and customer service, let HOST do the taxing part—so you can focus on serving up great experiences.
Final Pour: Make Compliance One Less Thing to Worry About
Texas’s mixed beverage sales tax system isn’t something you can afford to misunderstand. Between dual tax structures, strict reporting deadlines, and evolving rules around exemptions and to-go sales, the risk of costly errors is real. But it doesn’t have to be overwhelming. HOST takes the complexity out of compliance—handling registrations, filings, and audits with precision and ease. Whether you’re a bar owner, restaurateur, or private club manager, HOST is built to keep your business protected. Ready to simplify your sales tax obligations? Reach out to HOST for a consultation today.
