Government
3:30 pm
Thu January 2, 2014

Thanks To New Law, You Will Be Paying More For Mixed Drinks In Texas

Starting Jan. 1, 2014, the state will lower how much they charge bars and restaurants with the Texas Mixed Beverage Tax, which decreased from 14 percent down to 7 percent, but those purchasing a mixed drink will face a new surcharge of 8.25 percent, the same tax that is charged for the sale of beer and wine.

Austin businessman Bob Woody, who owns a restaurant, five brewpubs and a bar, said the new law will greatly benefit lounges and restaurants because the bill directly shows the new surcharge, but it may be problematic for high-volume bars.

"A high volume bar where there’s transactions taking place very quickly, several thousands in a night, on a weekend it's very difficult to consider the benefit to high-volume bars, so ultimately the customer is paying that tax," Woody said.

Woody said many bar owners are adding the new surcharge and tax to the price of a drink, but it’s not something he thinks customers will take notice.

"These transactions in the busier places where you come and say, 'Hey can I get two beers and two shots?' for example, its not where you present them a bill and they scrutinize on how they are going to pay, it’s more like, 'Here’s a $20 and here’s your change,'" Woody said.

He points out that the new law is still a tax increase at heart:

"It doesn’t have a positive effect, in my opinion, on the bars," Woody said. "I think it’s just an increase in cost. And it’s not tax neutral -- I’m really tired of hearing that -- it’s a full percent increase, almost a full percent increase in tax."

Supporters of  House Bill 3572 describe the new law as an attempt to reduce hidden taxes and lessen the parity between businesses that sell only beer and wine and those that also sell liquor.