How to Stay Compliant With Liquor Store Sales Taxes

Selling alcohol off-premise means alcohol is sold for consumption somewhere else. This includes liquor stores and packaged alcohol sales in grocery and convenience stores, such as sealed bottles and cans for takeout.

On the contrary, bars and restaurants are on-premises because drinks are consumed on-site.

Off-premise tax laws refer to the rules that determine what taxes apply to these to-go alcohol sales, how those taxes are calculated, and who is responsible for collecting, filing, and paying them.

The tricky part is that alcohol taxes are rarely a straightforward charge. They are usually a stack of different taxes and fees that show up in different places, including at the register and inside your wholesale costs.

A quick way to think about it is this three-part tax map:

• Customer-facing taxes: taxes you charge at checkout and later remit, often sales tax.
• Upstream/embedded taxes: costs built into wholesale pricing, often excise taxes.
• Location/channel rules: extra tax and compliance requirements based on how and where you sell, including delivery, online orders, and cross-city or cross-state sales.

In the following sections, you’ll learn which taxes to watch, how to set up a simple compliance routine, and what to double-check before adding delivery, e-commerce, or new locations.

Taxes You Charge Customers at the Register (The Ones You Usually Remit)

For most liquor stores and grocery retailers, the main tax you actively manage day to day is sales tax. This is the tax that appears on the receipt, gets collected from the customer, and is later remitted to the state (and sometimes local jurisdictions). 

While the concept is simple, the details can change fast because alcohol taxability varies by state and sometimes by product type. In some places, alcohol is taxed like other retail goods. In others, certain alcohol products are taxed differently or face additional charges. The safest assumption is that you need to verify the rules where you operate, rather than copying what another store does in a different county or state.

Another common source of errors is rate layering. Even if your state rate is consistent, local rates can vary by county, city, or special district. That means two stores in the same state can legally charge different total rates. 

If you deliver, the correct rate may depend on where the customer receives the order, so it is worth treating delivery tax as its own setup step instead of “same as in-store.”

Also watch for alcohol-specific add-ons. Some jurisdictions apply extra alcohol fees or special local taxes in addition to the regular sales tax. These can be easy to miss because they may not apply statewide.

The most logical place to handle liquor sales taxes is a liquor-specific POS. It helps you standardize how taxes are applied by mapping each product to the correct tax category (beer, wine, spirits, non-alcoholic, and any deposits or fees where applicable). 

A good system can also track sales across all channels in one place, including in-store, online orders, and delivery, which makes reporting and reconciliations much easier. 

Avoid manual tax overrides because they create inconsistencies and make returns harder to reconcile. Pay special attention to bundles and promos, like gift baskets, mixed-item discounts, or “buy two get one” deals, since tax rules can treat bundled pricing differently. 

Many liquor-focused POS platforms can also integrate with bookkeeping and tax tools such as QuickBooks, so your sales data flows cleanly into your accounting and tax management workflow.

Taxes You Don’t Usually “Charge” But Still Pay For (Excise Taxes + Wholesale Invoices)

Not every alcohol tax shows up on a customer’s receipt. One of the biggest behind-the-scenes costs is excise tax, which is usually charged earlier in the supply chain. 

Unlike sales tax, excise tax is often volume-based (for example, a certain amount per gallon or barrel), and it is commonly paid by the producer, importer, or distributor. 

By the time the product reaches your store, that tax is typically already baked into your wholesale price. You may not “charge” it to customers directly, but you still pay for it through higher inventory costs, which affect your margins and pricing decisions.

That is why retailers should treat excise taxes as part of their tax planning. If excise costs rise or if you bring in a new product type with a different excise structure, your cost of goods changes immediately. Over time, that can make the difference between a healthy margin and a product that quietly underperforms.

Your best tool here is your distributor invoice. Use it as a compliance and accuracy check, not just a bill to pay. Look for line items that mention taxes, surcharges, bottle deposits, or special fees. Some invoices itemize these charges clearly, while others include them in the unit price. 

If something looks off, like the wrong product category or a confusing surcharge, ask your distributor to explain it and correct it if needed.

Situations Where Alcohol Taxes Get Messy (Delivery, Online Orders, Multi-Location, Special Sales)

Taxes get complicated fast when you sell outside a simple in-store checkout. A few common trouble spots to plan for include delivery, shipping, and third-party platforms.

Watch these scenarios:

• Delivery and curbside pickup: The “right” sales tax rate may depend on where the customer receives the order, not just your store location. Keep basic delivery records (date, address, items sold) and document age verification.
• Shipping to another state: Treat this as a “do not guess” area. Shipping rules vary widely, and you may need specific licenses and tax registrations before you accept out-of-state orders. 
• Marketplace and delivery apps: Confirm who is the seller of record and who remits sales tax. Some platforms collect tax, others pass it to the retailer to file. Misunderstandings can lead to under-collection or double collection. 
• Non-standard sales: Corporate gifting, subscriptions, bundles, pop-ups, and off-site events can trigger different licensing, documentation, or tax sourcing rules. 

A good practice to stay safe is to run this quick 3-check before launching anything new:

• License: Confirm your license privileges cover the new activity (delivery, shipping, off-site sales).
• Tax registration: Confirm you’re registered to collect and file tax in the correct jurisdiction.
• Responsibility: Confirm who collects and remits the tax (you vs. a partner/platform).

Your Compliance System (Permits, Filing Routine, Recordkeeping That Doesn’t Break You)

Staying compliant is less about “knowing every rule” and more about building a simple system you can repeat every month.

Before you sell:

• Confirm your alcohol license is active and you have the right tax registrations (sales tax permit, plus any delivery or shipping permits if you offer those channels).
• Assign a clear owner for compliance (you, a bookkeeper, or your CPA), so filings never get missed.

A monthly routine that works:

• Pull your POS sales and tax reports.
• Reconcile tax collected against deposits and gross sales.
• File returns, pay on time, and save proof of filing and payment in one folder.

Records worth keeping (minimum):

• POS daily summaries and monthly tax reports
• Distributor invoices and receiving records
• Refunds, voids, and any exemption paperwork
• Delivery/shipping logs if you sell off-site

POS setup basics:

• Use clean product categories (beer, wine, spirits, RTDs) and test common transactions (bundles, discounts) so taxes calculate correctly.

The goal is boring consistency. If your process is repeatable, mistakes stand out fast, and audits are much less stressful.

Make Bookkeeping an Easy and Seamless Part of Your Workflow

Santé POS is built for liquor retail, so it helps you keep tax-related data clean without extra spreadsheets. 

It supports liquor-specific setup, such as bottle deposits by category, product packs, and mix-and-match promos, and it maps product details across wine, spirits, beer, RTDs, and more. It also keeps in-store, online, and delivery app orders in one system (including DoorDash and Instacart), making reporting much easier.

Additionally, Santé features cutting-edge AI tools that can help automate back-office work. For example, its AI-powered receiving can scan invoices, reducing manual data entry and making it easier to keep your inventory and accounting records accurate for tax time.

For accounting, Santé syncs in-depth sales and accounts payable data with QuickBooks, so your books stay aligned when it’s time to reconcile and file.

Book a demo and see how much simpler next month’s tax reporting can feel with Santé POS.