AAIAC

The Alliance of Alcohol Industry Attorneys & Consultants is a select organization of alcoholic beverage licensing and compliance professionals.

The biggest problem with Tennessee's new vertical under-21 license

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Category: underage drinking, driver's license, under-21

07.10.18

With much media fanfare, Tennessee introduced a new silver bullet for carding – a vertical driver’s license that is mandatory for anyone under the age of 21. Problem is, the vertical driver’s license does not automatically expire when the driver turns 21.

In our humble opinion, flipping the orientation of the license dodges the real problem. Too many people with under-21 driver’s licenses are old enough to drink. The question has to be asked: why have an under-21 driver’s license if it can legally be used to purchase alcohol?

The Good News

Effective July 1, 2018, every person under the age of 21 that obtains a driver’s license will be issued a vertical ID: 

Image title

A copy of a sample vertical driver’s license is attached Vertical Driver License Example.jpg.

A copy of the new law, P.C. 388, is here. vertical license act.pdf

We have to admit that the vertical driver’s license is hard to miss.  It screams at you – “I am under 21.”

We also applaud the state for continuing to include Red Box ID technology, which allows a server or bartender to instantly determine when a person turns 21 by simply reading the date in red under the photo.  We have previously extolled the virtues of Red Box ID, which requires no math. 

The Problem

Just like the previous under-21 driver’s license, the vertical ID is not required to expire when the person turns 21. In the example ID, “Nick Sample” turns 21 on February 11, 2021, but his under-21 driver’s license does not expire until July 2, 2025.

For nearly 3-and-a-half years, Nick Sample will be able to present his under 21 driver’s license and legally be served an alcoholic beverage.

Using Nick’s under-21 ID.

To drink.

How hard would it have been for the state to require that alcohol cannot be served to a person with an under-21 driver’s license, regardless of the expiration date?

This would require Nick Sample to go get a new driver’s license when he turns 21, but that becomes his choice. Nick decides whether he wants to spend eight bucks to get a new driver’s license and be able to drink. If Nick doesn’t want to drink, he can continue to use the under-21 driver’s license to drive his car.

That would be too logical.

All this flipping around of driver’s licenses brings to mind the Diana Ross hit, “Upside Down.”

Upside down

Boy, you turn me

Inside out

And round and round

We thank our Summer Associate extraordinaire James Nelson for cleverly obtaining a copy of the sample driver’s license and his assistance researching this post.

Click here to learn more about Waller's alcoholic beverage team.

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The biggest problem with Tennessee's new vertical under-21 license

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The biggest problem with Tennessee's new vertical under-21 license

Jul 10, 2018

With much media fanfare, Tennessee introduced a new silver bullet for carding – a vertical driver’s license that is mandatory for anyone under the age of 21. Problem is, the vertical driver’s license does not automatically expire when the driver turns 21.

In our humble opinion, flipping the orientation of the license dodges the real problem. Too many people with under-21 driver’s licenses are old enough to drink. The question has to be asked: why have an under-21 driver’s license if it can legally be used to purchase alcohol?

The Good News

Effective July 1, 2018, every person under the age of 21 that obtains a driver’s license will be issued a vertical ID: 

Image title

A copy of a sample vertical driver’s license is attached Vertical Driver License Example.jpg.

A copy of the new law, P.C. 388, is here. vertical license act.pdf

We have to admit that the vertical driver’s license is hard to miss.  It screams at you – “I am under 21.”

We also applaud the state for continuing to include Red Box ID technology, which allows a server or bartender to instantly determine when a person turns 21 by simply reading the date in red under the photo.  We have previously extolled the virtues of Red Box ID, which requires no math. 

The Problem

Just like the previous under-21 driver’s license, the vertical ID is not required to expire when the person turns 21. In the example ID, “Nick Sample” turns 21 on February 11, 2021, but his under-21 driver’s license does not expire until July 2, 2025.

For nearly 3-and-a-half years, Nick Sample will be able to present his under 21 driver’s license and legally be served an alcoholic beverage.

Using Nick’s under-21 ID.

To drink.

How hard would it have been for the state to require that alcohol cannot be served to a person with an under-21 driver’s license, regardless of the expiration date?

This would require Nick Sample to go get a new driver’s license when he turns 21, but that becomes his choice. Nick decides whether he wants to spend eight bucks to get a new driver’s license and be able to drink. If Nick doesn’t want to drink, he can continue to use the under-21 driver’s license to drive his car.

That would be too logical.

All this flipping around of driver’s licenses brings to mind the Diana Ross hit, “Upside Down.”

