Alcohol Taxes May Jump 25% Higher

The owner of the Red Lion Pub in Houston pays about $10,000 in alcohol taxes each month, which is more than the rent for his bar. That’s about a quarter of a million dollars in alcohol taxes each two years.

But that high tax appears to be headed even higher. The Texas Senate has approved a 25% increase in the alcohol excise tax that wholesalers pay and pass on to restaurants, bars and stores.

Restaurant owner Youssef Nafaan reports that restaurants are already experiencing poor business and economic difficulties because of the steep increase in gas prices and other expenses that customers face. Mr. Nafaan expects many restaurants to be forced out of business because of the jump in the alcohol tax.

Restaurant and bar closings would put cooks, servers, bus persons, cleaners and other employees out of work. Many of those lucky enough to keep their jobs would receive fewer tips and lower incomes. Alcohol contributes about a quarter of a million jobs to the state.

A steep increase in alcohol taxes is a heavy burden on hospitality workers and would have a ripple effect throughout the entire state’s economy.


  • Wollam, Allison. Alcohol tax increase has retailers drowning sorrows. Houston Business Journal, May 13, 2005.

Filed Under: Alcohol Economics