A question about the pricing of beer.

Spiny Norman · Jul 3, 2007

In most bars a beer or a pint of beer comes to a nice, even number, like four fifty or five twenty five or something. I've always assumed that this has been adjusted for sales tax.

So, my question is, if a beer costs 5.25 and the sales tax for the alcohol in the area is 6.25, then the actual price of a beer would be 4.94, right?

I'm not asking anyone to check my math, I'm just checking to see that that's how bars actually work.

Kentuk · Jul 3, 2007

For a bar you want to backward figure. Start with the price of say five dollars, and figure out how much the state gets, what is left is the menu price. I believe in many areas retail food and drink isn't subject to sales tax.

Haggis · Jul 3, 2007

Kentuk said:
For a bar you want to backward figure. Start with the price of say five dollars, and figure out how much the state gets, what is left is the menu price. I believe in many areas retail food and drink isn't subject to sales tax.

It does differ from state to state. In Michigan, liquor/beer isn't taxed until you order food. From that point on all future drinks are also taxed.

Makes no sense, I know.

TrainofThought · Jul 3, 2007

From my days of bartending, the register was pre-programmed for 2.50, 3.75, so the only tax that showed was when food was ordered. If a customer sat down and ordered a pint, it was 2.75 without sales tax. As Haggis stated, it differs from state to state.

Spiny Norman · Jul 3, 2007

Hmmm.... I wasn't aware that was how things worked.

Interesting.

III · Jul 3, 2007

A buddy of mine owns a bar and he said in Texas if you only sell beer, you pay one tax rate, but if you sell alcohol and beer, both are taxed at a higher rate. Not sure if that actually helps...

Spiny Norman · Jul 3, 2007

Yeah, with Texas it has the TABC, which messes it all up.

If it's a flat rate then that's something. It's not necessary, but one of the characters plays a math game with the pricing of beer, so I would prefer it be legit.

The Grift · Jul 3, 2007

I've been in bars where if I order something with cash, they might say "four bucks," but if I pay for the same drink with a credit card the receipt comes back as 3.64 or whatever so that with tax it's about 4 bucks. But it sounds like it's very region and establishment-specific. I would recommend contact the sort of watering hole in your story in the place your story takes place in. Or better yet, go there and have nine or ten pints.

JoniBGoode · Jul 3, 2007

Tax Included In Drink Price

I've managed restaurants and bars in IL, TX and WI, and yes, the tax is included in the "per drink" price. So, if a mixed drink sells for $4.25, that may actually be $3.67 plus tax.

While several states charge no tax on retail food sold in grocery stores, virtually all charge tax on restaurant food. Every state charges a tax on liquor, and normally a higher tax for on-premise consumption in a bar or restaurant. Liquor and restaurant meals are considered luxuries, so they're often more heavily taxed than other items.

Here's a link that shows the tax rate for beer in all 50 states plus the District of Columbia. http://www.taxadmin.org/FTA/rate/beer.html

Here's one for liquor: http://www.taxadmin.org/fta/rate/liquor.html

HTH

Spiny Norman · Jul 5, 2007

Wow, thanks! That's really useful!

A question about the pricing of beer.

Spiny Norman

Kentuk

I want to write what I want to write

Haggis

Evil, undead Chihuahua

TrainofThought

A flowering bud of bitchiness

Spiny Norman

III

rockin the suburbs

Spiny Norman

The Grift

Tom Swiftly's Favorite Adverb

JoniBGoode

Spiny Norman