When serving alcohol in Texas, business owners must obtain a Texas alcoholic beverage license. Failing to do so could result in serious legal charges. There are several qualifications that need to be met to obtain a license.

How To Qualify

To qualify for a Houston alcoholic beverage license, an applicant must be at least 21 years of age. In addition to this, these criteria must be met:

• The applicant must not have any felony convictions within the past five years.
• The applicant must not have violated state liquor laws within the past two years.
• The applicant must not have any moral turpitude violations of liquor laws within the past six months.

For on-premise alcohol permits, business owners must provide verification from the city clerk that their business is in a zone where alcohol can be served and has late-hour operations. People who plan to serve only beer or wine will have to provide verification of alcohol content for their beverages. For off-premise permits, applicants must obtain verification forms and a list of approved areas from the city clerk. In addition to this, public notice must be published in a local newspaper. There are also other requirements for temporary permits for off-site events, which are usually granted to business owners who currently hold liquor licenses. Some types of events may not require licenses if they provide free alcohol to adults.

How To Apply

Most business owners who plan to serve alcohol on a daily basis apply for a license through the local sheriff’s department. There are over 20 different types of licenses available from the Texas Alcoholic Beverage Commission, so it is important to choose the right type. For example, a person who is looking for a Texas beer license just to sell beer at an event would not need the same type of permit a person serving cocktails in a restaurant would need. After obtaining the right forms, an applicant must fill out all of the information correctly. Mistakes will usually bring delays. Applications are taken to the Texas State Controller’s Office, and the information must also be turned in to the local City Secretary. Following this step, the TABC must be contacted to perform a background and eligibility check. An interview will be conducted, and the applicant will be notified when to appear before a judge for a hearing. If the application is approved by the judge, the applicant must pay the required taxes and wait for the TABC to issue a permit.

Many people mistakenly assume that obtaining a liquor license is a process that involves filing a few forms and paying a fee. The process is much more complex and much more serious, so it is important to make sure there are no mistakes made. Businesses planning to open are usually in a time crunch, and this can add even more stress to the preparations for a grand opening. The best way to get through the process without major hassles is to hire a Houston liquor license service company.

A Texas license service provider knows all of the local and state laws for obtaining all of the different types of licenses and permits offered by the TABC. The service provider knows what to write on the forms, where to file them and how to deliver efficient and effective results. Many people make the mistake of filling out the wrong types of forms when applying for licenses on their own, but a liquor license service will make sure the correct forms are used. Investing in a license service is well worth avoiding the headache of losing money, delaying and opening or canceling a special event while waiting on a license.

Recent action by the Texas Alcoholic Beverage Commission (TABC) has led to outrage on social media sites and planned legal action by a number of craft beer establishments in the state. The controversy arose over the sale of crowlers, 32-ounce cans filled and seamed on site by retailers of craft beer products. While hand-sealed glass containers, also known as growlers, are legal in Texas, the TABC has deemed that the machine-sealed crowlers are in violation of Texas regulations. Seven establishments received warnings that they could lose their TABC permit; of those, three are located in the Houston area.

Canned Beer on Trial

Traditional glass growlers have been a preferred way to transport craft beer from brewery to home for generations. These large glass bottles typically hold between 32 and 64 ounces and are reusable, making them a cost-effective choice for consumers and purveyors alike. By contrast, crowlers are a relatively new technology that has gained in popularity in recent years. These 32-ounce cans can be filled and sealed through the use of a relatively inexpensive machine. Crowlers can be recycled and are preferred by many companies and consumers. Unfortunately, the TABC views crowlers as a canned product and maintains prohibitions against illegal canning. Only breweries with a license specifically for manufacturing are allowed to can beer in the state of Texas.

Taking on the TABC

The most visible company in this controversy is Cuvee Coffee Bar in Austin, which has announced its intention to protest the law. Cuvee employees continued to serve crowlers to customers even after repeated warnings from the TABC. This civil disobedience finally resulted in the seizure of the canning equipment by TABC officials and the issuance of an administrative violation to the owners. Cuvee is expected to contest this violation and to lobby for a change in the laws currently in place.

