blog

Jul 31, 2020

During COVID-19, outdoor seating at restaurants is a popular option among diners. We have been working with several owners to expand their premises to include additional exterior space during the pandemic.

In order to legally serve beer, wine and spirits in added exterior space, you will need to file an amendment application with the Tennessee ABC and consult with your local beer board. In Nashville, the Metro Beer Board requires an application and payment of the $250 fee.

The ABC has a streamlined process for the expansion application. See details in the attached press release.

Governor Lee waived the $300 application fee for the expansion, by Executive Order 55.  The ABC does not require a separate application to remove the expansion space – at the end of the season or after the pandemic has concluded, whenever that might be.

We have also been working with clients interested in converting from a limited service restaurant license to a full-service restaurant license. Nashville is using the ABC license type to close bars. This allows your establishment to stay open during this and future COVID spikes.

We applaud Tennessee restaurant and bar owners as they continue to improvise and innovate during these difficult times.

The beerded lady reminds us of a timely tune, “Heroes” by David Bowie:

Though nothing will drive them away

We can beat them, just for one day

We can be heroes, just for one day

blog

Jul 24, 2020

Chief Medical Director of Health Michael C. Caldwell issued an order closing dining rooms at all food service establishments at 10 p.m. each evening, beginning this Friday, July 24, 2020. 

Mayor Cooper announced the new closing time earlier in the week, citing crowding on Lower Broad.

This means that restaurants and bars, including restaurants and bars at hotels, must close at 10 p.m.  We got clarification that the order applies to hotels, and any other food service establishment located inside a larger facility.

The order specifies that “all customers shall be off-premise and the premise closed to the public at 10 p.m.”  This doesn’t mean that 10 p.m. is last call – everyone needs to be out the door by 10 p.m. 

Attached is a copy of the order.

After 10 p.m., restaurants and bars are limited to takeout, drive through, curbside and off-premise delivery of food.  No alcohol after 10 pm.  

Limited service license holders and beer only permittees are closed through July 31, 2020.  Read more at our post here. 

Semisonic seems apt:

Closing time

One last call for alcohol so finish your whiskey or beer.

Closing time

You don’t have to go home but you can’t stay here

blog

Jul 23, 2020

Beginning 12:01 a.m. on Friday, Aug. 7 and ending 11:59 p.m. on Sunday, Aug. 9, Tennesseans can enjoy food and drink at their favorite restaurant — without paying sales tax.  We have been hearing lots of questions:

What types of businesses are included?
Are liquor by the drink taxes exempt? 
How do I file my tax return for sales without taxes? 

The law specifically applies to the retail sale of food and drink by restaurants and limited service restaurants, as defined in state law.  The holiday does not apply to hotels, premier type tourist resorts, caterers and other special license types.  The holiday also does not apply to breweries, distilleries and beer bars, unless the establishment holds a restaurant or limited service license.  And no holiday for wine and beer sales at groceries, C Stores and liquor stores.

Look at your license on the wall.  If the license says restaurant or limited service license, the sales tax holiday applies to your sales.  If it does not, you must collect and pay over sales tax.  Samples of restaurant and limited service licenses are at the links.

Failure to pay taxes means that you could be liable for back taxes, plus penalties and interest.

What’s in a name?  For the tax-free holiday weekend, the name says it all:  Sales Tax Holiday. 

Just like the name implies, the holiday only applies to sales tax.  You must collect and pay over liquor by the drink taxes.

Because this is the first sales tax holiday for restaurants, please take some time to ensure that you properly fill out the sales tax return.  List exempt sales for the holiday on your sales tax return at Schedule A, Line 10.  See this sample return. 

All this talk of holidays has us humming one of our favorite yuletide carols: Holiday in Cambodia by the Dead Kennedys.

It’s a holiday in Cambodia

It’s tough, kid, but it’s life

It’s a holiday in Cambodia

Don’t forget to pack a wife

As a bonus, sales of apparel are tax exempt. Sell all your hats, shirts, boxers – you name it.

