AAIAC

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

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.

Continue reading
  30 Hits
  0 Comments
Tags:
30 Hits
0 Comments

Restaurants and hotels get the green light to give away alcohol

Back

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

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

Can I buy alcohol on holidays in Tennessee?

Original author: William T. Cheek III
Continue reading
  26 Hits
  0 Comments
Tags:
26 Hits
0 Comments

Can I buy alcohol on holidays in Tennessee?

Back

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
Continue reading
  23 Hits
  0 Comments
Tags:
23 Hits
0 Comments

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

Continue reading
  54 Hits
  0 Comments
Tags:
54 Hits
0 Comments

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

Back

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.

Subscribe Now!

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
Continue reading
  9 Hits
  0 Comments
Tags:
9 Hits
0 Comments

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.

Continue reading
  111 Hits
  0 Comments
111 Hits
0 Comments

Tennessee Sunday alcohol sales: What you need to know

Back

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.

Subscribe Now!

Can I Sell Sake in My Grocery Store in Tennessee?

Dead again: Court strikes down Tennessee residency requirement for liquor store owners

Trump's travel ban, cake bakers and gerrymandering make for a busy Supreme Court session

Can I buy alcohol on holidays in Tennessee?

Original author: William T. Cheek III
Continue reading
  6 Hits
  0 Comments
Tags:
6 Hits
0 Comments

Duncan Liquor Law Newsletter - April 2018

Duncan Liqour Law Newsletter - April 2018

Duncan Liqour Law Newsletter - April 2018

Read Duncal Liquor Law Letter

Continue reading
  109 Hits
  0 Comments
109 Hits
0 Comments

The tax man cometh — and he's thirsty

Back

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

Subscribe Now!

How Whisky Distillers use Peat Bogs to Create Unforgettable Flavors

The Lincoln County Process and the Law

When and How to get a COLA Waiver

Alcoholic Beverages and FDA Jurisdiction

Sin Taxes on Alcohol and the Revenue Generated

Original author: William T. Cheek III
Continue reading
  6 Hits
  0 Comments
Tags:
6 Hits
0 Comments

Gov. Haslam taps newest ABC Commissioner

Back

Category: abc, Alcoholic Beverage Commission, Tennessee Alcoholic Beverage Commission, Ashleigh Harb Roberts

03.23.18

This week's Tennessee Alcoholic Beverage Commission meeting featured a new face up front. 

Ashleigh Harb Roberts is the new Commissioner for the Middle District of Tennessee.  Commissioner Roberts replaces Commissioner Kaegi, who resigned in December 2017 and we blogged about on Last Call

Commissioner Roberts joins Commission Chair Richard Skiles, who we blogged about here and long-term Commissioner John Jones, East Tennessee Commission Member.  The Commissioners are appointed by the Governor and meet on a monthly basis to conduct ABC business.

Commissioner Roberts is a lawyer, having served as deputy legal counsel to Gov. Haslam.  She is a Vanderbilt Law grad, a self-described fan of red wine and a mother to five young children, including quadruplets.  Married to Gabe Roberts, chief legal officer of the Tennessee Division of Finance and Administration’s Bureau of TennCare, both were recognized as members of the 40 Under 40 class in 2016 by the Nashville Business Journal.

Reminds us of Beyoncé’s Run the World:

Girls we run this motha, girls

Who run the world?

Girls

This goes out to all my girls

That's in the club rocking the latest

Who will buy it for themselves

And get more money later

In other ABC news, the next two ABC Meetings were set:

            Thursday, April 26 at 11 a.m.

            Thursday, May 24 at 11 a.m.

Subscribe Now!

Tennessee Alcoholic Beverage chairman Bryan Kaegi resigns

Tennessee ABC puts the smack down on Jell-O shots

Dead again: Court strikes down Tennessee residency requirement for liquor store owners

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

Original author: William T. Cheek III
Continue reading
  7 Hits
  0 Comments
Tags:
7 Hits
0 Comments

Duncan Liquor Law Letter - March 2018

Happy-St-Patricks-Day-from-RE-Tuck-Duncan
 
Recent Kansas case on breath tests
 
TTB PLANS TO SUBSTANTIALLY INCREASE TRADE PRACTICE INVESTIGATIONS
 
KANSAS CASE ON UNREASONABLE TRAFFIC STOPS
 
TOTAL WINE AND MORE
 
VINTER SUES NAPA VISION 2050
 
NEW HAMPSHIRE BOOTLEGGING
 
TENNESSEE: SUPERSTORE COMES TO TENN.
 
