| (1) The club shall maintain documentation that shows
the normal cost to a member or guest for each of the items provided
for the lump-sum charge. The permittee may then compute the percentage
of the total of all the charges attributable to the sale or service
of the alcoholic beverages. This percentage is then applied to the
actual lump-sum amount paid by the member or guest to determine the
amount of gross receipts subject to the mixed beverage gross receipts
tax. For example, if the total of all the items would normally cost
$300 and the permittee estimates that the portion attributable to
the sale or service of alcoholic beverages is $30, then 10% of the
actual lump-sum amount would be reported as subject to the mixed beverage
gross receipts tax. If the lump-sum amount paid by the member or guest
is $200, then the mixed beverage gross receipts tax base would be
$20. The documentation used by the permittee is subject to review
by the comptroller's personnel and any amounts determined to be inaccurate
or unreasonable may be adjusted.
(2) The permittee may choose to use the normal sales
or service prices of the alcoholic beverages as the tax base for the
mixed beverage gross receipts tax.
(e) Nonprofit organizations holding fundraising and
other special events where 100% of the net profit of the event goes
to the nonprofit organization. Nonprofit organizations with an IRS
Section 501(c)(3), (4), (8), (10), or (19) status who are permittees,
including organizations who have been issued a temporary permit, are
responsible for paying the mixed beverage gross receipts tax as follows:
(1) if tickets are sold to an event with an open bar,
the nonprofit organization owes mixed beverage gross receipts tax
on the cost to the organization of any alcoholic beverages purchased
for the event;
(2) if tickets are sold to an event with an open bar
and the alcoholic beverages are donated to the nonprofit organization,
the nonprofit organization does not owe mixed beverage gross receipts
tax or use tax as provided by Tax Code, Chapter 151, on the donated
alcoholic beverages, but owes mixed beverage gross receipts tax on
the cost of any alcoholic beverages purchased for the event;
(3) if an event is one with a cash or ticket bar (with
or without an entry fee), the nonprofit organization owes mixed beverage
gross receipts tax on the total receipts from the sale and service
of alcoholic beverages;
(4) if an event is one with no entry fee and an open
bar, the nonprofit organization does not owe mixed beverage gross
receipts tax, but owes use tax as provided by Tax Code, Chapter 151,
on the cost of any alcoholic beverages purchased by the organization
for the event.
(f) Items excluded from the mixed beverage gross receipts
tax base. The mixed beverage gross receipts tax does not apply to
receipts for the items described in this subsection.
(1) Complimentary alcoholic beverages. Use tax as provided
by Tax Code, Chapter 151, is due on the taxable ingredients of the
complimentary alcoholic beverages. A serving of an alcoholic beverage
shall not be a complimentary alcoholic beverage if any consideration
is paid to the permittee, which may include, but is not limited to,
the following: the alcoholic beverage is served in connection with
food or any other thing sold to the recipient or an entertainment
or entry fee is charged that includes one or more drink coupons or
tickets. Any alcoholic beverage served under the identified or similar
conditions is subject to the gross receipts tax, computed on the basis
of the normal charge for the sale or service of such alcoholic beverage.
(2) Complimentary alcoholic beverages served during
promotional periods such as happy hours at hotels or motels. If, however,
there is an increase in guest room rates attributable to the promotional
periods, the comptroller will have the option to tax either the increase
in the room rate under Tax Code, Chapter 156 (Hotel Occupancy Tax),
or assess use tax on the taxable ingredients of the complimentary
drinks. The comptroller will have the authority to use information
such as the room rates at comparable hotels and motels in the area
to determine if an increased rate is attributable to the promotional
period of alcoholic beverages.
(3) Complimentary alcoholic beverages served to holders
of free drink cards or free drink tokens, for which no consideration
was paid to the permittee.
(4) Voluntary gratuities.
(5) Reasonable mandatory gratuity charges, subject
to the requirements of subsection (i)(1) of this section.