A Distinction Without a Difference

Craft breweries and pubs arguing for a change in the current law note that there is fundamentally no difference between the beer sold in glass growlers and those served in aluminum crowlers. In fact, the beer sold in crowlers may stay fresher longer thanks to the limited amount of oxygen that reaches the contents of these cans. Restricting one type of container while allowing another has led to a certain amount of confusion within the brewpub industry and has generated accusations that TABC regulations are antiquated and need overall reform.

Companies at Risk

Breweries, brewpubs and bars that violated the crowler ban may be at risk of losing their Texas beer license if they continue to sell these containers. The seizure of the Cuvee Coffee Bar crowler equipment has also had a chilling effect on the number of businesses willing to violate TABC regulations on behalf of their customers. While the manufacturer is offering to buy back the crowler sealing and packaging machines they sold to Texas establishments, the loss in potential revenues for this popular product cannot be easily recouped by most brewpubs and breweries.

More Legal Challenges to Come

Craft beer companies are also expected to challenge the TABC prohibition on selling to-go beer directly from breweries. Past attempts to overturn this part of Texas law have been met with implacable opposition from large beer manufacturers and wholesalers due to the added competition that these small-scale breweries would pose to their sales. Despite this opposition, however, several pubs have indicated that they intend to pursue this challenge to current TABC regulations in the upcoming year.

For most bar owners, maintaining a Texas liquor license and remaining in compliance with all TABC rules and regulations is critical to ongoing success and profitability in the competitive marketplace. Working with a firm that specializes in helping Houston businesses manage the application process for their TABC licenses can provide added guidance in navigating the current rules applicable to drinking establishments in the state of Texas.

Texans who enjoy cracking open a can of Lone Star beer or sampling the latest craft brews are not alone. For more than 160 years, Texans have supported the state’s vibrant beer industry. Today, we are in the middle of a microbrewing renaissance that began more than 20 years ago. It all started in 1978 when former President Carter paved the way by allowing home brewers to partake in the craft without a Texas beer license. This decision has helped the industry come full circle going from local breweries to corporate conglomerates and back to microbrewing.

Although craft brewing seems like a new idea, it is how the beer industry began in Texas and many other states. During the 19th century, British immigrants made stouts, porters and ales with recipes from their native country. These ales could be brewed and enjoyed almost immediately without aging. By the 1860s, German immigrants transformed the beer culture and helped shape the industry that we know today.

Small German breweries sprang up in San Antonio, Brenham, New Braunfels and immigrant enclaves across the state, but German beers were more difficult to produce. Unlike the top-fermenting British ales, Germans preferred lagers that fermented for months in cool temperatures. For these reasons, German lagers were brewed in the winter and were stored deep underground. At William Menger’s Western Brewery in San Antonio’s Alamo Square, barrels were aged in a cellar protected by stone walls that were 3 feet thick.

During the mid-1800s, there were roughly 20 small brewers in the state, and 77 people worked in the industry. Steam engines and advances of the Industrial Revolution increased overall production but decreased the number of breweries. Some of the larger institutions, such as Menger’s, produced 1,500 barrels of beer annually. The smallest brewery sold 49 barrels a year.

By the 1870s, the industry reached an all-time high. Some 58 companies held a Houston beer license, and these brewers produced 16,000 barrels collectively. However, the industry experienced a rapid decline. Strong competition, poor products and financial issues caused smaller breweries to shut their doors. As mass production increased, beer barons needed more capital to invest in machinery that would increase production from thousands of barrels to millions.

Adolphus Busch was one businessman who embraced the new business model. He raised $400,000 to build the cutting-edge Lone Star Brewery in San Antonio. Pearl Beer was another company that used technology to produce 110,000 barrels annually. As these large corporations took over the industry, Prohibition became the new threat. Some breweries rebranded themselves, and other companies produced soft drinks and “near beer” to survive. After this era, national firms like Miller invaded the market.

Throughout most of the 20th century, per capita beer consumption increased steadily. Conglomerates bought up the few successful brands, and small brewers struggled to keep their businesses alive. The Spoetzl Brewery, which produces Shiner beer, embodies the struggle of these underdogs. When vertically integrated beer makers, bottlers and distributors ruled the market in the 1980s, Spoetzl’s production was cut in half. The company changed hands and gradually achieved success under the leadership of Carlos Alvarez. Between 1990 and 1994, the company’s production went from 36,000 barrels to 100,000 barrels. Eventually, mega-corporations like Miller and Budweiser became a victim of their own success. Now, the beer industry has gone back to its roots thanks to consumers who embrace craft brews and microbrew brands.

