What should a Texas restaurant track for sales tax and mixed beverage tax?
Texas restaurants and bars with liquor licenses deal with three separate taxes that require distinct tracking. Getting these mixed up creates problems at filing time and during audits.
Regular Texas sales tax applies to prepared food and non-alcoholic beverages. The state rate is 6.25%, and local taxes typically bring the total to 8.25% in the Greater Houston area including The Woodlands. This is straightforward. Charge it to customers, track it separately from revenue, and remit it to the Comptroller.
Mixed beverage sales tax is a separate 6.25% tax on alcoholic beverages sold for on-premise consumption. This applies to liquor, beer, and wine sold by the drink at your restaurant or bar. You collect this from customers just like regular sales tax, but it gets reported on a different form. Your POS system needs to distinguish alcohol sales from food sales so you can calculate this correctly.
Mixed beverage gross receipts tax is where things get different. This is a 6.7% tax calculated on your gross receipts from alcohol sales, and it comes out of your revenue rather than being collected from customers. Your total alcohol sales for the month determine what you owe, regardless of what you charged customers. Many restaurant owners miss this because they assume all taxes get passed to customers.
Your POS system should separate food sales from alcohol sales at minimum. Restaurants and bars that run everything through one category end up reconstructing sales data manually at month end. Set up your menu items correctly from the start so every transaction automatically lands in the right bucket.
Track daily sales by category and keep records of alcohol purchases for verification. The Comptroller can compare your alcohol purchases to your reported sales to check if the numbers make sense. Large discrepancies between what you bought and what you reported selling will trigger questions.
Filing happens on different schedules. Regular sales tax uses Form 01-114 with monthly, quarterly, or annual filing depending on your volume. Mixed beverage taxes use Form 67-100 and are due monthly by the 20th of the following month. Miss that date and penalties start immediately.
In your accounting software, track sales tax collected and mixed beverage sales tax collected as liabilities. The gross receipts tax should be recorded as an expense since it reduces your profit rather than flowing through from customers. Business tax preparation for restaurants requires understanding these distinctions so nothing gets misclassified on your return. Clean tracking throughout the year makes tax time much simpler than trying to sort out a year of combined data in March.
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