Upside down

Boy, you turn me

Inside out

And round and round

We thank our Summer Associate extraordinaire James Nelson for cleverly obtaining a copy of the sample driver’s license and his assistance researching this post.

Click here to learn more about Waller's alcoholic beverage team.

Continue reading
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Can I buy alcohol on July 4 in Tennessee?

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Category: beer, wine, wine in grocery stores

06.29.18

Can I buy beer, wine and spirits on Memorial Day, July 4 and Labor Day?

Summer is upon us and we hear that burning question: Can I buy alcohol on holidays at Tennessee liquor and grocery stores? Yes and no.

Here are the facts. The law recently changed to allow liquor and grocery stores to sell beer, wine and spirits on many federal holidays, including:

New Year’s Day Memorial Day July 4 Labor Day

No more stocking up on Friday and Saturday before a big summer holiday weekend, like this upcoming Memorial Day. You can buy your wine and spirits on both Sunday and Monday.

Alcohol still cannot be sold on Easter, Thanksgiving and Christmas. You are supposed to be at church or at home with family, not boozing it up.

To make things more confusing, grocery stores cannot sell wine on Sundays until next year, beginning January 6, 2019.

Holiday hours for wine at liquor and grocery stores are 8 am until 11 pm, except Sundays, when stores cannot open until 10 am. Keep in mind that hours for beer sales vary from city to city, with many selling beer starting at 6 am.

Surf’s up and Madonna’s smash summer song “Holiday” from 1983 comes to mind:

Everybody spread the word

We're gonna have a celebration

All across the world

In every nation


Click here to learn more about Waller's alcoholic beverage team.

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Can I Sell Sake in My Grocery Store in Tennessee?

Can I bring my own wine into a restaurant in Tennessee?

Tennessee Sunday alcohol sales: What you need to know

New Tennessee open carry law is gamechanger for many restaurants, hotels

Restaurants and hotels get the green light to give away alcohol

Original author: William T. Cheek III
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Can I buy alcohol on Labor Day in Tennessee?

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Category: beer, wine, wine in grocery stores

06.29.18

Can I buy beer, wine and spirits on Memorial Day, July 4 and Labor Day?

Fall is upon us and we hear that burning question: Can I buy alcohol on holidays at Tennessee liquor and grocery stores? Yes and no.

Here are the facts. The law recently changed to allow liquor and grocery stores to sell beer, wine and spirits on many federal holidays, including:

New Year’s Day Memorial Day July 4 Labor Day

No more stocking up on Friday and Saturday before a big holiday weekend. You can buy your wine and spirits on both Sunday and Monday.

Alcohol still cannot be sold on Easter, Thanksgiving and Christmas. You are supposed to be at church or at home with family, not boozing it up.

To make things more confusing, grocery stores cannot sell wine on Sundays until next year, beginning January 6, 2019.

Holiday hours for wine at liquor and grocery stores are 8 a.m. until 11 p.m., except Sundays, when stores cannot open until 10 a.m. Keep in mind that hours for beer sales vary from city to city, with many selling beer starting at 6 a.m.

Surf’s up and Madonna’s smash summer song “Holiday” from 1983 comes to mind:

Everybody spread the word

We're gonna have a celebration

All across the world

In every nation


Click here to learn more about Waller's alcoholic beverage team.

Subscribe Now!

Can I Sell Sake in My Grocery Store in Tennessee?

Can I bring my own wine into a restaurant in Tennessee?

Tennessee Sunday alcohol sales: What you need to know

New Tennessee open carry law is gamechanger for many restaurants, hotels

Restaurants and hotels get the green light to give away alcohol

Original author: William T. Cheek III
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Can I buy alcohol on Christmas in Tennessee?

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Category: beer, wine, wine in grocery stores

06.29.18

It’s that time of year again when Santa spreads Christmas cheer and relatives pay a visit.  No better time than to stock up on booze.

Tennessee state law makes planning for holiday season particularly important.  Your friendly neighborhood grocery and liquor store will be closed on Christmas Day and New Year’s Day.

You better stock up on Christmas Eve and New Year’s Eve, when you can legally purchase beer wine and spirits in Tennessee.

Who knew Cheap Trick had a Christmas song?

Enjoy the holidays and bring in the new year with a little boozy cheer.

Surf’s up and Madonna’s smash summer song “Holiday” from 1983 comes to mind:

Click here to learn more about Waller's alcoholic beverage team.

Subscribe Now!

Can I Sell Sake in My Grocery Store in Tennessee?

Can I bring my own wine into a restaurant in Tennessee?

Tennessee Sunday alcohol sales: What you need to know

New Tennessee open carry law is gamechanger for many restaurants, hotels

Restaurants and hotels get the green light to give away alcohol

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Can I buy alcohol on Thanksgiving in Tennessee?

