Current Issues & Legislative Update
TX Legislative Session Info
The Texas Restaurant Association approaches advocacy on two fronts: working to defeat legislation and regulations which could negatively impact your business and promoting legislation and regulations which could benefit the industry and your business.
The 83rd Session of the Texas Legislature has begun and the TRA is actively working to protect and promote the interests of the restaurant industry. CLICK HERE for a list of the most critical bills we are tracking.
Mixed Beverage Tax Transparency
Currently a 14% gross receipts tax is paid by mixed beverage permittees (those allowed to sell liquor, beer and wine for on-premise consumption). The TRA and the hotel industry are seeking to change the mixed beverage tax from a gross receipts tax paid by the permit holder to a sales tax paid by the consumer.
The tax rate would not change, however this would allow for equal menu pricing between a restaurant that sells beer and wine with a mixed beverage permit ( covered by the 14% gross receipts tax) and a restaurant that sells beer and wine with a wine and beer retailers permit ( covered by the state sales tax).
Additionally, this change would elminate the current ‘tax on a tax’ situation. The Texas Comptroller has proposed rules that will require permittees to include taxes paid on mixed beverages in their receipts and pay franchise tax on that tax. Read more
Liquor wholesalers are seeking the authority to sell directly to mixed beverage and private club permittees. TRA’s position is that we want as many avenues for purchasing open to us as possible. Therefore we support wholesalers having the authority to sell directly to restaurants, but want package stores to continue to serve restaurants also.
Discussions around this issue, which have occured for several years, led to consideration of allowing package stores to sell outside of the county in which they are located. This would allleviate concerns with underserved areas and allow for higher volume package stores to compete for business with wholesalers. Read more
Statewide Smoking Ban
Local smoking restrictions vary widely and create disparities between different types of operations (bars and restaurants) and across city boundaries. These disparities have hurt the restaurant industry in Texas. A comprehensive smoking ban passed in the Texas House in 2007 but died in the Senate. There continues to be opposition to a ban. Proponents are looking at addressing the issue only in highly populated areas with many conflicting local city ordinances or limiting the ban to restaurants and bars. TRA’s Board of Directors will hear from legislative leaders as they consider this issue at our February board meeting.
This issue has been the focus of legislative debated for a number of sessions and appeared to be developing as one of the hot topics for this session as well. Proposals requiring that employers use the Federal E-Verify system and establishing sanctions for employers with undocumented workers were filed. However, both the Texas Republican Party and the Texas Federation of Republican Women have come out in support of comprehensive immigration reform. That, and the roll-out of a bi-partisan effort in Washington means that this issue may fade from the forefront of state legislative activity.
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