New tax shakes up drink prices
January 02, 2014, 6:21 pm by Emily Zendt
A new tax on mixed drinks in
The new legislation extends the 8.25 percent sales tax at restaurants serving only beer and wine to full service bars, while slashing taxes for business owners with permits to sell liquor and giving them options for passing along the new tax.
"[They’re] killing us – makes you want to drink at home,”
said Johnny Hendrix, a
Now the taxes that businesses pay on liquor will drop from 14 percent to 6.7 percent and a new mixed-beverage sales tax of 8.25 percent will take effect for consumers — the same tax they pay for beer and wine. Establishments with a beer/wine permit are not subject to the new tax.
Although the gross receipts tax for permit holders were cut almost in half, customers could pay almost 1 percent more than they did before.
If a business adds the new 8.25 percent tax to the remaining 6.7 percent mixed-beverage gross receipts tax, which is built into the cost of drinks, people could pay a 14.95 percent tax on each drink.
But the legislation does offer business owners flexibility in how they choose to handle the tax. Businesses can include the tax in the price of the drink or they can pass the tax along to the customer and add it to the bottom of the bill.
For the full story, see the weekend edition of The Highlander.
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