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Can I buy alcohol on Thanksgiving in Tennessee?

Jun 29, 2018

It’s that time of year again when relatives arrive en masse for a few days of turkey, football and conversation. No better time than to stock up on booze.

Tennessee state law makes planning for holiday season particularly important.  In 2019, your friendly neighborhood grocery and liquor store will be closed on Thanksgiving. It's one of several holidays each year in which wine and alcohol sales are prohibited, including Christmas and New Year's Day.

Otherwise, you'd better stock up on Wednesday night before 11 p.m., the legal cutoff for wine and alcohol sales in Tennessee.

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Hospitality Law Update 2018, Vol. I

Hospitality Law Update - 2018 - Vol.-I Hospitality Law Update - 2018 - Vol.-I

With the 2018 regular legislative session underway in Kentucky, there is certainly the potential for hospitality law to experience significant change as it has for the last several years. HB 136 is one of the pending bills that could have the biggest impact for at least one segment of the hospitality industry; It would relieve some administrative burden on the still rapidly expanding microbrewery industry. The biggest potential change, however, comes from a new proposed regulation by the Department of Alcoholic Beverage Control (“ABC”), 804 KAR 9:051, to repeal the regulations regarding quota retail licenses. The effort to repeal the quota licenses now has the interest of legislators, and that will likely see discussion in the General Assembly.

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Restaurants and hotels get the green light to give away alcohol

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Category: free samples, wine, beer, restaurants, hotels

06.13.18

Generations of restauranteurs and hoteliers have been told they cannot give away liquor. Since liquor by the drink was originally adopted in Tennessee in the late 1960s, it has been illegal to give away wine or spirits at any restaurant, hotel, entertainment venue or other on-premise outlet.

No more.

P.C. 755 allows any liquor by the drink establishment to serve a complimentary sample of wine.  TCA § 57-4-203(3)(2)(B) now provides that patrons can be given up to a one-ounce sample of wine.

The law is not clear about giving away more than one sample. The idea, as we see it, is you can pour a taste of wine to a customer, to see if he or she likes it. Can a customer preview more than one wine?  We do not believe that the law is intended to allow a customer to knock back a flight of 4 different wines, effectively allowing four ounces of wine to be given away.  Nor do we think it is legal to pour 4 one ounce “samples” of the same wine. 

As of this post, we have not heard of the ABC taking a position on the new law.

Keep in mind that you can give away beer until the cows come home. The law allows you to serve free beer. You cannot give away samples of spirits.

Subsection (A) of the new law also allows a hotel to provide up to four 750 milliliter or smaller complimentary sealed packages of wine or spirits. Please note that this provision is specifically available only to hotels. No other liquor by the drink licensee may give away bottles of wine or spirits.

The full text of P.C. 755 is available at this link.

Chili Peppers, the Red Hot kind, come to mind:

I'm a low brow but I rock a little know how
No time for the piggies or the hoosegow
Get smart get down with the pow wow
Never been a better time than right now
Give it away give it away give it away now

<iframe width="560" height="315" src="https://www.youtube.com/embed/Mr_uHJPUlO8" frameborder="0" allow="autoplay; encrypted-media" allowfullscreen></iframe>

Photo By Narek75 - Own work, CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=46403502

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Can I Sell Sake in My Grocery Store in Tennessee?

Can I bring my own wine into a restaurant in Tennessee?

Tennessee Sunday alcohol sales: What you need to know

New Tennessee open carry law is gamechanger for many restaurants, hotels

Can I buy alcohol on holidays in Tennessee?

Original author: William T. Cheek III
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Restaurants and hotels get the green light to give away alcohol

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Category: free samples, wine, beer, restaurants, hotels

06.13.18

Generations of restauranteurs and hoteliers have been told they cannot give away liquor. Since liquor by the drink was originally adopted in Tennessee in the late 1960s, it has been illegal to give away wine or spirits at any restaurant, hotel, entertainment venue or other on-premise outlet.

No more.

P.C. 755 allows any liquor by the drink establishment to serve a complimentary sample of wine.  TCA § 57-4-203(3)(2)(B) now provides that patrons can be given up to a one-ounce sample of wine.

The law is not clear about giving away more than one sample. The idea, as we see it, is you can pour a taste of wine to a customer, to see if he or she likes it. Can a customer preview more than one wine?  We do not believe that the law is intended to allow a customer to knock back a flight of 4 different wines, effectively allowing four ounces of wine to be given away.  Nor do we think it is legal to pour 4 one ounce “samples” of the same wine. 

As of this post, we have not heard of the ABC taking a position on the new law.