In 2008, Houston had just one craft beer maker, which is defined as a brewery that produces less than 75,000 barrels per year. Today, many more independent companies are requesting a Houston alcoholic beverage license to cater to consumers who seek out original craft beers and brewpubs that offer a singular product and experience.

Craft beers have been steadily increasing in popularity across the U.S. in recent years. During the first half of 2015, figures released by the Brewers Association indicate that approximately 12.2 million barrels of beer were sold and distributed by craft brewers nationwide. Production of craft beer products increased by about 13 percent during the same time period, spurred in part by the addition of 699 breweries in the U.S. since June 2014. Drinking establishments holding a Texas beer license have also seen an increase in the state’s craft brew production:

• According to the Brewers Association, 982,918 barrels of craft beer were produced by Texas breweries in 2014. Texas ranks seventh in the nation for production for these beer products.
• Texas craft beer production accounted for $2.3 billion in sales during 2012, the last year for which accurate financial figures have been compiled, and was second only to California in the dollar amount produced by the craft beer industry.
• In 2014, Texas was home to 119 craft beer breweries; nearly 50 more are either in the paperwork and licensing stages or have begun initial plans for operations in the Lone Star State later in 2015.

With the number of microbreweries steadily increasing both in Texas and across the country, craft beer is likely to be a growth industry for the foreseeable future.

What Is Craft Beer?

The Brewers Association defines craft brewers by their three defining characteristics:

• Craft breweries must be small operations that produce fewer than 60 million barrels each year.
• They must produce traditional beers created by brewing and fermentation.
• These brewers must be independent of large-scale corporations in the beer industry.

While the brewing methods may be traditional, craft brewers have produced decidedly innovative flavors and taste profiles. Typically created in small batches, these beverages enjoy enduring popularity among patrons of bars, liquor stores and other retail outlets.

The Economic Impact of Texas Breweries

A study released in July 2015 by the National Beer Wholesalers Association and the Beer Institute indicated that breweries in Texas employed roughly 124,000 people and amounted to $19 billion; this includes large-scale brewing operations along with the craft beer industry in the state. As time goes on, however, craft and local brew operations are taking an ever-larger piece of the economic pie. Industry experts attribute some of this popularity to the increased variety and premium positioning of these small-batch beers in the consumer marketplace. Craft beers are generally regarded as higher quality products and can be sold for higher prices as a result of this public perception.

At Home in Houston

The Texas Alcoholic Beverage Commission (TABC) is responsible not only for issuing Texas liquor license permits to bars and taverns throughout the state but also for overseeing and regulating breweries of all sizes. In the Houston metropolitan area, 31 establishments currently hold brewpub or brewery licenses with TABC; it is expected that more microbreweries and craft beer purveyors will follow suit in the latter half of 2015. Houston is an ideal location for these establishments thanks to its healthy economy and large urban workforce, which combine to create consumers with the financial means to enjoy custom-crafted beers in upscale and casual surroundings.

A TABC brewer’s permit is required for craft beer producers; additionally, a brewer’s self-distribution permit is necessary to sell these products through local grocers, wholesalers and retail outlets. Working with a company that specializes in Houston beer license applications and permits can ensure that all paperwork is completed correctly and submitted on time, allowing bars, pubs and breweries to manage their operations more efficiently. By enlisting a little professional help, prospective craft beer establishments can get the right start in the Houston consumer marketplace.

Texans and tourists who love craft beer may soon be able to buy their favorite suds directly from the brewery if a new bill introduced by the Texas Craft Brewers Guild is passed. A similar bill was brought to the Texas Senate two years ago, but it was rejected. Texas State Senator Kevin Eltife introduced the new statute despite the previous failure to alter the laws regarding direct sales of beer to the public. Other changes to Houston beer license regulations were enacted in 2013.

The bill is intended to attract national attention to Texas craft breweries. Visitors would be permitted to purchase souvenir beer to take back to their homes across Texas and in other states. Consumers would be permitted to buy up to two cases of beer from a Texas brewery each month. It is hoped that craft beer aficionados will visit the Lone Star State and enhance its reputation as a tourist destination for beer lovers.

