By Wilson H.B. No. 3004 75R6265 PAM-D A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to transferring certain responsibilities relating to the 1-3 tax on mixed beverages from the comptroller, to the Texas Alcoholic 1-4 Beverage Commission; providing penalties. 1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-6 SECTION 1. Title 5, Alcoholic Beverage Code, is amended by 1-7 adding Chapter 202 to read as follows: 1-8 CHAPTER 202. MIXED BEVERAGE TAX 1-9 SUBCHAPTER A. GENERAL PROVISIONS 1-10 Sec. 202.01. DEFINITIONS. In this chapter: 1-11 (1) "Permit holder" means a holder of a mixed beverage 1-12 permit, a private club registration permit, a private club 1-13 exemption certificate permit, a private club late hours permit, a 1-14 daily temporary private club permit, a private club registration 1-15 permit who also holds a food and beverage certificate, a daily 1-16 temporary mixed beverage permit, a mixed beverage late hours 1-17 permit, a mixed beverage permit who also holds a food and beverage 1-18 certificate, or a caterer permit. 1-19 (2) "Business day" means the period beginning at 3 1-20 a.m. one day and ending at 3 a.m. the next day. 1-21 (Sections 202.02-202.20 reserved for expansion 1-22 SUBCHAPTER B. MIXED BEVERAGE TAX 1-23 Sec. 202.21. TAX IMPOSED ON MIXED BEVERAGES. A tax at the 1-24 rate of 14 percent is imposed on a permit holder's gross receipts 2-1 received from the sale, preparation, or service of mixed beverages 2-2 or from the sale, preparation, or service of ice or nonalcoholic 2-3 beverages that are sold, prepared, or served for the purpose of 2-4 being mixed with an alcoholic beverage and consumed on the premises 2-5 of the permit holder. 2-6 Sec. 202.22. TAX RETURN DUE DATE. (a) A permit holder 2-7 shall file a tax return with the commission not later than the 20th 2-8 day of each month. 2-9 (b) The return under this section must be in a form 2-10 prescribed by the commission and must include a statement of the 2-11 total gross taxable receipts during the preceding month and any 2-12 other information required by the commission. 2-13 (c) A tax due for a business day that falls in two different 2-14 months is allocated to the month in which the business day begins. 2-15 Sec. 202.23. PAYMENT. The tax due for the preceding month 2-16 shall accompany the return and shall be payable to the state. The 2-17 commission shall deposit the revenue in the mixed beverage tax 2-18 clearance fund. 2-19 (Sections 202.24-202.40 reserved for expansion 2-20 SUBCHAPTER C. RECORDS RETENTION 2-21 Sec. 202.41. RECORDS OF TAX RECEIPTS. (a) Each permit 2-22 holder shall make and keep a record, in a form prescribed by the 2-23 commission, of all tax receipts, including the total tax receipts 2-24 for each business day. 2-25 (b) Permit holders, excluding daily temporary mixed beverage 2-26 permit holders, shall keep a copy of the record required by this 2-27 section and other records of receipts and disbursements by the 3-1 permit holder on file on the holder's premises for a period of two 3-2 years. The record is open to inspection by any agent of the 3-3 commission or by any peace officer at any time. 3-4 Sec. 202.42. RECORDS AT SINGLE LOCATION. (a) If two or 3-5 more establishments operated under a permit referenced in Section 3-6 202.01(1) are located in the same county and are under the same or 3-7 substantially the same ownership, the holder of the permit may 3-8 apply to the commission, on a form furnished by the commission, for 3-9 permission to keep all required records for the establishments at a 3-10 single location in the county. The single location does not need 3-11 to be the licensed premises of one of the establishments. 3-12 (b) If the commission approves the application, the 3-13 commission must provide written approval and may impose any 3-14 conditions regarding the keeping of the records that the commission 3-15 finds appropriate. 3-16 (c) If records are kept at a single location under this 3-17 section, the records for each establishment must be kept 3-18 separately. 3-19 Sec. 202.43. COMMISSION RECORD OF TAX RECEIPTS. The 3-20 commission shall keep a record indicating the name of the permit 3-21 holder from whom each return is received, the municipality, if any, 3-22 and county in which the permit holder's premises are located, and 3-23 the amount of the tax received. 3-24 (Sections 202.44-202.60 reserved for expansion 3-25 SUBCHAPTER D. MIXED BEVERAGE TAX CLEARANCE FUND 3-26 Sec. 202.61. MIXED BEVERAGE TAX CLEARANCE FUND. (a) Not 3-27 later than the last day of the month after a calendar quarter, the 4-1 commission shall compute the total amount of taxes received during 4-2 the preceding quarter from permit holders outside of any 4-3 municipality within each county and the total amount received from 4-4 permit holders within each municipality in each county. The 4-5 commission shall forward the computations to the comptroller not 4-6 later than the first day of the month after the month the 4-7 commission performs the computations required by this subsection. 