INJURED MAN WINS $37.5 MILLION IN DRAM SHOP CASE
 
MICHIGAN: LIQUOR STORES TAKE 1/2MILE RULE TO COURT
 
DUNCAN'S MARCH 2018 BEVERAGE NEWS ARTICLE
ON PENDING KANSAS LEGISLATION
 
$18 MILLION WINE ROW

REGULATORS INVESTICATE CALIFORNIA WINERIES
FOR ILLEGAL TRADE PRACTICES
 
KOMBUCHA MAY BE SUBJECT TO ALCOHOL REGULATIONS
 
RIPPED OFF CONSUMERS SUE
 
MILLER COORS SUES COMPETITOROVER CONTRACT BREACH
 
TREASURY WINES SUES "COPYCAT"
 
ILLEGAL SALES CHARGE DROPPED AGAINST WINE STORAGE FIRM
  
IMMIGRATION COMPLAINCE
 
PALM BEACH FILES TRADEMARK LAWSUIT
 
Continue reading
  127 Hits
  0 Comments
127 Hits
0 Comments

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

Back

Category: brown bagging, wine in restaurants, ABC, Alcoholic Beverage Commission

03.09.18

Image title

Here's an oft-repeated question: can I "brown bag" — bring my own wine —  in a restaurant, hotel or bar that holds a liquor license in Tennessee?

Surprise, surprise — yes, you can.  In an unusual twist of Tennessee liquor laws, it is legal to brown bag into a restaurant, bar or club that holds a liquor-by-the-drink license.  However, it is still ultimately up to the owner to decide whether customers can bring in their own beer, wine or spirits. 

Brown bagging raises numerous questions:

Can a server uncork a bottle of wine for a customer?  Can the server provide glassware?  Once opened, should a server pour wine into a glass?  Can the server bring in an ice bucket and chill the wine or champagne?

The Tennessee Alcoholic Beverage Commission will look at control when determining whether a restaurant has violated the law concerning brown bagging. As with so many other liquor “laws,” none of the laws concerning what a restaurant can do with brown bagged wine are actually written down somewhere. 

We believe it is safe for a server to uncork a bottle of wine and provide glassware.  This shows very little control over the wine. 

When the server pours the wine, however, we believe the server may be exercising too much control over the customer’s wine.  We recommend that customers pour their own wine, in order to avoid stepping over that unwritten line of what is legal, and what is not. 

Setups are recognized as part of standard services for brown bagging.  A server can provide things like glasses and ice.  Mixing drinks, pouring wine and other bartending services fall outside the scope of what is generally accepted for brown bagging. 

We find ourselves singing Nickelback’s “Bottoms Up”:

So grab a Jim Beam, JD, whatever you need.

Have a shot from the bottle, doesn't matter to me.

'Nother round, fill 'er up, hammer down, grab a cup, bottoms up!

Although brown bagging spirits is legal in Tennessee, the ABC has a strong policy against allowing bottles of spirits in a liquor-by-the-drink establishment.  The ABC has indicated that it will cite a restaurant or bar owner if it sees a bottle of spirits on a table. 

We encourage owners to ban brown bagging of spirits.  There is nothing in the law that says that a liquor-by-the-drink establishment has to allow any form of brown bagging.  You can clearly decide to allow brown bagging wine, but not spirits. 

Tennessee law also allows an owner to charge corkage for brown bagging.  Although the law is not entirely clear, we believe that liquor-by-the-drink and sales taxes have to be paid on corkage. 

If all this seems terribly confusing, it is very simple to have a black-and-white rule.  You can prohibit brown bagging.  Nothing stops you from prohibiting customers from bringing their own alcoholic beverages into your establishment.  It is your restaurant, it is your liability, and ultimately, it is your decision.

Subscribe Now!

