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TX – Nonalcoholic Beverage Subject to what?

Posted by salestax on February 20, 2008

We can’t make this stuff up. 

So, in TX, if you order a Red Bull and Jagermeister in separate containers, both items are taxable – but not at the “low” 8.25% sales tax rate.  Let’s try the 14% “mixed beverage” tax.  But, if your designated driver orders a Red Bull and you order a shot of Jagermeister, you can get the Red Bull for 8.25% added and the Jagermeister for 14% added.  Just meet in another corner of the bar and mix-em together.  

And, how would you ever prove this?  Some people do buy just shots of liquor without adding non-alcoholic beverages to them.  But what would happen when the same tab showed shots of Jack Daniels and cokes separately.  Who’s going to make the decision on whether they were mixed by the customer?  I bet a beverage auditor will take that position. 

Read the Opinion Response here.

Seriously folks.  How will the TX auditor look at this?  And who would prevail?  The sales tax auditor or the beverage auditor?  I’d like to sit in on that audit meeting.  TX legislature of course, will want the beverage auditor to win, since it’s a higher revenue generator, but won’t the sales tax audit bureau be mad, ’cause they’ll lose out on that budget.

And, what if a sales tax auditor came in and assessed on the Red Bull and later the beverage auditor wanted to assess on the same item.  It’s a different tax.  So what is the taxpayer to do in the end?  Pay the 14% assessment and apply for a refund of the 8.25%.  We know how TX likes to hand out refunds.  And I bet there is no reciprocity between the two taxes.

And, who writes a letter basically telling the state to tax them at a higher rate.  Aren’t these letter usually for the purpose of getting out of something, not admitting to something.  I really hope the requester didn’t send in his company’s name. 


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