Apparel sales are tax exempt  Friday, July 31 through Sunday, August 2 and Friday, Aug. 7 through Sunday, Aug. 9. Yes, breweries, distilleries and wineries qualify for the sales tax exemption for apparel.

My daughter Ella is looking forward to showing off her Whiskey Defender shirt featuring Nelson’s Greenbrier distillery cat Sugar Maple. Forget the high school dress code, right?

blog

Jul 2, 2020

Metro Nashville has issued clarifying guidance for re-entering revised Phase Two, which begins July 3, 2020.

Citing the spike in cases reported after the Memorial Day holiday, Mayor Cooper intends to prevent a new outbreak from large crowds celebrating the Fourth of July in Nashville’s Lower Broad.

Dr. Alex Jahangir, head of the Metro Coronavirus Task Force, reported that public health workers have detected at least 30 new infections of Nashville residents across 10 different bars over the past week. Media reports that several Nashville restaurants and bars have closed in the last few days because of COVID-positive staff. In an effort to further discourage large gatherings, Mayor Cooper asked the Nashville Convention and Visitors Corporation to cancel its fireworks display on Saturday evening.

The revised Metro guidance is clear. If you hold a Limited Service License, you are closed beginning July 3 through July 31. Bars can provide curbside or delivery of food and alcohol.

If you hold a Restaurant License, you can stay open at the lesser of 50% capacity or maximum occupancy with social distancing. Bar seating at restaurants is closed. Live entertainment is allowed, with a 15 foot buffer or a plexiglass or similar barrier. Pool tables, darts and other amusements are closed until July 31.

We read the order as allowing guests to be seated at tables in bar areas – just no one sitting at the bar. Guests seated at tables in bar areas must have a server. There can be no guest interaction with the bartender.

Beer bars – bars that only sell beer and not wine or spirits – must also be closed. Sorry Santa’s Pub.

A copy of the Health Director’s order is here. 

If bars reopen on August 1, closing time will be 10 pm and all patrons will be required to be seated. Bars can feature live entertainment, with a 15 foot buffer or a plexiglass or similar barrier. Pool tables, darts and other amusements are closed until July 31.

We encourage bar owners to implement policies to enforce the no standing rule and modifications to to live entertainment, which include sanitizing between performers.

It looks like closing time for restaurants will also be 10 pm, starting July 17. 

Metro Nashville originally said that bars will be closed for 14 days. With no clear definition of what constitutes a bar, many owners were left scratching their heads trying to decide if they should lay off staff and lose out on much-needed revenue over the long holiday weekend.

Many bar owners were plowing forward and planning on pushing food sales, to remain open as restaurants.  While some bars have sufficient food service to justify staying open as a restaurant, we suspect that more-nefarious owners might have been tempted to game the system. 

blog

Jun 26, 2020

We are seeing significant upticks in state responses to violations of COVID-19 safety orders.

Hours ago (June 26), Florida suspended all sales of alcohol at bars.  The state broke the news via Twitter.

Florida Gov. DeSantis’ order specifically refers to a spike in COVID “cases involving younger individuals (that) are suspected to have originated from visits to bars, pubs or nightclubs who have disregarded the restriction set forth in Phase II” of Florida’s order for reopening.

This morning, in response to a COVID spike, Texas Governor Abbott ordered all restaurants, shops, and most businesses to operate at 50 percent capacity.  Bars are closed, except to takeout.

Keep in mind that Tennessee could implement a similar sanction on bars, closing limited-service restaurants to in-person dining and drinking.

The Texas ABC is not messing around! Earlier this week, the Texas ABC summarily suspended 17 liquor permits – without a hearing – for violating COVID orders and checklists. Read the release here.

Texas drinking buddy and liquor expert Dewey Brackin observes: “In all cases I’ve seen thus far, TABC has not given verbal or written warnings at the time they are on-site. These are undercover operations. Bars and restaurants are served Emergency Suspension Orders the next day.” 

Metro Nashville

Locally, the Nashville Beer Board and Department of Health have ramped up enforcement. 

Last week, the Beer Board issued 5-day beer permit suspensions against 4 downtown bars for violating one of the Health Department’s COVID restrictions.  Read more here. 

