Mixed Beverage Permit vs. Beer and Wine Permit: The Key Differences
For most restaurants and bars in Texas, the central licensing decision comes down to two options: a mixed beverage permit or a beer and wine permit. The choice shapes what the business can pour, how it is taxed, and what it costs to operate, so getting it right matters from day one. The two permits are not simply bigger and smaller versions of the same thing; they differ in kind. This article compares them on the points that actually drive the decision, so a business can match the permit to its model.
What each permit allows
The defining difference is the product. A mixed beverage permit, often abbreviated MB, authorizes the sale of all alcoholic beverages for on-premise consumption, including distilled spirits. A business with a mixed beverage permit can run a full bar: cocktails, liquor, wine, and beer.
The beer and wine permit, known formally as the Wine and Malt Beverage Retailer’s Permit and carrying the code BG, is narrower. It authorizes beer and malt beverages along with wine, but only wine up to 17 percent alcohol by volume, and it does not allow distilled spirits at all. A business with this permit can serve a wine list and a beer selection but cannot make or pour a liquor-based cocktail. That single line, no spirits, is the heart of the distinction and the reason a true bar needs the mixed beverage permit while a restaurant content with beer and wine can use the narrower one.
How taxes differ
The two permits live in different tax worlds, which is one of the less obvious but more consequential differences. Sales under a mixed beverage permit are subject to the mixed beverage taxes: a mixed beverage gross receipts tax of 6.7 percent, paid by the permit holder and not addable to the customer’s price, plus a mixed beverage sales tax of 8.25 percent, which the business may pass through to the customer. Both apply to the alcoholic beverages sold by a mixed beverage permittee.
A beer and wine permit operates under ordinary sales tax rather than the mixed beverage gross receipts tax. For the business, that changes both the math and the paperwork. The mixed beverage gross receipts tax in particular is a cost the holder absorbs rather than a line item customers pay, so a business weighing the two permits is also weighing two different tax structures, not just two product ranges.
Cost, bonds, and overhead
The permits differ in their surrounding obligations as well. Mixed beverage permits generally sit at the higher end of permit costs, reflecting the broader authority they grant. Bonding can differ too: the conduct surety bond and, in certain large counties, a performance bond may come into play depending on the permit and whether the business holds a Food and Beverage Certificate.
The Food and Beverage Certificate interacts with both permits and can soften some of these costs for qualifying restaurants, including exemption from the conduct surety bond. A business comparing the two permits should look past the headline permit fee to the full picture of taxes, bonds, and certificates, because those ongoing factors often matter more over time than the initial cost of the permit itself. A permit that looks cheaper at the counter can prove more expensive in operation once its taxes and bonding are counted, so the comparison that matters is the total annual cost, not the application fee.
Matching the permit to the business
The decision usually resolves around one question: does the concept need spirits? A cocktail bar, a steakhouse with a full bar, or any venue whose identity includes liquor needs the mixed beverage permit, full stop. A casual restaurant, a pizzeria, a cafe, or a wine bar that is satisfied with beer and wine can often operate well on the beer and wine permit, with simpler taxes and lower overhead.
It is also worth thinking ahead. A business that starts with beer and wine but expects to add cocktails later faces a future upgrade, so some owners choose the mixed beverage permit from the start to avoid re-permitting. The right answer depends on the menu the business actually intends to run, now and in the foreseeable future.
Switching or upgrading later
Business models change, and a restaurant that opened with beer and wine may later decide to add a cocktail program. Doing so generally means moving up to a mixed beverage permit rather than simply amending the existing one. Because the two permits authorize different products and carry different tax treatment, the change is a genuine permitting step, not a quick edit, and it takes time to complete and may pause the new offering until it clears.
That reality is why the choice deserves real thought at the outset. An owner who can foresee spirits in the future weighs the ongoing cost of holding a mixed beverage permit from the start against the cost and delay of upgrading later. Neither path is wrong, but the decision is easier and cheaper to make before opening than to revisit once the business is running and a planned menu change is waiting on a new permit to be issued.
Consider two restaurants opening on the same street. The first is a trattoria that plans to serve only Italian wines and a few beers; the beer and wine permit fits cleanly, keeps it under ordinary sales tax, and may pair with a Food and Beverage Certificate to avoid the conduct bond. The second is a modern American restaurant with a craft cocktail program; it needs the mixed beverage permit, accepts the mixed beverage taxes, and budgets for the higher overhead. Each chose correctly, because each matched the permit to what it actually pours.
The bottom line is that the mixed beverage permit and the beer and wine permit differ in product authority, taxation, and cost. The mixed beverage permit allows spirits and carries the mixed beverage taxes and higher overhead; the beer and wine permit stops at beer and wine up to 17 percent and runs on ordinary sales tax. The decision follows from the menu: if the business needs liquor, only the mixed beverage permit will do.
Frequently Asked Questions
Can a restaurant serve cocktails on a beer and wine permit?
No. The beer and wine permit, formally the Wine and Malt Beverage Retailer’s Permit, allows beer, malt beverages, and wine up to 17 percent alcohol by volume, but not distilled spirits. Any business that wants to serve liquor-based cocktails needs a mixed beverage permit.
Why does the tax treatment matter so much between the two?
Because a mixed beverage permit triggers the mixed beverage gross receipts tax of 6.7 percent, which the business pays and cannot add to the customer’s bill, on top of the mixed beverage sales tax. A beer and wine permit operates under ordinary sales tax, so the two permits carry genuinely different cost structures beyond the price of the permit.
Should a new business get the mixed beverage permit just in case?
It depends on the plan. A business that may add spirits later sometimes chooses the mixed beverage permit upfront to avoid re-permitting, but that means accepting higher costs and the mixed beverage taxes from the start. A business confident it will stay with beer and wine often does better with the narrower permit.
This article is general information comparing TABC permit types. It is not legal advice and does not create an attorney-client relationship. Permit authority, taxes, and costs can change and depend on the specific business. Anyone choosing between permits should confirm current requirements with TABC or a qualified Texas attorney.
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