Frequently Asked Questions?

Why Do Liquor Establishments Need My TABC Liquor Tax Consulting Services?

[You may report and pay tax on all of your sales, operate your bar professionally, have complete records and good internal control policies in place, however, the TABC liquor tax audits are based on your liquor, wine and beer purchases, and, not just your reported sales. Texas State Liquor Tax Laws state “MIXED BEVERAGE LIQUOR TAX LICENSE HOLDERS OWE, THE 14% LIQUOR TAX, ON ALL LIQUOR, WINE, AND, BEER VENDOR PURCHASES UNLESS THEY CAN PROVE THE ITEMS WERE NOT SOLD”!! The state auditor will either sample or detail your audit using a liquor tax software program that calculates what your sales should be from the purchases made. They will then compare the estimated sales to what you actually reported on your tax returns. If there is a difference they calculate a percentage error rate to use in projecting additional taxable sales for your entire audit period. Needless to say, over 50% of taxpayers end up owing tens and even hundreds of thousands of dollars in additional tax, penalty and interest. Many of them thought they should and would be okay because they do things right!! It is almost impossible to account for all alcoholic beverage purchases. This is where my services come in. With over 29 years of experience with this tax I will make sure you give the auditor complete and accurate information so you can put your best foot forward. If your audit is done and you have a tax bill in front of you I am the best at finding errors and disputing state auditor methods. I will get you the best results. I am the only liquor tax consultant with a TABC audit background (15 years), and, a Comptroller liquor tax audit background (13 years)..

Why are liquor tax audits generated?

[Audits are generated to insure the State of Texas has received tax on all taxable revenues generated by holders of mixed beverage permits.]

How am I Selected for an audit?

[Audit selection is based on a lot of different criteria. Most audits are randomly selected. Some audits are generated from citizen complaints or tips and others are based on red flag items, from data submitted, by you on your tax returns, reviewed by the Comptroller.]

How long does the audit last?

[Audits can last from one day to several months. This depends on the size of the account and the state of the records.]

Why should I be audited, when, I have submitted all tax returns on time, and, reported and paid tax on all taxable sales?

[Your liquor tax audit involves much more than your tax returns. The mixed beverage tax rule, in so many words, states the taxpayer owes tax on the disposition of all liquor, wine and beer inventories unless the taxpayer can prove the items were not sold. This means you owe tax on all liquor, wine and beer you have in inventory or have purchased unless you can prove you didn’t sell it.]

How long do I have to keep records??

[Records must be kept for 4 years.]

If I get a mixed beverage tax permit do I owe the 14% liquor tax on wine and beer also?

[Yes, when you obtain a mixed beverage tax permit all categories, distilled spirits, wine and beer are subject to the 14% tax. Holders of a beer and wine license, pay sales tax on beer and wine only.]

Helpful Links

Comptroller of Public Accounts
Texas Alcoholic Beverage Commission
AJ Stevenson Licensing
Clyde Burleson, TABC/DWI Attorney – 713/628-1503