Reliable sources tell us that over a dozen businesses were brought before the Davidson County Environmental Court for various health department citations. We hear that at least one place was issued an injunction against having patrons sit at the bar. We also understand that the Environmental Court has threatened to terminate Business Licenses for future violations.

Although we question whether the Environmental Court has jurisdiction to terminate a business license, we urge local business owners to note stepped up enforcement actions.

Stay tuned for more information.

blog

Jun 19, 2020

Good news for Nashville restaurants and bars. Starting Monday, June 22, Nashville is entering Phase 3.

Bars areas at restaurants may open at 50 percent. Bars and clubs can also reopen.

There can be no parties of more than six people. No standing at the bar is allowed.

Let the arcades open! Arcade games, pool tables, foosball, darts, laser tag and other similar activities may open. Surfaces should be cleaned between each use. Cleaning supplies should be provided for customers to use.

This is our best advice for dancing. Dance floors are to be closed. It is okay for an occasional couple to get up and dance next to their table. A group of six or more dancing together is probably too much.

If large numbers of people are dancing, the band can always dial back the fun by playing a slow song and reminding people that we are in the middle of a pandemic. 

We do not want the health department to have to completely ban all dancing. Take it easy, folks.

Restaurants must continue at 75 percent capacity. Initially, Phase 3 allowed restaurants to move to full capacity. Business owners explained to city officials that with proper social distancing, restaurants could not operate at 100 percent.

Under Phase 3, employees are to be screened daily and required to wear face masks, among other requirements. The complete Roadmap is here. 

blog

Jun 16, 2020

Folks are all abuzz about the June 18, 2020 “Emergency Meeting” of the Metro Nashville Beer Board.  The Beer Board has cited the following: 

Moxy Downtown
Kid Rock’s
Broadway Brewhouse Downtown
Nudie’s

Click for a copy of the notice of the meeting. 

Bar owners are seemingly chanting a uniform query:  How can the Beer Board do this? 

Although we enjoy zealously defending bar owners, in this case we believe the Metro Beer Board has the authority to enforce health laws.  There are a number of provisions in the Metro Code that support the issuance of a fine or suspension or revocation of a beer permit. 

Like almost every other beer board in the state, the Metro Beer Board has general enforcement authority over public health, safety and morals. 

We understand constitutional concerns. This is, after all, the United States of America. However, we see these as better suited for the courts or the ballot box; rather than beer boards.

There has been considerable chatter about the blanket ban against bar seating.  Although we concur with our buddy Barrett Hobbs that a bar can be set up to be safely socially distant, we believe the Health Department is attempting to issue guidelines that are simple to understand and clear to enforce. 

We find that businesses sometimes respond to enforcement actions with a similar refrain:  “Well, I had no idea . . .”  It is easy to understand a rule that closes seating at bars.  No explanation is needed. 

Although we can envision different rules to protect health safety, the Health Department is the ultimate arbiter of public safety and we find ourselves deferring to their judgment.

Here is our thinking concerning provisions that support the Beer Board citing restaurants and bars for health violations. 

7.08.040 – Application—Requirements and conditions. We look at these requirements as being continuing duties; not just at the time you apply.

B. To be eligible for a permit, the applicant shall establish the following: 1. That no beer will be sold except at places where such sale will not cause congestion of traffic or interference with schools, places of worship, or other places of public gathering, or otherwise interfere with public health, safety and morals;

7.08.090 B. No permit shall be issued to any person for a location which fails to comply with any health ordinances or any regulation of the department of health or which would violate any zoning ordinance of the metropolitan government.

7.08.110 – Suspension and revocation of permit—Authority.

A. The metropolitan beer permit board shall have the power to revoke or suspend, and shall be charged with the duty of revoking or suspending, any permits issued by it, upon notice to the permittee and a hearing thereon, for any violation of any provision of state law regulating the sale, storage and transportation of alcoholic beverages or for any violation of any provision of this code or any other ordinance of the metropolitan government or of any private act, county court resolution or City of Nashville ordinance which has the effect of an ordinance of the metropolitan government regulating beer or other intoxicating beverage

And last but not least:

7.08.150 – Suspension and revocation of permit—Civil penalty options.