Tennessee Alcoholic Beverage chairman Bryan Kaegi resigns

Tennessee ABC puts the smack down on Jell-O shots

Dead again: Court strikes down Tennessee residency requirement for liquor store owners

Gov. Haslam taps newest ABC Commissioner

Original author: William T. Cheek III
Continue reading
  6 Hits
  0 Comments
Tags:
6 Hits
0 Comments

Dead again: Court strikes down Tennessee residency requirement for liquor store owners

Back

Category: ABC, liquor stores, residency requirement

02.22.18

Image title

Source: Miosotis Jade 

The verdict is in.  The two-year residency requirement for Tennessee liquor stores is officially dead.  Again.

This week, the U.S. Court of Appeals for the Sixth Circuit upheld a lower court finding that Tennessee residency requirements violate the Commerce Clause of the U.S. Constitution.  The court struck down portions of state law that require a liquor store owner to live in Tennessee for at least two years prior to applying and to be a resident for 10 years to renew a liquor store license.

This quote pretty much sums up the court’s finding:

“The Twenty-first Amendment gives a state the power to oversee the alcoholic-beverages business, but it does not give a state the power to dictate where individuals live.”

Click the link to read the court's full decision. Byrd v TN Wine and Spirits.pdf

Out of state residents qualify for retail liquor licenses in Tennessee.  This question appears to be settled, once and for all.

Just last month, the Tennessee ABC approved the first Total Wine location at 11370 Parkside Drive in Knoxville.  For those that live under a rock, Total Wine is a Maryland-based chain of liquor superstores.  Overall, it has more than 170 superstores in 20 states. Total Wine challenged and won the local residency requirement.  Twice in court, as of yesterday.

In recognition of the 50th anniversary of Mr. Roger’s immortal public TV show, this tune comes to mind:

So, let's make the most of this beautiful day.

Since we're together we might as well say:

Would you be mine?

Could you be mine?

Won't you be my neighbor?

Let’s all be neighbors and open a friendly neighborhood liquor store.  Whether you hail from Minnetonka, Minnesota; Missoula, Montana; or Moscow, Tennessee.

Subscribe Now!

Tennessee ABC puts the smack down on Jell-O shots

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

Gov. Haslam taps newest ABC Commissioner

Tennessee Sunday alcohol sales: What you need to know

Original author: William T. Cheek III
Continue reading
  5 Hits
  0 Comments
Tags:
5 Hits
0 Comments

Tennessee ABC puts the smack down on Jell-O shots

Back

Category: Tennessee Alcoholic Beverage Commission, ABC, infused liquor

02.13.18

Image title

Source: TMAB2003 on Flikr

Late last year, we began hearing from restaurants and bars that were being cited for unlabeled Jell-O shots. It seems the Tennessee Alcoholic Beverage Commission (ABC) is treating this all-American treat as an infused beverage.

Although we disagree with the ABC’s conclusion that Jell-O shots are an infusion, we lack an army of agents out in the field — busily issuing citations. Better label your favorite delightful slurpable treats, or face fines.

Here’s the fun part. There are no rules for how to label infusions. Current Tennessee law merely states that “a batch of infused product shall be labeled with a list of each ingredient contained in the infusion.”

We suggest that each batch contain the date it was made, the ingredients and the name of the infusion.

Jell-O shots are not an infusion, in our humble opinion. An infusion “is not intended for immediate consumption.” The infusion statute applies to mixtures that steep or ferment “over a sustained period of time.” Infusions are not intended to apply to mixtures that need to chill, such as frozen drinks, or jell, like Jell-O shots.

Given the ongoing confusion over infusions, we recommend that folks also label all pre-batched cocktails. Why not? It’s easy, not a bad idea, and could save you a few hundred bucks next time your friendly ABC agent stops by for a visit.

We are going to need a serious cocktail to get the Jell-O song out of our heads:

Watch it glimmer

See it shimmer

Cool and fruity

Jell-O brand gelatin

If that didn’t stick the song in your head, check out the vintage 1979 commercial:

Subscribe Now!

