You Can Successfully Tackle Your TABC Mixed Beverage Taxes

3 Terrific Tips for Keeping the TABC Happy

You Can Successfully Tackle Your TABC Mixed Beverage Taxes | Tabulate

No matter the size of your establishment or the demographics of your regular customers, you must pay your mixed beverage taxes correctly, or you’ll be in world of trouble with the Texas Alcohol and Beverage Commission (TABC).

If the TABC finds you in violation of those fees, you will face stiff penalties, including:

  • Suspended license
  • Heavy fines
  • Increased bond requirement (up to 4 times your average monthly sales volume)

Tabulate recognizes how difficult tracking your drink taxes can seem, especially to inexperienced owners opening their first Texas restaurant or bar. With over 75 years of experience exclusively with the food service industry, our expert bookkeepers have three tried-and-true tips to help you find success with the TABC.

#1 Track Your Sales Properly

First things first: you need to track liquor, beer, and wine revenue separately. Yes, they are all forms of liquor, but you have to properly remit taxes on the sales of each item. That means accounting for the amount of booze you use for each and every mixed drink by ensuring that your POS system know exactly what goes into every drink on your menu.

That’s the obvious stuff, so what about comps? It’s a little-known fact in our industry that Texas also collects tax on the drinks you give out to your customers as compensation – no matter the reason.

To make sure you quantify and pay these taxes properly, Tabulate always recommends that you code comps in your POS according the item being comped, not according to comp reason.

  • Correct:  Comps labeled as “Comps- Liquor”
  • Incorrect: Comps labeled as “Comps- Bad Service”

This POS configuration is the only way you can ensure your totals add up correctly.

#2 Pay Your Bills on Time, Every Time

You Can Successfully Tackle Your TABC Mixed Beverage Taxes | Tabulate

You must pay your bills to your alcohol distributors by the 10th and the 25th of each calendar month. If your bills are paid even a day late, the distributor can choose to report you to the TABC for non-compliance. And if you get on “The List,” the TABC can make sure that distributors won’t sell to you.

Since the liquor vendors are supposed to turn in customers for non-payment, there is an unwritten grace period that many of them follow. They will often call people directly to request full payment or set up a payment schedule before reporting to the TABC.

All of this means you have to manage your cash flow very carefully.  A good bookkeeper will keep you apprised of your cash flow situation to help you prioritize and pay your bills so you stay out of hot water.

#3 Don’t Think You Can Fly Under the Radar

On average, the TABC will audit each licensed establishment once every 5 years. The state knows exactly how much inventory you have purchased because they get regular reports from all licensed distributors.

So, if you think you can hide, you’re wrong!

Unlike other types of audits, this TABC 5-year audit is a depletion audit. This unique audit gives the TABC permission to guesstimate the revenue you should have made and then assess a tax bill based on that estimate. If you don’t like that tax bill or estimate, you have to prove to the TABC they are wrong, or they are legally allowed to fine you!

If you want to find success with your mixed beverage taxes and the TABC, your Texas restaurant or bar must have clean books and a properly configured POS system. Standing up to TABC levels of scrutiny requires the careful attention to detail that you can only obtain from the professionals at Tabulate. With 75+ years of experience delivering bookkeeping services exclusively for the food service industry, we provide bookkeeping, bill pay, detailed analytics, and financial statements for independent restaurant and bar owners starting at $299/mo.

Contact us today to learn more about how we can help your business!