B. Revocation, suspension or imposition of a civil penalty may be made where it appears satisfactorily that the premises of any person, firm or corporation holding a beer permit under this chapter are being operated in such manner as to be detrimental to public health, safety and morals.

blog

Jun 15, 2020

We are pleased to share the following summary about the Tennessee Business Relief Program. 

Key takeaways are:

The money does not have to be paid back
Revenue hopes to start disbursing in early July
Unlike PPP and other relief programs, there is no application.

A huge shout-out for the excellent summary to Jim Schmidt and Sharon Michie from the Tennessee’s Brewer’s Guild.

The Tennessee Business Relief Program focuses on relief for small businesses, mainly targeting the retail sector, that were closed by the Governor’s executive order in April.

There is not an application process to participate; instead the state will be using a business’ NAICS federal code to target relief to the list of certain types of businesses (i.e. gyms, restaurants, bars, etc. Full listing is on the Dept of Revenue’s website). They will also consider businesses that may not fit into a category but lost more than 25 percent of sales based on their tax filings. Only businesses with gross sales revenue under $10M will be included in the program (a company that has multiple locations will be considered as one entity). Estimates are that 70% of the eligible businesses are under $500K in annual gross sales and that demonstrates a commitment to helping smaller businesses recover.

Payments will range from $2,500- 30,000 depending on the size of sales for the business. These are not finalized but the payment schedule is likely:

Sales of Business/ Payment- $0-100k = $2,500; $100-500K = $5,000; $500K- 1M = $10,000; $1- 5M = $20,000; $5-10M =$30,000

Payments will be direct-deposited into accounts which have filed and maintain their banking information with TN Dept of Revenue. Many businesses do this already for sales and other tax filings/ payments. The Commissioner recommended checking to make sure your TNTAP account is updated. Businesses can do that at: https://tntap.tn.gov/eservices/_/
If a business is eligible and does not maintain their information online, then they will receive checks in the mail which may delay payments.
They are continuing to work toward a 1st week of July delivery of payments but that is not finalized.
If a business has questions about their eligibility, NAICS codes, or other items, it was recommended that you file a Help Desk request at the DOR website. They will work through questions and try to work with businesses who may not fit neatly in a category. You can do that here: https://www.tn.gov/revenue/tennessee-business-relief-program.html
If a business is designated solely as a manufacturer, they are not eligible for this particular program. But if the manufacturer has several aspects to its business, (i.e. for breweries or distilleries – retail, restaurant, and bar segments), then the business should be eligible as long as the DOR has that information listed as part of its NAICS codes or if it’s verified by retail sales tax records. If in doubt, they recommend contacting the Help Desk for a request.
These payments are considered grants, not loans, and are not required to be repaid. If a business is structured as a sole proprietorship, LLC or LLP, the payments should not be considered taxable; for corporations, it will depend upon their classification for federal taxes to determine if they are taxable or not.

We always advise folks to consult with the accountant on tax issues.

If you need further information, Jim and Sharon recommend reaching out to Revenue’s Taxpayer Services Division, from 8 a.m. to 4:30 p.m., Central time, at (615) 253-0600, or email revenue.support@tn.gov.

blog

May 5, 2020

Restaurants and other establishments that serve a menu of food were allowed to open in Tennessee beginning April 27. Memphis and Nashville remain closed.

We have been fielding questions about what else customers are allowed to do besides eat, including playing cornhole or ping-pong or being entertained by a live comedian.

We also have been hearing: would we have to serve food during all hours of operation?

Feed folks

Food service is a requirement for bars to be open, as we read Executive Order 30. You might close the kitchen half an hour before closing, but we strongly encourage any restaurant or bar to have a menu of food items available at all times.

Can you scale back the menu? Sure. Feel free to keep it simple and calculated to tempt patrons to indulge in a meal.