4-8 (b) The comptroller shall issue to each county a warrant 4-9 drawn on the mixed beverage tax clearance fund in the amount of 4-10 10.7143 percent of receipts from permit holders that are outside of 4-11 any municipality within the county during the preceding quarter and 4-12 shall issue to each municipality a warrant drawn on that fund in 4-13 the amount of 10.7143 percent of receipts from permit holders 4-14 within the municipality during the preceding quarter. The 4-15 comptroller shall transfer the remainder of the receipts for that 4-16 quarter and all interest earned on money in the fund to the general 4-17 revenue fund. 4-18 Sec. 202.62. CONFLICT OF RULES. If a rule or policy adopted 4-19 by the commission conflicts with a rule adopted by the comptroller 4-20 for the application, enforcement, or collection of the tax imposed 4-21 by this chapter, the comptroller's rule prevails. A conflicting 4-22 rule or policy adopted by the commission is invalid to the extent 4-23 of the inconsistency. If the comptroller determines that a rule or 4-24 policy adopted by the commission conflicts with one adopted by the 4-25 comptroller relating to the application, enforcement, or collection 4-26 of the tax imposed by this chapter, the comptroller shall notify 4-27 the commission in writing of the determination. After receipt of 5-1 the notification, the commission shall amend or repeal the 5-2 conflicting rule or policy not later than the 90th day after the 5-3 date of notification. 5-4 Sec. 202.63. SECURITY REQUIREMENT. (a) A permit holder 5-5 subject to the tax imposed by this chapter must comply with the 5-6 security requirements imposed by Chapter 151, Tax Code, except that 5-7 a permit holder is not required to comply with Section 151.253(b), 5-8 Tax Code. 5-9 (b) The total of bonds, certificates of deposit, letters of 5-10 credit, or other security required of a permit holder subject to 5-11 the tax imposed by this chapter must be in an amount that the 5-12 commission determines to be sufficient to protect the fiscal 5-13 interests of the state, except the commission may not set the 5-14 amount of security at less than $1,000 or more than $25,000. 5-15 Sec. 202.64. AUDIT FREQUENCY. (a) The commission shall 5-16 have the discretion to determine the frequency of mixed beverage 5-17 tax audits. In determining the frequency of audits the commission 5-18 may consider the following factors: 5-19 (1) reasonable and prudent accounting standards; 5-20 (2) the audit history of the permit holder; 5-21 (3) the effect on state revenues; and 5-22 (4) other factors the commission considers 5-23 appropriate. 5-24 (b) When additional taxes are established as due based on an 5-25 audit by the commission, a penalty equal to 10 percent of the 5-26 additional taxes due shall be collected with the additional taxes 5-27 due. 6-1 Sec. 202.65. CREDITS AND REFUNDS FOR BAD DEBTS. (a) A 6-2 permit holder may withhold the payment of the tax on a portion of 6-3 the gross receipts that remains unpaid by a purchaser if: 6-4 (1) during the reporting period in which the mixed 6-5 beverage is sold, the permit holder determines that the unpaid 6-6 portion will remain unpaid; 6-7 (2) the permit holder enters the unpaid portion of the 6-8 sales gross receipts in the permit holder's books as a bad debt; 6-9 and 6-10 (3) the bad debt is claimed as a deduction for federal 6-11 tax purposes during the same or a subsequent reporting period. 6-12 (b) If the portion of a debt determined to be bad under 6-13 Subsection (a) is paid, the permit holder shall report and pay the 6-14 tax on the portion during the reporting period in which payment is 6-15 made. 6-16 (c) A permit holder is entitled to credit or reimbursement 6-17 for taxes paid on the portion of the gross receipts determined to 6-18 be worthless and actually charged off for federal income tax 6-19 purposes. 6-20 (Sections 202.66-202.80 reserved for expansion 6-21 SUBCHAPTER E. PENALTY PROVISIONS 6-22 Sec. 202.81. CIVIL PENALTY FOR FAILURE TO FILE OR PAY. If a 6-23 permit holder fails to file a return or to pay to the commission 6-24 the tax as required by this chapter when the return or payment is 6-25 due, the permit holder shall forfeit an amount equal to five 6-26 percent of the amount due as a penalty, and after 30 days the 6-27 penalty is increased to 10 percent of the amount due. 7-1 Sec. 202.82. CRIMINAL PENALTY FOR VIOLATIONS. (a) A person 7-2 commits an offense if the person: 7-3 (1) fails to keep a record as required by this 7-4 chapter; 7-5 (2) fails to file a return as required by this 7-6 chapter; 7-7 (3) keeps a false record; or 7-8 (4) files a false return. 