(6) Walked checks or tabs.
(7) Receipts from cover charges, door charges, entry
fees, or admission fees that are for entertainment, food specials,
and other purposes, and receipts from the sale of temporary membership
cards. Sales tax as provided by §3.298 of this title (relating
to Amusement Services) is due on these receipts.
(8) Bad debts. For more information on bad debt refunds
or credits, refer to subsection (n) of this section.
(9) Mixed beverage sales taxes. Mixed beverage sales
taxes are not part of the mixed beverage gross receipts tax base.
A permittee who sells mixed drinks with mixed beverage sales tax included
in the sales price should deduct the mixed beverage sales tax before
calculating the mixed beverage gross receipts tax base.
(g) Alcohol loss. No mixed beverage gross receipts
tax is due on alcoholic beverages destroyed due to spillage or breakage.
(h) Inventory for cooking. No mixed beverage gross
receipts tax is due on alcoholic beverages used in cooking.
(1) Purchases. Purchases of alcoholic beverages used
in cooking must be documented either:
(A) by purchase invoices that have such beverages clearly
denoted by either the seller or purchaser; or
(B) by separate purchase invoice.
(2) Storage. Alcoholic beverages used in cooking may
be stored with regular bar stock or in a separate storage area.
(3) Use. The withdrawal from inventory of alcoholic
beverages used in cooking must be recorded at the time of withdrawal
on a service check or other permanent source record. Use tax as provided
by Tax Code, Chapter 151, is not due on alcoholic beverages used in
cooking.
(i) Mandatory gratuity charges.
(1) Reasonable mandatory gratuity charges are excluded
from the mixed beverage gross receipts tax base if they are:
(A) separated from the sales price of the alcoholic
beverage served;
(B) identified as a tip or gratuity by any reasonable
means, including such terms as service fee or service charge; and
(C) disbursed to qualified employees. Any portion of
a reasonable mandatory gratuity charge that is retained by the employer
is included in the mixed beverage gross receipts tax base.
(2) Mandatory gratuity charges in excess of 20%. If
a mandatory gratuity charge exceeds 20% then the entire mandatory
gratuity charge is included in the mixed beverage gross receipts tax
base regardless of how the gratuity is disbursed.
(j) Record requirement. Records required by the comptroller
for mixed beverage permittees must be kept for a minimum of four years
and throughout any period in which any tax, penalty, or interest may
be assessed, collected, or refunded by the comptroller, or in which
an administrative hearing or judicial proceeding is pending. Records
must be made available upon request within a reasonable time for examination
by the comptroller or authorized agents or employees. The records,
in general, must be contemporaneous and must reflect the total gross
receipts from the sale or service of alcoholic beverages and those
associated services that are subject to the gross receipts tax, as
provided by subsections (c), (d) and (e) of this section. Records
may be written documents or their electronic equivalents. Permittees
must contact the Texas Alcoholic Beverage Commission for information
concerning Texas Alcoholic Beverage Commission record keeping requirements.
(k) Source records.
(1) The information described in this subsection is
required to be printed on a source record in a manner that makes such
information clearly evident or by a system of symbols (codes) if such
symbols and their meaning are printed on the source record or maintained
on the licensed premises.
(A) Each individual serving of an alcoholic beverage
and the price charged. When using service checks, it is permissible
to make one entry on a service check for more than one individual
serving if all of the servings are of the same type (e.g., 3 Scotch &
Water @ $2.00 = $6.00). If all of the servings are not of the same
type, a separate entry must be made on the service check for each
type of service (e.g., 3 Scotch & Water @ $2.00 = $6.00, 2 Rum &
Coke @ $2.00 = $4.00). When using a cash register only, regardless
of the type of service, each individual serving must be rung up separately.
When using a combination of service checks and a cash register, it
is not necessary to itemize each serving on the cash register tape
if all the required information is shown on the service Cont'd... |