Keep in mind that you can give away beer until the cows come home. The law allows you to serve free beer. You cannot give away samples of spirits.

Subsection (A) of the new law also allows a hotel to provide up to four 750 milliliter or smaller complimentary sealed packages of wine or spirits. Please note that this provision is specifically available only to hotels. No other liquor by the drink licensee may give away bottles of wine or spirits.

The full text of P.C. 755 is available at this link.

Chili Peppers, the Red Hot kind, come to mind:

I'm a low brow but I rock a little know how
No time for the piggies or the hoosegow
Get smart get down with the pow wow
Never been a better time than right now
Give it away give it away give it away now

<iframe width="560" height="315" src="https://www.youtube.com/embed/Mr_uHJPUlO8" frameborder="0" allow="autoplay; encrypted-media" allowfullscreen></iframe>

Photo By Narek75 - Own work, CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=46403502

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Can I Sell Sake in My Grocery Store in Tennessee?

Can I bring my own wine into a restaurant in Tennessee?

Tennessee Sunday alcohol sales: What you need to know

New Tennessee open carry law is gamechanger for many restaurants, hotels

Can I buy alcohol on Christmas in Tennessee?

Continue reading
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Restaurants and hotels get the green light to give away alcohol

blog

Restaurants and hotels get the green light to give away alcohol

Jun 13, 2018

Generations of restauranteurs and hoteliers have been told they cannot give away liquor. Since liquor by the drink was originally adopted in Tennessee in the late 1960s, it has been illegal to give away wine or spirits at any restaurant, hotel, entertainment venue or other on-premise outlet.

No more.

P.C. 755 allows any liquor by the drink establishment to serve a complimentary sample of wine.  TCA § 57-4-203(3)(2)(B) now provides that patrons can be given up to a one-ounce sample of wine.

The law is not clear about giving away more than one sample. The idea, as we see it, is you can pour a taste of wine to a customer, to see if he or she likes it. Can a customer preview more than one wine?  We do not believe that the law is intended to allow a customer to knock back a flight of 4 different wines, effectively allowing four ounces of wine to be given away.  Nor do we think it is legal to pour 4 one ounce “samples” of the same wine. 

As of this post, we have not heard of the ABC taking a position on the new law.

Keep in mind that you can give away beer until the cows come home. The law allows you to serve free beer. You cannot give away samples of spirits.

Subsection (A) of the new law also allows a hotel to provide up to four 750 milliliter or smaller complimentary sealed packages of wine or spirits. Please note that this provision is specifically available only to hotels. No other liquor by the drink licensee may give away bottles of wine or spirits.

The full text of P.C. 755 is available at this link.

Chili Peppers, the Red Hot kind, come to mind:

I'm a low brow but I rock a little know how
No time for the piggies or the hoosegow
Get smart get down with the pow wow
Never been a better time than right now
Give it away give it away give it away now

<iframe width="560" height="315" src="https://www.youtube.com/embed/Mr_uHJPUlO8" frameborder="0" allow="autoplay; encrypted-media" allowfullscreen></iframe>

Photo By Narek75 - Own work, CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=46403502

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Can I buy alcohol on holidays in Tennessee?

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Category: beer, wine, wine in grocery stores

05.26.18

Can I buy beer, wine and spirits on Memorial Day, July 4 and Labor Day?

Summer is upon us and we hear that burning question: Can I buy alcohol on holidays at Tennessee liquor stores?  Yes and no.

Here’s the facts.  The law recently changed to allow liquor stores to sell beer, wine and spirits on Sundays and many federal holidays, including:

New Year’s Day Memorial Day July 4 Labor Day

No more stocking up on Friday and Saturday before a big summer holiday weekend, like this upcoming Memorial Day.  You can buy your wine and spirits on both Sunday and Monday.

Same rules apply to wine at grocery stores.

Alcohol still cannot be sold on Easter, Thanksgiving and Christmas.  You are supposed to be at church or home with family, not boozing it up.

Surf’s up and Madonna’s smash summer song “Holiday” from 1983 comes to mind:

Everybody spread the word

We're gonna have a celebration

All across the world

In every nation

Subscribe Now!

Can I Sell Sake in My Grocery Store in Tennessee?

Can I bring my own wine into a restaurant in Tennessee?