Dead again: Court strikes down Tennessee residency requirement for liquor store owners

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

Gov. Haslam taps newest ABC Commissioner

Original author: William T. Cheek III
Continue reading
  4 Hits
  0 Comments
Tags:
4 Hits
0 Comments

Craft distillers, brewers are big winners with Trump tax cuts

Back

Category: craft distillers, brewers, Tax Cuts and Jobs Act of 2017, tax cuts, federal excise tax, Will Cheek

01.17.18

Image title

Craft distillers, vintners and brewers generally don’t boast about being in the profession for the money. Their passion and love of the artisan trade inspire long hours in often inhospitable conditions cooking up their favorite hooch. Or so they say.

The 2017 tax cuts make it a lot easier to pocket some extra change, particularly for small distilleries. Love him or hate him, President Trump gives reason to celebrate selling more small-batch whiskey, bourbon, gin and vodka.

Starting January 1, 2018, the federal excise tax for distilled spirits is slashed from $13.50 to $2.70 per proof gallon for the first 100,000 gallons produced. With savings of $10.80 per gallon, a distillery can save up to $2.16 million in taxes over the two-year life of the tax cut.

That’s not chump change, President Trump.

The challenge, of course, is selling all that extra product. Hard to save money if you have 100,000 gallons of liquor lying around to sell. That’s roughly 500,000 bottles of whiskey on the wall – take one down, pass it around …

Even the big boys can make money from the tax cuts. Excise taxes are reduced by 16 cents for production of 100,000 to 22 million proof gallons of distilled spirits. Doesn’t sound like much, until you do the math. That’s roughly $9 million in savings, assuming you can make – and sell – 44 million gallons of booze in the next two years.

The tax cuts are nearly as profitable for small brewers, who had already been enjoying an $11 per barrel reduction. The excise tax for brewing less than 60,000 barrels is reduced from $7 to $3.50 per barrel until December 31, 2019. A small brewer can save up to an additional $210,000 per year for the next two years. That’s a $1.74 million reduction from the normal $18 per barrel excise tax rate.

The tax bill also cuts the rates for wineries, starting at $1 per gallon of wine for the first 30,000 gallons.

Which brings us to the song of our blog, our raison d’etre, dredging up catchy lines penned by our favorite composers. As we blog, we keep humming ABC’s infectious hit “(How to Be a) Millionaire”

I've seen the future, I can't afford it
Tell me the truth sir, someone just bought it
Say Mr. Whispers! Here come the click of dice
Roulette and blackjacks - gonna build us a paradise
Larger than life and twice as ugly
If we have to live there, you'll have to drug me

The full text of the law is here. HR1 Craft Beverage Modernization and Tax Reform.docx

There are a number of other provisions that impact narrow segments of the industry and we recommend a complete review of the law for those with acute insomnia.

Subscribe Now!

Can I Sell Sake in My Grocery Store in Tennessee?

To 8-K or Not to 8-K: the SEC’s Guidance on the Impact of the Tax Cut and Jobs Act

Tennessee Alcoholic Beverage chairman Bryan Kaegi resigns

Original author: William T. Cheek III
Continue reading
  6 Hits
  0 Comments
Tags:
6 Hits
0 Comments

Can I Sell Sake in My Grocery Store in Tennessee?

Tennessee liquor laws are hopelessly complicated, and the rules for sake are among the most byzantine.

Sake is rice wine.  Is it wine under Tennessee law?

No.  Wine is made from grapes or other fruit.  Rice is a grain.

Sake is clear and tastes like liquor.  It must be liquor.  Ever slammed a sake bomb?  But sake is not distilled and is not a spirit.

Sake is brewed.  Is it a beer?  It doesn’t have malt and hops and certainly doesn’t taste like Budweiser.

But voila, sake is beer under Tennessee law. Brewed from grain, like our favorite cereal in a can – beer.

Yes, Virginia, you can sell sake in your grocery or food store.  Well, at least some kinds of sake.

Remember that pesky high gravity rule about beer?  Beer under 8% by volume and 10.1% by weight can be sold in a food store or convenience market.  Beer over 8% ABV must be sold in a liquor store.

Same rules apply for sake, because sake is beer under Tennessee’s tortuous liquor laws.

