New law could leave you paying more at the bar

KDBC
Thursday, January 2, 2014 - 12:21am

The New Year means plenty of new laws are now in effect. At midnight 47 laws hit the books in Texas.

One of those laws may leave you paying more for a mixed drink.
"It's ridiculous sometimes the prices you have to pay for a shot or mixed drink or anything like that," said Michelle Rodriguez.

Starting January 1, you could be paying more for liquor at bars and restaurants.

The new law slashes the 14% gross receipts tax full service bars used to pay down to 6.7%.

But at the same time, it creates a new 8.25% sales tax that you have to pay on drinks with hard liquor.

What does that mean for you? Well a $10 mix drink used to cost a bar $1.40 taxes. Now the bar only pays 67 ¢.

"The old tax at 14% wasn't transparent at all,” said Anthony Duncan, owner of Corner Tavern. “The consumer wouldn't even know that tax was there before."

Now your receipt will tell you exactly how much of the tax you are paying.

"It's not necessarily any better for us, we aren't making anything more off of it,” Duncan said. “What happens is the customer will see it and it will appear to them that they are paying more."

State Representative Joe Moody said this new law will prevent taxes from being raised on mixed drinks without you knowing about it.

"I think it creates a better business environment,” Moody said. “It creates more honesty in taxation in the process we tax those drinks at. I think overall it will be a good thing for those consuming those drinks. They will know exactly what the cost going into them is."

Customers at El Luchador in east El Paso said the increase won't stop them from going out.

"It's good to know,” said Crystal Guerrero. “It's good to know so we can see if there are any changes when we visit."

And even though you could end up paying more for a drink, bars around town say they are lowering their prices.

"I really don't think it benefits one part more than the other, just for the fact that we are lowering our rates so the customer doesn't feel that slight increase," said owner Richard Williams.

That way you have a good time without noticing a change.

It is estimated the new law could raise more than 21 million dollars for the state of Texas this year alone. There is already a sales tax on beer and wine sales. 

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