Tennessee Sunday alcohol sales: What you need to know

New Tennessee open carry law is gamechanger for many restaurants, hotels

Restaurants and hotels get the green light to give away alcohol

Original author: William T. Cheek III
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Duncan Liquor Law Newsletter - May 2018

Duncan Liquor Law Letter Part Two - May 2018

Duncan Liquor Law Letter Index - May 2018

Read Duncan Liquor Law Letter

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New Tennessee open carry law is gamechanger for many restaurants, hotels

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Category: beer

05.18.18

Among the many liquor laws passed this legislative session by the Tennessee General Assembly, one of the biggest changes, in our humble opinion, is the new Open Carry law.  P.C. 755 allows restaurants, hotels and other liquor-by-the-drink establishments to serve alcohol into common areas and allow adjacent restaurant patrons to bring alcoholic beverages into their restaurant.  You can now walk between restaurants with your cocktail, glass of wine or mug of suds. 

READ:  P.C. 755 Open Carry Legislation in Tennessee

How does it work?  First, the restaurants must be "contiguous," our fancy lawyerly term for connected.  For example, a common outdoor patio or interior dining space may connect two restaurants, making them “contiguous.” 

In order to take advantage of the new open carry law, the ABC advises that establishments must first file an application to expand the licensed premises to include the adjacent restaurant.  If additional space, such as a common patio or courtyard are added in order to connect the two restaurants, the application must also include the new common space.  Applications must be accompanied by a $300 filing fee and permission to use any additional space. 

The law requires that restaurants use branded cups, so ABC agents can determine where folks purchased their alcoholic beverages.  We see this as primarily a means to track sales to minors and intoxicated persons. 

The open carry law does not work if there is any sort of gap between the two restaurants, such as a public street.  The restaurants must be connected in order to enjoy the open carry privileges. 

We see the new law working especially well for multiple restaurants that share a common space, such as a food court in a mall or several restaurants that connect to a common patio. 

Normal rules about fencing patios to prevent guests from leaving with an alcoholic beverage still apply.  Restaurants will also be responsible to ensure that patrons do not leave common spaces with an alcoholic beverage.

The new law specifically includes beer.  We suspect that most beer boards will want some sort of notice or new application before allowing beer to be carried between two establishments.  In addition to applying with the ABC, we encourage restaurants to seek approval from their local beer board. 

All this walking around with a beer makes us think of a line from our favorite Hank Williams, Jr. tune, There’s a Tear in My Beer:

"I’m gonna keep drinkin’

Till I can’t move a toe

And then maybe, my heart won’t hurt me so."

P.C. 755 also contains a provision that could be interpreted as allowing restaurants to expand into additional areas, such as parking lots or adjacent fields. We believe the language does not create any new rights for restaurants to expand. It merely states an unwritten policy that has been in effect for years. A restaurant can have an exterior patio, provided it is properly fenced, for example.

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Can I Sell Sake in My Grocery Store in Tennessee?

Can I buy alcohol on holidays in Tennessee?

Restaurants and hotels get the green light to give away alcohol

Original author: William T. Cheek III
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New Tennessee open carry law is gamechanger for many restaurants, hotels

blog

New Tennessee open carry law is gamechanger for many restaurants, hotels

May 18, 2018

Among the many liquor laws passed this legislative session by the Tennessee General Assembly, one of the biggest changes, in our humble opinion, is the new Open Carry law.  P.C. 755 allows restaurants, hotels and other liquor-by-the-drink establishments to serve alcohol into common areas and allow adjacent restaurant patrons to bring alcoholic beverages into their restaurant.  You can now walk between restaurants with your cocktail, glass of wine or mug of suds. 

READ:  P.C. 755 Open Carry Legislation in Tennessee

How does it work?  First, the restaurants must be "contiguous," our fancy lawyerly term for connected.  For example, a common outdoor patio or interior dining space may connect two restaurants, making them “contiguous.” 

In order to take advantage of the new open carry law, the ABC advises that establishments must first file an application to expand the licensed premises to include the adjacent restaurant.  If additional space, such as a common patio or courtyard are added in order to connect the two restaurants, the application must also include the new common space.  Applications must be accompanied by a $300 filing fee and permission to use any additional space. 

The law requires that restaurants use branded cups, so ABC agents can determine where folks purchased their alcoholic beverages.  We see this as primarily a means to track sales to minors and intoxicated persons. 

The open carry law does not work if there is any sort of gap between the two restaurants, such as a public street.  The restaurants must be connected in order to enjoy the open carry privileges. 

We see the new law working especially well for multiple restaurants that share a common space, such as a food court in a mall or several restaurants that connect to a common patio. 

Normal rules about fencing patios to prevent guests from leaving with an alcoholic beverage still apply.  Restaurants will also be responsible to ensure that patrons do not leave common spaces with an alcoholic beverage.

The new law specifically includes beer.  We suspect that most beer boards will want some sort of notice or new application before allowing beer to be carried between two establishments.  In addition to applying with the ABC, we encourage restaurants to seek approval from their local beer board. 