The legislation allows smaller breweries that produce less than 225,000 barrels of beer annually to sell directly to their most ardent supporters, which would place Texas in the forefront of states with a burgeoning craft-brew industry. This bill would afford breweries the same rights enjoyed by wineries, distilleries and out-of-state competitors according to Senator Eltife.

Legislators passed numerous changes to the Texas beer license laws during their last session. Brewpubs were granted the right to distribute their products in off-site locations. Breweries were permitted to sell beer at their production facilities for consumption on premises.

This victory for the brewmeisters was also met with a defeat. Another bill was passed that prevented them from selling the distribution rights for their craft brews to Texas beer distributors. That money has traditionally been used by breweries to beef up their production capabilities. A current lawsuit against the Texas Alcohol and Beverage Commission (TABC) seeks to have that bill’s passage reversed.

The new regulations permit breweries that have a brewpub license to sell beer on site in cans, bottles and growlers and to distribute their wares to restaurants, bars and beer stores. Breweries are ramping up their production by adding more locations to accommodate the expected increased demand.

Another bill, however, has been introduced that would severely curtail the amount of beer that breweries could self-distribute in Texas. The current limit of 40,000 barrels would be reduced to 5,000 barrels if Houston’s State Representative Senfronia Thompson’s bill becomes law. This is in direct contrast to the previous bill granting breweries that produced 125,000 barrels or less the right to self-distribute 40,000 barrels. The reasoning behind the abrupt change is unclear, but the bill is certain to affect the holders of a Houston alcoholic beverage license.

Craft breweries are seeking further rights during the current legislative session. They are asking for the right to sell beer at their production facilities for consumption off site. They are also trying to regain the ability to sell their distribution rights to Texas beer distributors.

A consumer advocacy group based in Houston called Open the Taps recently published a list of the most important modifications they are seeking this year.

• Elimination of the 24-ounce limit at beer festivals
• Take-home sales for production breweries
• Permitting direct shipments of beer from in-state and out-of-state breweries
• Growler sales at establishments with mixed beverage licenses
• Substituting the TABC labeling requirements with Federal TTB approval
• Other alterations to homebrew regulations

Texas craft beer has recently enjoyed a 44 percent increase in production by the breweries that will be most affected by the legislation. Texas breweries won 16 medals at the last Great American Beer Festival. In 2013, craft brews accounted for some $2.3 billion in sales.

You have probably seen mobile beer delivery bars all across Texas. They are the latest trend. It is much easier for a company, community, married couple or anybody throwing a large or small party to contact the owner of a mobile beer delivery bar than it is to purchase and pass out beer among their guests. If you have been considering starting your own mobile beer service, you will need a Houston beer license and a few tips to successfully get your business up and running.

Mobile beer bars range in size from elaborate camper vans to bicycle pedaled vehicles equipped with a pair of kegs. You might have a couple different size vehicles so that you can handle big events or private gatherings.

Beer drinkers are much more knowledgeable these days. Drinkers no longer are faced with the same domestic and imported brands that have always been available. Now, microbreweries are all the rage and boutique beers are at the height of popularity. Every city has its own microbrewery or brewpub, and every brewpub is looking for its niche. Some go with seasonal offerings like pumpkin beer in autumn, bock beer and stouts in the winter, light pilsners in spring and heady lagers in summer. As a beer merchant, you have to stay abreast of what is current and popular in your area.

Some mobile beer bar owners keep it simple. They sell one or two of the American standards. Others want to have a wide selection of India Pale Ales (IPAs), wheat beers, lagers, pilsners, stouts and imports from Europe, Mexico, Australia and Asia. If you plan to handle a wide assortment of beers, you need to learn which types are best served icy cold, which types are best at room temperature and how to pour the foamier beers to give just the right amount of frothy head. Some owners even sell high-gravity beer, which is over 6 percent alcohol, but to do that, you would need a Texas liquor license.

Just like running a food truck, you will be your own boss, get to go to plenty of parties and work when you feel like working. However, you have to be a strict professional to properly run a mobile beer bar. If you have a one-person operation, you need to be the bartender. It takes many hours of prep work, knowledge and start-up capital to get your business off the ground.

