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New mixed drink sales tax may increase prices

KETK
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Tuesday, December 31, 2013 - 8:03pm

A whiskey drink currently costs $7. However, beginning on Wednesday, January 1, it could cost more than $8. This can be attributed to a new sales tax on mixed drinks.

Currently, there is no sales tax on mixed drinks. Instead there is a hidden 14 percent tax that businesses pay, that is already included in the price of the drink. So beginning January 1, 2014, the taxes that businesses pay on liquor will drop from 14 percent to 6.7 percent. Also involved in this process, a new mixed-beverage sales tax of 8.25 percent will take effect for consumers. This is the same tax that is normally paid for beer or wine. If the 6.7 percent increase is added onto the 8.25 percent increase for consumers, this means it may be a 14.95 increase. Almost a 1 percent increase than previously-- that consumers will need to pay.

This new sales tax will be implemented throughout Texas, and there are 3 ways a bar or restaurant can handle this increase in cost. KETK spoke with CEO of the Texas Restaurant Association, Richie Jackson, who said, "The first option, the bar or restaurant can sell their drinks, tax included, which is essentially what they do today. It would be no change whatsoever. The second option is the restaurant or bar may actually choose to lower the prices for competitive reasons. Or the third is businesses just leave their prices as they are, put the 8.25 tax on top of that, and in that instance, it would be a price increase for customers".

Local bar owner Dan Boone, from Daniel Boone's, believes this tax will benefit consumers. Boone said, "I do think it will give the customer the opportunity to see the tax that they're paying now, because it will show up on the guest check". Boone also mentioned that he does not believe it will have a major effect on mixed drink sales.

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