Bar Owners Skeptical of Texas Comptroller’s Emergency Change in Tax on To-Go Alcohol Sales
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In a surprising move Thursday, the Texas Comptroller’s Office announced that alcohol sold in a curbside or delivery capacity won’t be subject to the mixed beverage tax.
The change was apparently a recognition of the hardships the pandemic and its resulting shutdown have dealt to establishments that make the majority of their sales through liquor rather than food.
While the prospect of lighter taxes on each alcoholic beverage sold is attractive, area bar owners are skeptical that the move is really in their best interests.
“To me, this is just another failed attempt to try and save face by the governor, to make it seem like he’s trying his best to help us,” Squeezebox owner Aaron Peña told the Current. “In reality, they’ve offered no real aid to our sector of hospitality.”
Generally, restaurants with a mixed beverage permit report alcohol sales on two different tax returns, resulting in a whopping 14% tax rate charged to the establishment on every mixed drink they sell.
The comptroller’s adjustment removes the 8.25% mixed beverage sales tax on alcohol served in a to-go capacity, so long as the alcohol is consumed off-premise.
It’s worth noting that the announcement didn’t provide any guidelines for execution of this change, which leaves bar owners to negotiate what they say are unclear guidelines on how they are expected to monitor and report differences in sales of alcohol that occur on- and off-premise.
“How do we [differentiate] what drinks are being sold off-premise?” Peña asked. “They’re just continuing to ask us to learn how to cheat the system to survive instead of actually listening to us and trying to help.”
Back in May, SA bar owner Jeret Peña — no relation to the Squeezebox owner — asked the state to consider placing a temporary suspension on the 6.7% Mixed Beverage Gross Receipts tax, which falls on bar owners to pay. At the time, he cautioned that, without additional tax relief, businesses would fail.
“I’m not talking about permanently,” Peña said of his suspension proposal. “But we’re going to need help. We need to work together in talking to our local representatives in protecting the economy and local business.”
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