A Texas beer license or liquor license is not too hard to acquire. Rather than dealing with the bureaucrats yourself, you can use Houston license services to do the filing and get you the correct state license. That takes all the guesswork and drudgery out of the process. These companies know what licenses and permits are required in the cities and counties where you will be selling your beer. You might need special event passes for places that do not have their own beer license, such as a reception hall.

Once your operation is legal and functional, you need to find clients. You can advertise your services, contract with communities to provide beer for their parades, summer get-togethers or New Year’s Eve bashes. Other mobile beer delivery bars may already be operating in your area, so you will have to find your own niche. You could be competing against a local brewpub, a hometown bar or another independent contractor like yourself. The key is not to compete directly with them. You have to eke out your own territory and clientele. You could concentrate on selling beer at wedding receptions, small events or block parties.

With some hard work, research and a few connections, you can turn a good idea into a steady source of income. Do not under-pour. Do not over-serve. Charge a fair price, and your mobile beer delivery bar should profit you quite nicely.

Owning an establishment that sells alcoholic beverages in Texas is a serious responsibility. As an alcohol retailer, manufacturer, wholesaler or importer, you will be required to obtain or renew your licenses on the federal, state, city or county level. You may also be obligated to carry permits. These requirements might seem daunting and exhaustive to you, but there are Texas license services to help you navigate through the entire process without suffering any missteps.

The Definition of the “Dram Shop”

An enterprise that has a Texas beer license or other alcoholic beverage license has extra liability issues that other retailers and business owners do not have. This is because a business that sells alcoholic beverages is considered to be a “dram shop” and is subject to dram shop laws. A dram shop is any retail business that makes alcoholic beverages available for sale to customers for consumption on the premises. Dram shop laws give responsibility to the owners of bars and restaurants for injuries suffered by patrons who had too much to drink.

An Example

A customer enters a restaurant and has several drinks. The employees and other customers notice that this particular person is drunk. The intoxicated patron leaves the restaurant intending to drive home but is injured in a collision. In this scenario, the restaurant’s owner may be found liable for the inebriated customer’s injuries or any injuries the customer caused.

In the example stated above, the plaintiff would need to prove at least two things before the restaurant’s owners can be found liable in the incident, and they are the following:

• The wait staff continued to serve the patron alcohol even though he or she was very clearly intoxicated
• The fact that the patron was served alcohol directly led to the injuries he or she suffered or caused

The Alcoholic Beverage Code of Texas

In Texas, the Alcoholic Beverage Code states that bars and restaurants that serve alcohol to obviously intoxicated customers may be liable for injuries. Customers who are injured in accidents after leaving a bar or restaurant can sue the establishment that served them alcohol while they were drunk, but they will have to demonstrate that it was evident that they were a danger to themselves or other people when the alcohol was sold. Minors who were inebriated when they were sold alcoholic beverages are also entitled to sue a bar or restaurant for their injuries under the Texas dram shop law.

Strict Liability

In most states, people wishing to sue bar or restaurant owners under dram shop laws must only demonstrate that they were served alcohol while they were intoxicated. Then, the establishment’s owners will be subject to strict liability. Strict liability means that the owners are “absolutely liable” for any injuries suffered. In Texas, it is different because a drinking establishment’s owners cannot be found automatically liable for injuries.

The Difference in Texas

If you have a Texas alcoholic beverage license and a patron sues you for their injuries, you will only be responsible for the portion that the jury assigns to you. For example, a Texas jury can determine that you are only liable if you are more than 50 percent responsible for the customer’s injuries. This means that the jury can decide that the driver is responsible for their injuries because they made the decision to drive after consuming alcohol.

Texas courts do not take these matters lightly, and they investigate them very thoroughly in order to assign the correct amount of blame to each individual party. Both the plaintiff and the defendant have the right to retain their own attorneys and hire experts who can demonstrate that one side or the other deserves the majority of the blame.

Restaurant owners can be assured of increasing their gross profits margins when they become licensed to sell liquor. Nightclub and Bar Magazine conducted a survey in Chicago, and the researchers learned that alcoholic drinks amounted to 14.4 percent of bar and restaurant sales. If you do not have a Texas beer license or other state required liquor licenses, you may want to start the process of obtaining them through a Texas license services company to increase the profitability of your establishment.

