comptroller audits

Texas imposes both a 6.7% Mixed Beverage Gross Receipts Tax and a 8.25% Mixed Beverage Sales Tax on the money a business receives from the sale, preparation or service of alcoholic beverages consumed on the premises of a business with a Mixed Beverage Permit or Private Club Permit.

Mixed beverage audits conducted by the Texas Comptroller of Public Accounts can be extremely costly and frustrating for taxpayers. The Comptroller uses an “Alcoholic Beverage Depletion Analysis” to estimate what it thinks the taxpayer’s sales should have been over the audit period (which may include up to four years of sales) by taking taxpayer’s alcohol inventory purchases, roughly estimating how many drinks could be made out of the total inventory and multiplying that number of potential drinks by the taxpayer’s normal sales price.

Many taxpayers don’t realize that the businesses they’re allowed to purchase alcohol inventory from – the local distributors and wholesalers – are obligated to report to the state exactly how much alcohol they sell and which businesses they sell it to.  The Comptroller keeps track of how much alcohol inventory a taxpayer purchases through its Retailer Inventory Tracking System – or RITS. Generally, if the taxpayer doesn’t have records evidencing otherwise, all the alcohol inventory it purchased during the audit period is presumed to have been resold.

This audit method often fails to properly account for theft, spillage, comps, inconsistent drink pours, ending inventory and alcohol sold for off-premise consumption. Mixed beverage audits often result in tens, or even hundreds of thousands of dollars in additional tax, penalty and interest due.

Our experienced liquor lawyers know how to work through these audits on your behalf. 

Contact us if you receive a notification of an upcoming mixed beverage audit.