All this walking around with a beer makes us think of a line from our favorite Hank Williams, Jr. tune, There’s a Tear in My Beer:

"I’m gonna keep drinkin’

Till I can’t move a toe

And then maybe, my heart won’t hurt me so."

P.C. 755 also contains a provision that could be interpreted as allowing restaurants to expand into additional areas, such as parking lots or adjacent fields. We believe the language does not create any new rights for restaurants to expand. It merely states an unwritten policy that has been in effect for years. A restaurant can have an exterior patio, provided it is properly fenced, for example.

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Direct Shipping Allows Visitors to Send Home the Kentucky Bourbon Experience

Direct Shipping Allows Visitors to send home Kentucky Bourbon Experience

It's been an exciting week for Kentucky's distillers with the passage of HB 400, legislation that allows distillery visitors to purchase alcohol and have it shipped to their homes. Visitors can also participate in "club" programs in which the distillery may ship products to users in regular intervals.

Today, The Bourbon Review features an update from McBrayer Member Stephen G. Amato on HB 400 and the passage of quota deregulation measure SB 110 under their section "Bourbon without Borders." Read it here.

Commentary provided by 

Stephen G. Amato focuses his practice in the areas of hospitality law, civil litigation, employment law, and administrative law, and is located in the firm's Lexington office. He can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it. or (859) 231-8780, ext. 104.

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Tennessee Sunday alcohol sales: What you need to know

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Category: retail sales, wine in grocery stores, liquor stores

04.11.18

It appears we are just days away from the Sunday sale of wine and liquor in stores across Tennessee.

With everyone eagerly inquiring, “When can I buy wine on Sunday?," folks aren't really talking about the new restrictions imposed on retail stores.  We will break down the details for you.

Retail liquor stores can now start selling wine on Sundays at 10 a.m. The first day of sales begins on Sunday, April 22. 

However, grocery stores cannot start selling wine until 10 a.m. on January 6, 2019.  The legislation gives a decided advantage to retail liquor stores by giving liquor stores a head start on Sunday sales.

In addition to Sunday sales of wine, retail liquor stores will be able to sell spirits, beer and any other item allowed to be sold by a retail liquor store.  On Sundays.  

Sunday sales brings to mind Joan Osborne’s classic One of Us:

What if God was one of us?

Just a slob like one of us

Just a stranger on the bus

Tryin’ to make his way home?

The scriptures tell us that God can make wine out of water, so we know at least one person — or deity in this case — that was not waiting for the new law to pass to buy wine on Sunday.

We see Sunday sales of spirits and the ability to immediately sell wine on Sundays as part of the compromise offered by grocery stores for selling wine on Sundays.  Folks that followed the initial passage of the wine in grocery store law, which we affectionately call WIGS, remember that the final bill was an ugly compromise, where all parties sacrificed.

Holiday Sales

The legislation also changes days when wine and spirits cannot be sold at liquor stores and eliminates holidays for grocery stores. Prohibiting sales on holidays has been particularly confusing to consumers and grocers. The bill ends the confusion by allowing wine to be sold by grocery stores on every holiday, including Christmas. Three years ago when WIGS passed, who would have imagined Tennesseans Krogering for wine on Christmas Day, 2018.

You can now buy beer, wine and spirits on Labor Day, New Year’s Day and the Fourth of July at your favorite liquor store. You still cannot buy beer, wine or spirits at liquor stores on Thanksgiving and Christmas. The legislation adds Easter to the list of holidays when liquor stores must be closed.

Minimum Markup on Spirits

The Sunday sales legislation also introduces a 10 percent minimum markup on the price of spirits.  With the exception of the amount, the minimum markup on spirits mirrors the existing WIGS law imposing a 20 percent minimum markup on wine, including the amounts of fines, criminal penalties and injunctive relief.

We see the minimum markup on spirits as laying the foundation for legalizing the sale of spirits in grocery stores, too.  Imposing a minimum markup was critical to the original WIGS deal.

Moratorium on New Liquor Stores

The Sunday sales compromise also imposes a moratorium on issuance of new licenses to retail liquor stores.  There is an exception that allows new licenses to be issued for jurisdictions that approve of retail liquor stores by local option, or for any applicant with a pending application as of April 20, 2018.

The legislation sets up a process for transferring existing licenses.  We wonder if imposing a moratorium on new licenses and setting up a process for transferring licenses will create value in a retail liquor license.  In many states, limiting the number of licenses creates a market for purchasing liquor licenses.  Licenses are worth hundreds of thousands of dollars, or more, depending on the limitations and demands for licenses in a particular city or state.