The Gross Profits Margin

You can discover how much money you are earning from liquor sales by determining the product’s gross profits margin. The gross margin is a highly useful figure for business owners because it tells them how much profit they are earning from each particular product.

Cost of Goods and Net Sales

Learning the gross margin for liquor sales is simple. You will need to know how much it will cost to obtain the beverages you plan to sell. This figure is called the “cost of goods.” You also need to calculate “net sales.” You arrive at this figure by tallying how much your patrons spend on their beverages. If you offer any discounts, subtract this amount from prices paid, and you will have the net sales amount.

Calculating the Gross Margin

After you have the numbers described above, you can determine the gross margin. Take net sales and subtract the cost of goods. Then, you can convert the whole number into a percentage by dividing it by net sales.

An Example

With the purchase of one keg of beer for about $100, you have enough beer to offer patrons 165 12-ounce servings or 124 16-ounce servings. At $4 a glass, the amount paid for beverages will be between $490 and $660. After using the formulas described above, you will find that the profit margin is equal to 500 percent.

Increased Competition

Although liquor sales have offered bar and restaurant owners large profits in the past, industry experts are expecting these profits to slow down in the next couple of years. More people are expected to purchase their alcoholic beverages from bars and restaurants, but researchers from IBISWorld believe that this increased competition is going to decrease each individual establishment’s profit margin.

Increasing Your Gross Profits Margin

You can increase your ability to realize a higher gross profits margin for liquor sales by investing in mobile point-of-sale (POS) systems. POS systems serve two purposes. They make it easier for your servers to sell the product, and they store data you need to calculate your gross profits margin.

Servers Remain at the Table

People often want to know how POS systems allow servers to increase liquor sales. Because servers can remain at the tables at the same time that they place an order, servers can continue to engage with the customers and sell more of the product.

Detailed Information Is Collected

A POS system tells you very detailed information that can help you stage your restaurant or bar more effectively. For example, with a POS system, you will be able to determine when people purchase more wine, beer or spirits throughout the day and plan accordingly.

You Know When Inventory Is Low

With a POS system, you will know in real time when your inventory is low. Then, you can re-order the product you need directly from the system. It can even figure waste loss percentages and waste loss variance so that you can manage loss.

Texas License Services

In order to obtain a Texas liquor license, you will need to meet the states qualifications. After being approved, you will be required to follow the state’s rules and regulations, and you will have to renew the license in the future. This does not have to be difficult because Texas license services can handle the entire process so you can focus on running your business.

A restaurant or a bar that does not have a Texas beer license is leaving a great deal of money on the table. You may have neglected to obtain this essential document because the process is difficult, but Texas license services can help you secure the license and permits that you need. Before you apply for your Texas alcoholic beverage license, contact an alcoholic beverage licensing service to help you identify what licenses and permits will be needed for your business and to make the filing process easier.

Technomic’s 2013 BarTAB Report

Technomic, Inc. is a consulting firm that performs research on trends in the food industry. This Chicago-based research firm released its 2013 BarTAB Report last year in which the company outlined several interesting findings. One is the fact that more people are buying premium spirits and beers in on-premise restaurants and bars.

As the economy recovers, people continue to spend their money very carefully. However, they are purchasing more expensive beverages in current days than they have in the past. Technomic discovered this trend in 2012 when its researchers learned that the on-premise channel grew to 1.9 billion gallons of alcohol. Sales also increased by 3.5 percent to reach $97.3 billion. For 2013 and 2014, researchers predicted that the amount of alcohol that people consume would decline, but they also believed that the amount of money spent on alcoholic beverages would continue to grow.

An Explanation for Opposing Trends

Technomic’s director of research Eric Schmidt explained how volume could decrease but the amount of money spent on alcoholic beverages could increase. He states that people are taking fewer trips to bars and restaurants because they are spending conservatively. At the same time, they are interested in experiencing more sophisticated flavors, and this requires that they seek more expensive drinking choices. Some of these more expensive choices include craft beer, imported vodka and single-malt Scotch.

