Texas restaurant sales tax and the mixed beverage tax explained

A Texas restaurant that serves alcohol pays two different taxes on its drinks, and only one of them appears on the guest's check. Owners who confuse the two end up undercharging customers or paying the wrong return. This guide explains both in plain terms. It is general information, not tax advice, so confirm every rate and filing date with the Texas Comptroller of Public Accounts.

What is the sales tax on restaurant meals in Texas?

The state sets a sales tax rate, and cities, counties and special districts may add local sales tax up to a combined limit that the Comptroller publishes. Prepared food and drinks served by a restaurant are taxable. The exact rate depends on the address of the sale, and smaller or unincorporated areas can be lower than a big city. Use the Comptroller's rate lookup for your address, and check it again if you move or open a second location.

What is the mixed beverage gross receipts tax?

A business with a mixed beverage permit pays a separate tax of 6.7 percent on its gross receipts from mixed drinks. The Comptroller's guidance says it also covers ice and non-alcoholic mixers sold to be consumed on the premises with alcohol. It is a tax on the permit holder, not on the guest. The rules say it may not be charged separately to the customer or treated as included in gross receipts for other purposes. Do not add a line for it on the check.

The guest does pay the regular sales tax on the drink, at the same combined rate as a meal. So a single cocktail brings two taxes into your books: sales tax collected from the guest, and gross receipts tax paid by you.

What goes on the check?

• Food and drink lines, each at its menu price.
• One sales tax line, at the combined rate for your location.
• A tip line, or a printed suggested tip, which is not taxed when it is voluntary.
• Any mandatory service charge, which you should treat according to the Comptroller's guidance, so ask before you add one for large parties.

Test your point-of-sale system with a simple sale and calculate the tax by hand. If the numbers differ, fix the setting before service.

When are returns due?

The Comptroller assigns filing frequency based on your sales, usually monthly for a busy restaurant. For the mixed beverage gross receipts tax, the STAR guidance says returns and payments are due on the 20th of the month following the reporting month. Put the dates on a calendar for both taxes, file even when sales are zero and keep copies of every return. Late returns can bring penalties and interest.

How do you keep the books straight?

Keep alcohol sales separate from food in your reporting, and make sure ice and mixers are tracked as the guidance requires. Reconcile the point-of-sale report with your bank deposits each week, and with your return each month. A bookkeeper who understands Texas restaurants is worth the fee. Ask your accountant how to treat comped drinks, staff meals and spoilage.

What about delivery and takeout?

Takeout food is taxable like dine-in. When a guest orders through a delivery platform, the platform may collect and remit sales tax on the order, so ask each one how it reports your sales. Alcohol to go has its own rules from the Texas Alcoholic Beverage Commission, so check the commission's guidance before you offer it.

What mistakes do owners make?

Common ones are using a neighbor's tax rate, adding the gross receipts tax to the guest's check, missing the 20th and forgetting that ice and mixers count. Another is setting up the register once and not rechecking after a rate change. A quarterly review of the point-of-sale tax settings, with a printout in your files, is a cheap way to catch these.

How should you set up a cash-flow plan for tax payments?

Sales tax is money you hold for the state, not income. Move the tax collected into a separate account each week so that it is there on the due date. Do the same for the gross receipts tax on mixed drinks. A restaurant that spends its tax money on a slow week faces a bigger problem in the next month. Ask your bookkeeper to give you a one-page summary of what you owe and when, and review it every Monday.

What do you do if you find a mistake?

If you discover that you have used the wrong rate or missed a return, act at once. Contact the Comptroller's office or your accountant, file an amended return where needed and fix the register setting. Records that show you found and corrected the error yourself are far better than an error found in an audit. Do not wait for the next filing period.

Wondering how to turn a good bar program into more covers?

The tax is the cost of selling a drink; the guests are the point. Mosey is a food-first app where diners find places by dish, mood and neighborhood and rate what they ate. A restaurant can host a page with its menu, show the dishes guests rate highest and reply to what they say, which helps a signature cocktail or a Friday special find its audience.

More guides for your business:

• How do I get more customers to my Texas restaurant? (2026)
• TABC seller-server training: is it required for Texas restaurant staff?
• Texas tipped wage and tip credit for restaurants (2026 guide)

More in the US guides for food businesses.