Texas Comptroller of Public Accounts    STAR System


December 30, 2009


Dear **************:

Thank you for your question concerning the use of a token system for the 
purchase of beer and liquor at the fairgrounds during the ************** 

You stated the primary concessionaire for the ************** Center claimed he 
was not able to utilize tokens for point of purchase beer/liquor sales due to 
Texas Alcoholic Beverage Commission (TABC) law. Specifically, he said he must 
report taxes to TABC based off of all tokens sold, not those redeemed for 
alcoholic beverages. Carolyn Beck, Public Information Officer for the TABC, 
confirmed there were no TABC policies prohibiting the use of a token system for 
food, carnival sales and alcoholic beverage sales.

You asked if there are any tax laws or policies that would prohibit RODEO from 
including alcohol sales in a redemption process and to confirm that alcohol 
sales can be reported solely on redemption of tokens used for alcohol purchases 
and not based off of the total number of tokens sold.

There are no laws or policies that prohibit including alcohol sales in a 
redemption sales process, such as using tokens, tickets, coupons, etc., to 
purchase alcoholic beverages. Rule 3.1001, relating to mixed beverage gross 
receipts tax, even provides in subsection (c)(10) that taxable mixed beverage 
receipts includes receipts from, “all sales of coupons, tokens, tickets, etc., 
that are redeemed or used in any manner to purchase or pay for the service of 
an alcoholic beverage.”

Alcoholic beverages may, therefore, be sold by use of a token system. Mixed 
beverage gross receipts tax is reported and paid based on the tokens that are 
redeemed or used for the service of an alcoholic beverage and not on the total 
number of tokens sold. See also STAR document 9702248L.

Links to the rule, our State Tax Automated Research system and other tax 
information are on our “Mixed Beverage Tax” Web page at 

This opinion is based on the facts presented and current law. Other facts, 
though similar, may result in different answers.

If you or the concessionaire have questions or need more information, please 
contact me.

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Donald S. Dillard
Oil & Gas, Fuels and Miscellaneous Taxes
Tax Policy Division
Texas Comptroller of Public Accounts

cc:  **************

DATE: 12/30/2009