Can you use a food truck and avoid the cost of opening your kitchen? Unofficial guidance says no. If you open your restaurant or bar, you have to serve food – your food. You could supplement your food with a food truck, but why invite competition and cut into your own food sales?

Don’t entertain

As far as entertainment, Executive Order # 30 specifically prohibits the following from opening:

bars (unless serving a menu of food),
nightclubs,
live performance venues,
bowling alleys,
arcades,
concert venues,
sporting event venues,
theaters,
auditoriums,
performing arts centers,
racetracks,
indoor children’s play areas,
adult entertainment venues,
amusement parks,
senior centers and roller, and
ice skating rinks. 

In addition, Governor Lee has encouraged businesses to follow the “spirit” of the guidelines and orders. Nashville has specifically banned live music until Phase 3.

We are telling folks: don’t play games with the rules. Serving food and drink in accordance with Tennessee Pledge is fine. Other than playing the stereo and TVs, resist the temptation to allow your patrons to do anything else.

Does anyone really want another lock down?

Who is wearing out Brad Paisley’s new single?

‘Cause we’re all in this together

To me, it’s all so clear

Drinkin’ oughta be a team effort

There is no “I” in beer

blog

SHARE THIS

Tennessee extends alcohol carryout and delivery through May 29

Apr 29, 2020

Tennessee Gov. Bill Lee extended the executive order allowing drive-through, carryout and delivery of beer, wine and spirits for restaurants. Read Executive Order 30 here. 

Restaurants, limited-service restaurants and wine-only restaurants can continue to sell carryout and deliver alcoholic beverages and beer. There is no additional license or permission needed to deliver.

We urge folks to keep hustling during these difficult times and check Last Call for updates. The Tennessee ABC has posted FAQs here.

Here is our summary of the rules of engagement for to-go, curbside, drive-through and delivery:

Alcohol must be delivered with food. At least one item of food must be sold in every order containing alcohol. The amount of food required is not specified, but given the emergency nature of this order, we encourage restaurants not to play games and count lime slices as food, for example.

Licensees are still required to be responsible. Restaurants can set rules, such as one entrée per two single-serving margaritas. You can always require that customers order a meal or set a minimum dollar amount of food for deliveries.

You can deliver cocktails! As long as the package has a secure lid, we read the order as allowing delivery of margaritas, cocktails and other mixed drinks.

Alcohol must be packaged in a container or bottle with a secure lid or cap. We read this rule to mean that the container must be closed. Closed is not the same as sealed. For example, a lid screwed on the top of a plastic jug is closed. Alcohol does not have to be sealed, meaning you do not have to attach seals like you would find on commercial products at grocery stores.

The ABC advises restaurants to “cover containers in a reasonable manner that would require the consumer to unpackage them for consumption.” For example, we believe a styrofoam container with a lid that does not have a straw hole will work. If all your lids have straw holes, tape the straw holes.

Bottles and cans of beer and wine can be delivered. This includes regular-sized wine bottles. No bottles of spirits or liquor.

Single serving packages only. Although beer and wine by the bottle may be sold, no other multi-serving containers are allowed. For purposes of single servings, the ABC says no more than 16 oz. of beer, 9 oz. of wine or 4 oz. of spirits in a container with not more than 16 ounces of total liquid.

No more carafes of sangria or pitchers of margaritas to-go. You can sell multiple single-serving containers with a meal, although we continue to recommend moderation under this emergency order.

Mini bottles of spirits present a conundrum. State law prohibits the sale of spirits by the bottle. However, Governor Lee’s order specifically authorizes “single servings of alcoholic beverages.”

In our humble opinion, Executive Order 30 allows a restaurant to deliver mini bottles of spirits, provided it is clear that the mini bottle is intended for a single serving. We advise folks to securely tape or otherwise attach a mini bottle of spirits to the mixer. That way, it is abundantly clear that the two items – the container and the mini bottle – are intended to be a single serving. Do not play games and toss 12 mini bottles of tequila in a bag and consider yourself in compliance with the order.

