Ezel / Tax Rulings / TX
TX 8905L0945E12 Sales and/or Use Tax (State,Local,MTA) 1989-05-09

Were a hotel caterer's bartender, other labor, and setup fees taxable?

Short answer: All listed charges were taxable except a separately stated bartender fee for serving alcohol under a TABC mixed-beverage permit.

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This page answers the general question as of 1989. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1989
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official Texas Comptroller of Public Accounts letter published on the State Tax Automated Research (STAR) system. Letters on STAR can be the basis of a detrimental reliance claim only for the taxpayer to whom the letter was directly issued (see 34 Tex. Admin. Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded. Taxpayer-identifying details are redacted. This summary is informational only and is not legal or tax advice. Consult a licensed Texas tax professional about your specific situation.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page) is the authoritative source for any reliance.

Plain-English summary

For this hotel caterer, all listed on-property, off-property, and setup labor charges were taxable except one narrow category.

A separately stated bartender fee was nontaxable when it paid for serving alcoholic beverages under a mixed-beverage permit issued by the Texas Alcoholic Beverage Commission.

Common questions

Were ordinary catering labor and setup charges taxable? Yes.

When was the bartender fee nontaxable? When separately stated and connected with alcoholic-beverage service under the required mixed-beverage permit.

Source

Original ruling text

May 9, 1989

Dear ***:

Thank you for your letter of April 18, 1989, concerning the taxability of
various labor charges in relation to your catering activities.

As a hotel caterer, the charges for all of the items listed in your letter are
taxable except separately stated "bartender fee" if it is for the service of
alcoholic beverages under a mixed beverage permit issued by the Texas Alcoholic
Beverage Commission.

This opinion is based on the facts presented. If there are additional or
different facts, the opinion may change.

If you have any questions or need more information, please call our toll-free
number 1-800-252-5555. The regular number is 512/463-4600 ext 3-4684. You may
write me at Tax Correspondence, Comptroller of Public Accounts.

Sincerely,

Curt Swenson
Tax Correspondence

RE: LABOR FEE

PLEASE SEND ME THE BILLING ON THE FOLLOWING SITUATIONS:

THE BUSINESS IS A HOTEL. SOME OF OUR BUSINESS IS CATERING. CONCERNING THE
FOLLOWING SITUATIONS I HAVE GOTTEN AN ARRAY OF ANSWERS AS TO THE SALES
TAXABILITY BOTH FROM THE SALES TAX OFFICE AND THE COMPTROLLER.

  1. A BARTENDER FEE ON THE PROPERTY
  2. A LABOR CHARGE ON THE PROPERTY
  3. A LABOR CHARGE OFF THE PROPERTY
  4. LABOR CHARGE FOR SETTING UP

THANK YOU,

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