Texas Alcohol Excise Taxes

LiquorTexas imposes an excise tax on the first sale of alcohol manufactured or imported into this state. The rate of tax varies based upon the type of alcohol being sold:

  • Distilled spirits (defined as “alcohol spirits of wine, whiskey, rum, brandy, gin, or any liquor produced in whole or in part by the process of distillation, including all dilutions or mixtures of them, and includes spirit coolers that may have an alcoholic content as low as four percent alcohol by volume”) – A tax is imposed on distilled spirits at a rate of $2.40 per gallon. However, if a package of distilled spirits contains two ounces or less, then the tax is 5 cents per package.

  • Vinous liquor (defined as “a product from the alcoholic fermentation of juice of sound ripe grapes, fruits, berries, or honey,” including wine coolers) – For vinous liquor that contains 14% of alcohol by volume or less, a tax is imposed at a rate of 20.4 cents per gallon. For vinous liquor that contains more than 14% of alcohol by volume, a tax is imposed at a rate of 40.8 cents per gallon. For vinous liquor that is artificially carbonated or naturally sparkling, a tax is imposed at a rate of 51.6 cents per gallon. 
  • Ale and malt liquor (defined as “a malt beverage containing more than four percent of alcohol by weight”) – A tax is imposed at a rate of $0.198 per gallon. 
  • Beer (defined as “a malt beverage containing one-half of one percent or more of alcohol by volume and not more than four percent of alcohol by weight”) – A tax is imposed at a rate of $6 per barrel.

What constitutes a “first sale” also varies according to the type of alcohol being sold:

  • For distilled spirits and vinous liquor that are imported into the state by the holder of a wholesaler’s permit, a first sale occurs when the distilled spirit or vinous liquor is sold to a holder of a permit that allows for the retail sale of the distilled spirit or vinous liquor or to a holder a local distributor’s permit. In all other situations, a first sale of a distilled spirit or vinous liquor occurs upon the first sale, possession, distribution, or use of the distilled spirit or vinous liquor in the state, subject to certain exceptions.

  • For ale, malt liquor, or beer, a first sale occurs at the time of:

a)  the first actual sale by the holder of a wholesaler’s, general class B wholesaler’s, or local class B wholesaler’s permit to:

i. the holder of a permit that allows for the sale of the ale, malt liquor, or beer to ultimate consumers;

ii. a local distributor permittee; or

iii. a private club registration permittee;

b)  the first actual sale by a brewpub licensee to a consumer or a permittee or licensee authorize to sale the ale, malt alcohol, or beer to ultimate consumers; or

c)  the importation or ale, malt liquor, or beer.

If you have any questions, please do not hesitate to give us a call.