The executive order only applies to full-service restaurants, wine-only restaurants and limited service restaurants. Hotels, caterers, premier-type tourist resorts, convention centers and other special license types cannot deliver or sell alcohol to-go under the executive order.

Get your beer here. Restaurants do not need permission from their local beer board to deliver under the Governor’s order.

If you are a brewery, hotel or other business that does not hold a restaurant license, you can register with your local beer board to deliver beer in in Bristol, Chattanooga, Knoxville, Memphis and Nashville. These local beer boards have specifically authorized carryout and delivery of regular beer. There are broader rights for beer-only delivery and growlers are fine in these cities and any other city that has specifically authorized carryout and delivery of beer. Read more about beer delivery here.

Mandatory carding for deliveries. You must card. Sales cannot be made to under 21 or intoxicated persons.

Drivers do not have to physically touch an identification to verify age. Because orders are most likely paid in advance, online or via phone, there is no need for drivers to risk potential contamination and make physical content with the customer. Have the customer hold their own ID out for the driver to read. Or better yet, read it through a glass storm window.

That said, drivers need to ensure that they properly ID. We encourage Redbox carding and closer scrutiny of all Redbox IDs.

Drivers must be at least 21 years of age and have a valid driver’s license.

Delivery services can deliver your alcohol. Restaurants can use their own employees or third-party delivery services such as Postmates and Uber Eats to deliver alcohol. Delivery personnel are not required to have server permit cards or any special qualifications.

With a third-party delivery service, you should ensure that delivery personnel are properly trained for carding. Some delivery services are not set up to require carding.

Keep in mind that if you are using a third-party delivery service, your restaurant remains liable for sales to minors, intoxicated persons or the violation of any other law.  A restaurant will not be able to avoid liability by saying “the Uber driver did it.”

Restaurants must post a sign with the following notice: “No driver shall consume any alcoholic beverage or beer or possess an open container of alcoholic beverage or beer while operating a motor vehicle in this state.” Although the order is not clear, we advise folks to post the sign on the wall, with your liquor license.

Carryout and delivery of alcohol are limited to current operating hours, which is not defined. We advise folks to adhere to the normal sales hours for beer and alcoholic beverages.

Curbside and drive-through. The order does not specifically address curbside and drive-through, but given the intent of the order, we believe it is OK to deliver drinks curbside and through drive-through windows.

Do not stage alcohol pick up outside.Restaurants cannot stage multiple alcohol deliveries at tables outside the restaurant’s licensed premises. We understand that it is convenient for multiple orders to be brought out for immediate pickup at curbside. Although this is okay for food, alcohol must stay inside the restaurant until the customer or delivery service arrives for pickup. A licensed patio is fine for staging. But not your parking lot.

Alcohol must come from the restaurant’s inventory. A restaurant cannot buy or deliver alcohol from a retail liquor store, food store or another restaurant. You must purchase your alcohol from a wholesaler.

Collect sales tax. Restaurants do not collect the 15% liquor by the drink tax for all wine and spirits sold to-go or for delivery, including bottles and cans of beer, wine and single-serve cocktails. You do have to collect sales tax. Here is the post from Revenue. (link to attached). If you have more tax questions, see our post here.

Delivery applies to restaurants statewide, but we urge folks to exercise discretion and not deliver to dry towns and counties. We suspect that the Governor did not intend for delivery to areas that have not approved of liquor-by-the-drink.

Restaurants with dining privileges can serve alcohol for on-premise consumption. Just like a regular patron dining at a table, restaurants can serve alcohol to customers that are waiting to pick up carryout, provided that the restaurant’s dining room can legally be open. Tennessee restaurants were allowed to reopen for dining beginning April 27, except for the six counties in the state within independent health departments (Chattanooga – Hamilton, Jackson – Madison, Kingsport & Bristol – Sullivan, Knoxville – Knox, Memphis – Shelby and Nashville – Davidson), which are allowed to establish their own rules for reopening. In these cities, you currently cannot pour a beer or drink while guests wait on to-go orders.

The Order expires on May 29, 2020. The Governor may extend delivery privileges, but for now, the Order expires by its own terms at midnight on May 29.