Technomic explained the trends another way. In the report, researchers stated that half of the sales of alcoholic beverages transpired in the on-premise channel. It also stated that one-quarter of the volume was consumed in bars and restaurants. Furthermore, Technomic researchers found that beer tops the category of the drink that is chosen most often by bar and restaurant patrons. It is also the beverage that earns the most money. In 2011, beer consumption decreased, but by 2012, this beverage started to make a comeback. However, it appears to be limited to certain types because in 2013, sales for major domestic beers continued to decline.

The Competition between Spirits, Beer and Wine

Beer has been doing very well recently, but spirits have been showing even greater improvement in bars and restaurants. In 2012, sales of spirits grew faster than any other beverage. Volume increased by 1.9 percent, and the amount sold in dollars increased by 5.6 percent. Technomic researchers believed that sales of spirits would be flat at the end of 2013. They also noted that sales of several high-end beverages are continuing to increase. Overall, wine sales are declining, except for one segment. Domestic table wine continues to be very popular, and more people are purchasing and drinking these wines on an increasing basis.

According to Technomic, whiskey categories collectively outperformed non-whiskey categorieswhen people make their way into bars and restaurants, and this appears to be due to the choices of the millennial generation. Specifically, this population is choosing between spirits and craft beers when they go out because they are seeking a particular flavor, or they are celebrating an occasion. In other words, they are not married to any particular type of drink, so they have a wide array of options open to them. As time marches on, they will continue to be the impetus of the major trends in the beverage industry.

If you have a Texas alcoholic beverage license, it is important for you to know about changes to the Texas’ mixed beverage tax laws. Now that House Bill 3572 is in full effect, you will be paying a much lower mixed beverage gross receipts tax rate. Before January 1 of this year, the rate was 14 percent. Now, it is only 6.7 percent.

The Mixed Beverage Sales Tax

Although the mixed beverage gross receipts tax rate has declined, the new legislation adds another tax: the 8.25 percent mixed beverage sales tax. This tax applies to mixed beverages, including the wine, ale, beer and distilled spirits that you sell, prepare or serve in your establishment. It also includes any non-alcoholic beverages that you mix with alcoholic beverages that will be consumed at your place of business. Lastly, it applies to the ice that is used to make alcoholic beverages that customers drink on the premises.

The Mixed Beverage Sales Tax Surety Bond

Before this new law went into effect, proprietors with a Texas beer license only had to post a mixed beverage gross receipts tax surety bond in the amount of $7,500. Currently, you must continue to post the aforementioned bond, but you are required to post the mixed beverage sales tax surety bond as well.

The exact amount of these bonds is going to depend on your individual tax filing. After this initial number has been calculated, officials will figure the final amount by taking your personal credit score and other financial considerations into account.

Passing the Cost onto Your Customers

You will not be permitted to pass the mixed beverage gross receipts tax onto your customers. However, you will be able to add the mixed beverage sales tax to your customers’ bills. You can do this legally in only two ways:

1. Add a line item to the customer’s bill that specifically outlines this tax.
2. Include the mixed beverage sales tax in the beverage’s price.

Informing Your Customers in Writing

If you select option number two, you must let your customers know in writing that the sales price includes the mixed beverage sales tax. You can do this by printing this information on invoices, bills or receipts in the following manner:

1. State that the mixed beverage sales tax was included in the beverage’s price.
2. List the amount of the mixed beverage sales tax for each beverage.
3. List the combined amount of mixed beverage sales taxes that were charged for each beverage.
4. List the combined amount of mixed beverage sales taxes and ordinary sales taxes charged for each beverage.

When Are These Taxes Due?

When you owe these taxes will depend on how much you owe. For example, if the calculated amount comes to more than $500 in one month or more than $1,500 in one quarter, then you owe these taxes on a monthly basis. If the amount is less than $500 a month or less than $1,500 a quarter, you will need to pay these taxes quarterly.

How to File Mixed Beverage Sales Taxes

How you file your mixed beverage sales taxes will be dependent upon the amount you owed during the last fiscal year. If at that time you paid taxes that amounted to less than $10,000, you can file and pay your taxes in any manner you see fit. You can file electronically or by paper if you paid between $10,000 and $49,999 in taxes. If your tax bill amounted to more than $50,000, you must file electronically.

If you need further help, an official with a Texas license services company will be able to assist you.