Industry members generally agree that WIGS significantly reduced the value of retail liquor stores.  Many owners have seen a dramatic drop in the valuation of their businesses.  Given the decrease in valuation, will the moratorium on new licenses create any additional value in existing licenses?

The moratorium on new licenses and the transfer process expires on January 1, 2021.  At that time, new licenses can be issued and the ordinary transfer process kicks back in.

Inventory Liquidation

The legislation also provides some relief to retail liquor stores that close their doors.  Under current law, a retail liquor store can only sell its inventory back to wholesalers.  Wholesalers are required to repurchase “saleable” inventory and can impose restocking fees.  In practice, retail liquor store owners that close can be forced to accept devastating losses, particularly since wine inventory is often deemed not saleable by wholesalers.

The new law allows a closing store to hold a 30-day going out of business sale.  The store can price inventory as low as 10 percent below wholesale cost.  The law specifically authorizes a licensee to keep any product that is not sold, for personal consumption.  This has been the practice for years, although it has not been specifically authorized by any law.

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Original author: William T. Cheek III
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Tennessee Sunday alcohol sales: What you need to know

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Tennessee Sunday alcohol sales: What you need to know

Apr 11, 2018

The Sunday sale of wine and liquor is now legal in stores across Tennessee.

With this new law, however, there are some new restrictions imposed on retail stores.  We will break down the details for you.

Beginning April 22, retail liquor stores are allowed to start selling wine on Sundays at 10 a.m. 

However, grocery stores cannot start selling wine until 10 a.m. on January 6, 2019.  The legislation gives a decided advantage to retail liquor stores by giving liquor stores a head start on Sunday sales.

In addition to Sunday sales of wine, retail liquor stores will be able to sell spirits, beer and any other item allowed to be sold by a retail liquor store.  On Sundays.  

Sunday sales brings to mind Joan Osborne’s classic One of Us:

What if God was one of us?

Just a slob like one of us

Just a stranger on the bus

Tryin’ to make his way home?

The scriptures tell us that God can make wine out of water, so we know at least one person — or deity in this case — that was not waiting for the new law to pass to buy wine on Sunday.

We see Sunday sales of spirits and the ability to immediately sell wine on Sundays as part of the compromise offered by grocery stores for selling wine on Sundays.  Folks that followed the initial passage of the wine in grocery store law, which we affectionately call WIGS, remember that the final bill was an ugly compromise, where all parties sacrificed.

Holiday Sales

The legislation also changes days when wine and spirits cannot be sold at liquor stores and eliminates holidays for grocery stores. Prohibiting sales on holidays has been particularly confusing to consumers and grocers. The bill ends the confusion by allowing wine to be sold by grocery stores on every holiday, including Christmas. Three years ago when WIGS passed, who would have imagined Tennesseans Krogering for wine on Christmas Day, 2018.

You can now buy beer, wine and spirits on Labor Day, New Year’s Day and the Fourth of July at your favorite liquor store. You still cannot buy beer, wine or spirits at liquor stores on Thanksgiving and Christmas. The legislation adds Easter to the list of holidays when liquor stores must be closed.

Since we posted this story, the legislature was apparently shocked that it authorized the sale of wine on Easter, Thanksgiving and Christmas at grocery stores. A second law prohibits holiday sales at both liquor and grocery stores on Easter, Thanksgiving and Christmas.

Minimum Markup on Spirits

The Sunday sales legislation also introduces a 10 percent minimum markup on the price of spirits.  With the exception of the amount, the minimum markup on spirits mirrors the existing WIGS law imposing a 20 percent minimum markup on wine, including the amounts of fines, criminal penalties and injunctive relief.

We see the minimum markup on spirits as laying the foundation for legalizing the sale of spirits in grocery stores, too.  Imposing a minimum markup was critical to the original WIGS deal.

Moratorium on New Liquor Stores

The Sunday sales compromise also imposes a moratorium on the issuance of new licenses to retail liquor stores.  There is an exception that allows new licenses to be issued for jurisdictions that approve of retail liquor stores by local option, or for any applicant with a pending application as of April 20, 2018.

The legislation sets up a process for transferring existing licenses.  We wonder if imposing a moratorium on new licenses and setting up a process for transferring licenses will create value in a retail liquor license.  In many states, limiting the number of licenses creates a market for purchasing liquor licenses.  Licenses are worth hundreds of thousands of dollars, or more, depending on the limitations and demands for licenses in a particular city or state.

The bill also imposes a distance restriction for transferring an existing license to a new location. You cannot open a new liquor store or move an existing store within 1,500 feet of an existing liquor store.

