Wray files bill to reduce mixed beverage tax

John Wray was sworn in as the new Texas State Representative of House District 10 on Jan. 13, 2015.

AUSTIN — In order to bring greater transparency to the tax code and cut the overall mixed beverage tax, Rep. John Wray filed H.B. 4039. Currently, Texans who purchase a beverage at certain restaurants, hotels or bars pay a total of 14.95% in taxes: 6.7% in gross receipts tax and 8.25% tax on the price of the item sold, prepared, or served. The gross receipts tax is hidden in the cost of an item and is not reported on the physical receipt received by the customer after the purchase. H.B. 4039 would repeal the gross receipts tax entirely, shift a portion of the revenue loss to the tax on the price of the item sold, and reduce the total effective tax rate to 14%.

"The tax code is riddled with hidden costs to the consumer. This lack of transparency allows government to increase hidden taxes without the impact being apparent to the public. The taxpayer has the right to know when he or she is paying a tax, and the amount of the tax being paid. Transparency is fundamental to fiscal responsibility, and that's all the more true when it comes to taxes. This bill also reduces the net tax rate from 14.95% to 14%. After all, Texans know how to spend their money far better than the government," Wray said.

If passed by the legislature, H.B. 4039 would take effect on September 1, 2015.