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Texas Alcohol Tax


 Texas Comptroller reminds distilleries to tax sales of alcohol.

Texas is one of approximately 30 states that allows the existence of "dry counties." No sales of alcoholic beverages of any sort are legal in dry counties, which can be confusing for folks from states without dry counties. Confusion aside, there are currently 13 completely dry counties in Texas, and 47 completely wet counties (where sales of alcoholic beverages are allowed). All other counties in Texas contain both wet and dry areas.

Senate Bill 905 amends the Alcoholic Beverage Code and allows a holder of a distiller's and rectifier's permit to:

  • "[S]ell distilled spirits to ultimate consumers" located in a wet area;
  • "[D]ispense free samples or collect a fee for the sampling."

There are, however, a few caveats.

  • Sales may not exceed 3,000 gallons annually on the permitted premises.
  • Up to 3,500 gallons of "unbroken packages containing not more than 750 milliliters of distilled spirits for off-premises consumption" may also be sold each year.
  • No more than two 750 milliliter bottles of distilled spirits or the equivalent may be sold to the same consumer within a 30-day period.
  • The purchaser must be on the permit holder's premises at the time of purchase--a person may not make a purchase as an agent for another person.

Taxes

The Texas Comptroller of Public Accounts reminds in a letter to Distiller's and Rectifier's Permit Holders that "[s]ales of distilled spirits for off-premises consumption are subject to sales and use tax." Sales of distilled spirits consumed on premises, however, are subject to the mixed beverage gross receipts tax.

As explained by the Texas Comptroller:

"The mixed beverage tax is imposed on the person or organization holding the mixed beverage permit and not the customer. It may not be added to the selling price as a separate charge and may not be "backed out" from the amount received. An amount labeled as a "tax" is fully due to the state, in addition to the mixed beverage tax."

The rate of sales and use tax for the state of Texas is 6.25%. Local sales and use taxes can raise the rate by as much as 2%.

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Texas State Rates

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Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.