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Tipsy on Tennessee liquor taxes

Published: Jan. 30, 2009 at 10:59 PM CST|Updated: Jan. 30, 2009 at 11:06 PM CST
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Some folks are getting a little confused over alcohol taxes at Tennessee restaurants.

Seems the math alone is making them a little tipsy!

"Kim" had dinner and drinks the other night at one of her favorite haunts in Cordova, TN.

She says she got confused when she was charged a COMBINED tax of 24 percent, basically combining the Tennessee liquor-by-the-drink 15% tax plus the state and local sales tax.

Kim wrote:

"...is it legal to charge both the 15% and the 9.25%? Also, is it different for beer and for liquor drinks?"

Second question first, Kim:  no, the liquor tax is not different for liquor and beer in Tennessee restaurants.

In Tennessee, you have a 15 percent LBD tax.  LBD stands for 'liquor-by-the-drink."

The state also has a 7 percent state sales tax on the drink.  Remember, the food and drinks at restaurants are not taxed at the lower rate that food and drinks at supermarkets are taxed.

Then there's a 2.25 percent local option sales tax.

Sophie Moery, spokesperson for the Tennessee Department of Revenue, says the LBD and sales taxes are applied separately to the base cost of the drink, then combined in the total bill.

If you ever suspect a Tennessee restaurant is intentionally miscalculating any of the taxes on an alcoholic beverage, you can call the revenue department's fraud line at 1-800-FRAUDTX.

Don't ask me why they use T-X instead of T-N.

Moery and her colleagues poured over Kim's drink bill.  They didn't find anything fuzzy with the restaurant's math.