Rules & Regulations of the State of Tennessee
Title 1320 - Revenue
Subtitle 1320-04 - Miscellaneous Tax Division
Chapter 1320-04-04 - General Revenue Law
Section 1320-04-04-.01 - SALES OF MIXED DRINKS OR SETUPS

(1) The term "gross receipts" as set forth in Chapter 41, Title 67, Tennessee Code Annotated, for the purpose of determining the tax base, shall mean the total price for which mixed drinks or setups for mixed drinks are sold and shall include, but not be limited to, the cost of any services required to process the beverage for sale without any deductions therefrom on account of the cost of the beverage, the cost of materials used, losses, cost of entertainment, or any other expenses whatsoever. "Gross receipts" is further defined to be the price of the beverage listed on any menu, or wine or liquor lists, sold by any establishment selling mixed drinks or setups for mixed drinks. If the cost of entertainment is to be passed to the consumers of such beverage, it shall be in the form of a cover or admission charge separate and apart from the charge made for such beverages, and shall not be included in the price charged for such beverage. If any entertainment costs are included in the listed price of such beverages they shall be included in the gross receipts reported to this Department and be subject to the tax levied by said Chapter 41.

(2) In addition to the 15% gross receipts tax levied by said Chapter 41 upon mixed drinks or setups for mixed drinks, such drinks or setups shall likewise be subject to any applicable sales tax, both State and Local.