Industry members generally agree that WIGS significantly reduced the value of retail liquor stores.  Many owners have seen a dramatic drop in the valuation of their businesses.  Given the decrease in valuation, will the moratorium on new licenses create any additional value in existing licenses?

The moratorium on new licenses and the transfer process expires on January 1, 2021.  At that time, new licenses can be issued and the ordinary transfer process kicks back in.

Inventory Liquidation

The legislation also provides some relief to retail liquor stores that close their doors.  Under current law, a retail liquor store can only sell its inventory back to wholesalers.  Wholesalers are required to repurchase “saleable” inventory and can impose restocking fees.  In practice, retail liquor store owners that close can be forced to accept devastating losses, particularly since wine inventory is often deemed not saleable by wholesalers.

The new law allows a closing store to hold a 30-day going out of business sale.  The store can price inventory as low as 10 percent below wholesale cost.  The law specifically authorizes a licensee to keep any product that is not sold, for personal consumption.  This has been the practice for years, although it has not been specifically authorized by any law.

BACKGROUND: P.C. PC 783 Sunday Holiday Sales Legislation.pdf


Click here to learn more about Waller's alcoholic beverage team.

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Duncan Liquor Law Newsletter - April 2018

Duncan Liqour Law Newsletter - April 2018

Duncan Liqour Law Newsletter - April 2018

Read Duncal Liquor Law Letter

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The tax man cometh — and he's thirsty

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Category: Tennessee Department of Revenue, drink prices, drink menu, Alcoholic Beverage Regulations

03.30.18

Lots of folks have been asking of late, “Do I have to show taxes in drink prices?”

The Tennessee Department of Revenue recently clarified that including taxes in drink prices is optional.  Previously, the state required that menu prices include both liquor by the drink and sales taxes.

The law now gives taxpayers the option to include taxes on the final bill to the customer, instead of in the sales price listed in menus.

A copy of the notice from Revenue is included here. LBD Tax Notice.pdf

Please keep in mind that price schedules should still contain all taxes, including both liquor by the drink and sales taxes. 

If menu prices do not include taxes, Revenue advises that the menu must state that the “15% LBD tax and sales taxes will be included on the final bill.”

See our blog post concerning price schedules here.

The notice clears up a long-standing dispute we have had with Revenue over taxes.  We have always thought that Revenue lacks statutory authority to require that taxes be included in drink prices on menus. 

There is this pesky American thing about free speech.  We love Metallica’s satirical take on freedom in Eye of the Beholder:

Independence limited

Freedom of choice

Choice is made for you, my friend

Freedom of speech

Speech is words that they will bend

Freedom no longer frees you

Doesn’t matter what you see

Or into it what you read

You can do it your own way

If it’s done just how I say

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Original author: William T. Cheek III
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The tax man cometh -- and he's thirsty

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The tax man cometh -- and he's thirsty

Mar 30, 2018

Lots of folks have been asking of late, “Do I have to show taxes in drink prices?”

The Tennessee Department of Revenue recently clarified that including taxes in drink prices is optional.  Previously, the state required that menu prices include both liquor by the drink and sales taxes.

The law now gives taxpayers the option to include taxes on the final bill to the customer, instead of in the sales price listed in menus.

A copy of the notice from Revenue is included here.

Restaurants, hotels and other on-premise establishments can decide whether or not the 15 percent liquor-by-the-drink tax is included in the menu price. The LBD tax may be applied with sales taxes on the receipt. However, if LBD tax is not included in the menu price, there must be a statement on menus that the 15 percent LBD tax is added to the final bill.

For clarity, we agree with Revenue and recommend that the tax statement reference both 15 percent LBD and sales taxes. For example, menus could indicate:

“Menu prices for alcoholic beverages do not include 15 percent liquor by the drink tax and sales tax. Taxes will be added to your final bill.”

As if the topic is not complicated enough, the 15 percent LBD tax does not apply to beer. The law does not have posting requirements for beer, and there is no requirement that an explanation be offered on menus for beer taxes, which are limited to sales tax.

Please keep in mind that price schedules should still contain all taxes, including both liquor by the drink and sales taxes. 

See our blog post concerning price schedules here.

The notice clears up a long-standing dispute we have had with Revenue over taxes.  We have always thought that Revenue lacks statutory authority to require that taxes be included in drink prices on menus. 

There is this pesky American thing about free speech.  We love Metallica’s satirical take on freedom in Eye of the Beholder:

Independence limited

Freedom of choice

Choice is made for you, my friend

Freedom of speech

Speech is words that they will bend

Freedom no longer frees you

Doesn’t matter what you see

Or into it what you read

You can do it your own way

If it’s done just how I say

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