34 Tex. Admin. Code § 3.289 - Alcoholic Beverage Exemptions
(a)
Exemptions.
(1) Sales or use tax is not due
on charges for admission to night clubs, dance halls, discos, etc., when the
charges are subject to the mixed beverage gross receipts tax under Tax Code,
Chapter 183. If the state refunds the mixed beverage gross receipts tax that
was previously paid on cover charges, then the cover charges that were not
taxed under Tax Code, Chapter 183, are subject to sales tax as a fee for
admission to an amusement service. For information on amusement services, see
§
3.298 of this title (relating to
Amusement Services).
(2) Sales or
use tax is not due on the sale of mixed beverages, including ice or
nonalcoholic beverages that are mixed with, or are intended to be mixed with,
alcoholic beverages, and gratuities collected on those sales, if the receipts
are taxable under Tax Code, Chapter 183. If the state refunds mixed beverage
gross receipts tax that was previously paid on mixed beverages, ice, and
nonalcoholic beverages, then sales tax is due on the original sales price that
was not taxed under Tax Code, Chapter 183.
(b) Issuance of exemption certificates.
Persons who hold mixed beverage permits, late hour mixed beverage permits, or
daily temporary mixed beverage permits issued by the Texas Alcoholic Beverage
Commission are entitled to issue exemption certificates to their suppliers in
lieu of paying sales tax on the purchase of alcoholic beverages, ice, mixes,
and nonalcoholic beverages, if the receipts from the resale of these items are
taxable under Tax Code, Chapter 183.
(c) Resale. Sales of liquor, wine, beer, or
malt liquor from a licensed manufacturer, wholesaler, or distributor to a
retailer licensed under Tax Code, Chapter 183, are presumed to be for resale.
No resale certificate is required.
(d) Complimentary drinks. Any person who
provides drinks to others without charge owes sales tax on the cost of the
ingredients of the drinks.
(e)
Private club permittee.
(1) Sales or use tax
is not due on the sale of mixed beverages, and gratuities collected in
connection therewith, if the beverages are served on the premises of the clubs
to members or their guests and if the receipts are taxable under Tax Code,
Chapter 183.
(2) A private club is
required to collect sales tax on the sales price of prepared foods, candy,
meals, and other food products prepared, served, or sold for immediate
consumption, whether or not sold in connection with the serving of alcoholic
beverages. Charges for meals or other food products are subject to sales tax
and must be separated from the charges for alcoholic beverages served to
members and guests. For discussion of food and drinks sold for immediate
consumption, see §
3.293 of this title (relating to
Food; Food Products; Meals; Food Service).
(3) A private club must pay sales or use tax
on all supply items, equipment, and replacement parts that the club uses or
consumes in providing service, except for items that qualify for exemption as
manufacturing items, as explained in §
3.300 of this title (relating to
Manufacturing; Custom Manufacturing; Fabricating; Processing). Also see §
3.293 of this title (relating to
Food; Food Products; Meals; Food Service).
(4) A private club may issue a resale or
exemption certificate in lieu of paying sales tax for the purchase of those
items furnished to members and guests with beverages, food products, or meals
served for immediate consumption. The items must be of a nonreusable nature or
qualify for exemption as wrapping or packaging materials that are used to wrap
or package processed food and beverages. See §
3.293 of this title (relating to
Food; Food Products; Meals; Food Service) and §3.314 (relating to
Wrapping, Packing, Packaging Supplies, Containers, Labels, Tags, Export
Packers, and Stevedoring Materials and Supplies).
(f) Fraternal and veteran's organizations.
(1) Fraternal and veteran's organizations
that do not qualify for a private club exemption certificate may purchase beer,
wine, or ale tax free from a distributor or other retailer only when the
organization holds and maintains a valid retail dealer's on premise license,
issued under Texas Alcoholic Beverage Code, §
69.01, or a
valid wine and beer retailer's permit, issued under Texas Alcoholic Beverage
Code, §
26.01. In
addition to either of the above licenses, the organization must possess and
publicly display a limited sales tax permit as a retailer. When an organization
holds the required license and permit, it must collect sales tax on all taxable
sales of beer, wine, or ale.
(2)
When a fraternal or veteran's organization that purchases or sells alcoholic
beverages does not hold either of the retail licenses issued by the Texas
Alcoholic Beverage Commission, it must pay sales tax on its purchases of
alcoholic beverages.
(g)
Certificates required. A seller is required to collect sales tax on the sale of
taxable items, unless the seller accepts, in good faith, an exemption or resale
certificate from the purchaser, or the exception for resale in subsection (c)
of this section applies, or the sale is exempt because it is subject to mixed
beverage gross receipts tax under Tax Code, Chapter 183. See §
3.285 of this title (relating to
Resale Certificate; Sales for Resale) and §
3.287 of this title (relating to
Exemption Certificates).
Notes
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