7-9 (b) An offense under this section is punishable by: 7-10 (1) a fine of not more than $1,000; 7-11 (2) by confinement in the county jail for not more 7-12 than 30 days; or 7-13 (3) by both a fine and confinement. 7-14 Sec. 202.83. CRIMINAL PENALTY FOR AGGRAVATED VIOLATIONS. 7-15 (a) A person commits an offense if the person knowingly: 7-16 (1) fails to keep any record as required by this 7-17 chapter; 7-18 (2) fails to file a return as required by this 7-19 chapter; 7-20 (3) keeps a false record; or 7-21 (4) files a false return. 7-22 (b) An offense under this section is punishable by: 7-23 (1) a fine of not less than $500 or more than $1,000; 7-24 and 7-25 (2) confinement in the county jail for not less than 7-26 30 days or more than two years. 7-27 (c) The commission shall cancel the permit of a permit 8-1 holder found by the commission, after notice and hearing, to have 8-2 violated or have been convicted of violating this section. 8-3 Sec. 202.84. SUMMARY SUSPENSION. (a) If a permit holder 8-4 fails to file a return or make a tax payment as required by this 8-5 chapter, the commission may summarily suspend the permit without a 8-6 hearing. Chapter 2001, Government Code, does not apply to the 8-7 commission in the enforcement and administration of this section. 8-8 (b) A suspension under this section takes effect on the 8-9 third day after the date the notice of suspension is given. The 8-10 notice shall be given to the permit holder or the holder's agent, 8-11 servant, or employee by registered or certified mail if not given 8-12 in person. 8-13 (c) The commission shall terminate a suspension made under 8-14 this section when the permit holder files the required returns and 8-15 makes the required tax payments, including payment of any penalties 8-16 that are due. 8-17 Sec. 202.85. VIOLATORS INELIGIBLE FOR PERMIT. (a) The 8-18 commission may not issue a mixed beverage, daily temporary mixed 8-19 beverage, or private club registration permit to: 8-20 (1) a person whose permit was canceled for a violation 8-21 of Section 28.06(c) or 202.83; 8-22 (2) a person who held an interest of any kind in a 8-23 permit that was canceled for a violation of Section 28.06(c) or 8-24 202.83; 8-25 (3) a person who held 50 percent or more of the stock, 8-26 either in the person's own name or by any other means, of a 8-27 corporation whose permit was canceled because of a violation of 9-1 Section 28.06(c) or 202.83; 9-2 (4) a corporation if any person holding more than 50 9-3 percent or more of the stock, either in the person's own name or by 9-4 any other means, is disqualified from obtaining a permit in the 9-5 person's individual capacity because of a violation of Section 9-6 28.06(c) or 202.83; or 9-7 (5) a person residentially domiciled with a person who 9-8 is barred from obtaining a permit because of a violation of Section 9-9 28.06(c) or 202.83. 9-10 (b) For the purposes of this section, a person holds 50 9-11 percent or more of the stock in a corporation if the person and the 9-12 person's parents, children, and siblings, and all persons with whom 9-13 the person is residentially domiciled, together own 50 percent or 9-14 more of the stock in the corporation. 9-15 SECTION 2. Chapter 183, Tax Code, is repealed. 9-16 SECTION 3. (a) This Act takes effect January 1, 1998. 9-17 (b) To prepare for the transfer of the administration of the 9-18 mixed beverage tax from the comptroller of public accounts to the 9-19 Texas Alcoholic Beverage Commission on the effective date of this 9-20 Act, the commission and the comptroller may enter into any 9-21 agreement they consider advisable for the use or transfer of funds, 9-22 appropriations, personnel, furniture, equipment, office space, or 9-23 other items or services between the commission and the comptroller. 9-24 (c) On January 1, 1998, all employees, records, and property 9-25 of the comptroller relating to the mixed beverage tax shall be 9-26 transferred to the Texas Alcoholic Beverage Commission. Before 9-27 that date, the comptroller may transfer any records, employees, or 10-1 property of the comptroller to the Texas Alcoholic Beverage 10-2 Commission in preparation for the transfer of the administration of 10-3 the mixed beverage tax to the commission. 10-4 (d) A change in law made by this Act does not affect the 10-5 validity of any action or proceeding initiated before the effective 10-6 date of this Act. 10-7 SECTION 4. The importance of this legislation and the 10-8 crowded condition of the calendars in both houses create an 10-9 emergency and an imperative public necessity that the 10-10 constitutional rule requiring bills to be read on three several 10-11 days in each house be suspended, and this rule is hereby suspended.