We ransacked what is left of our minds, and turned up naught for songs about sake.  But we couldn’t resist the Vapor’s infectious one hit wonder “Turning Japanese”

I’ve got your picture, I’ve got your picture
I’d like a million of them all round my cell
I asked the doctor to take your picture
So I can look at you from inside as well 

You’ve got me turning up and turning down
And turning in and turning ’round
I’m turning Japanese
I think I’m turning Japanese
I really think so
Original author: William T. Cheek III
Continue reading
  281 Hits
  0 Comments
Tags:
281 Hits
0 Comments

Online Applications Going Live With the Tennessee ABC

The Tennessee ABC will be launching its new online system, RLPS, starting January 22, 2018.  Zack Blair, Assistant Director for the Tennessee ABC, lead an informative session for industry members yesterday, December 5, 2017, where ABC staff previewed the system and answered questions.

Assistant Director Blair tells us that “The Commission is excited to be able to revolutionize and create more efficiency in licensing.  We look forward to allowing customers to complete everything in an electronic form and provide them the ability to pay online.”

The new system, known as RLPS, becomes available on January 22, 2018 for users to:

·         preview

·         create accounts

·         enter information, but not submit applications.

Starting February 1, 2018, RLPS goes live.  At that point, all applications must be filed on RLPS.

This includes renewals.

The ABC will be in the process of scanning and uploading existing files into RLPS.  We expect this process to take some time.  In the meantime, applicants may want to upload PDFs of documents to be referenced in existing files.

RLPS is being implemented without any additional user fees.  We were pleased to learn that credit cards can be used without additional user fees, which we consider to be a hidden tax often assessed by regulatory agencies.  Kudos to the ABC for eliminating these charges.

RLPS eliminates the need for notaries on questionnaires, declarations and many other documents.  No authentication is required for information submitted in lieu of questionnaires and other documents.

TTB applicants will find RLPS familiar, as it is based on the same system.

The ABC is creating master files for licensees with multiple licenses, which we expect to be particularly helpful for large grocery stores filing WIGS renewals.

The cryptic lyrics to the 1969 hit song “In The Year 2525” come to mind:

In the year 2525, if man is still alive

If woman can survive, they may find

In the year 3535

Ain’t gonna need to tell the truth, tell no lie

Everything you think, do and say

Is in the pill you took today

Original author: William T. Cheek III
Continue reading
  228 Hits
  0 Comments
Tags:
228 Hits
0 Comments

Leadership at Nashville Beer Board Takes Charge

The Metro Beer Board officially coronated Benton McDonough as Executive Director at its November 2, 2017 meeting.  Could Sainthood be next?

Director McDonough and Board Chair Brian Taylor have certainly been busy rocking the boat with new changes at the Metro Beer Board.

Hold on to your pacemaker for this one: the Metro Beer Board now accepts personal checks and business checks.  This is in addition to authorizing credit cards, which was a huge change earlier this year.

For over two decades, we have been advising folks to take exact change or cashier’s checks to pay application fees, the $100 privilege tax and fines.  No more for brew-slinging Music City businesses.

Check this one out.  The Beer Board Staff now has the authority to issue a temporary beer permit – without Beer Board approval.  Once your beer permit application is complete, you automatically qualify for a temporary beer permit.  No more timing final inspections with Metro Beer Board meeting dates.

If that’s not enough, yesterday the Beer Board announced that staff will expand the hours for taking calls to answer general questions regarding beer permits applications, from 7:30 a.m. until Noon Central Time, Monday through Friday.  The Beer Board can be reached at 615.862.6751.

Nashville favorite Luke Bryan captures the mood in his hit “Drink a Beer”

So I’m gonna sit right here

On the edge of this pier

Watch the sunset disappear

And drink a beer.

In case you have not gotten the message, the Metro Beer Board ditched the daily proration of privilege taxes and now accepts monthly proration of privilege tax.  See the chart to calculate the amount for your new beer permit fee:

Month Amount
January $100.00
February $91.70
March $83.40
April $75.10
May $66.80
June $58.50
July $50.20
August $41.90
September $33.60
October $25.30
November $17.00
December $8.70

Please note that the fee is not due when a temporary beer permit issues. You only pay the fee after the Metro Beer Board has issued you a final beer permit.

Keep in mind that the fee for a renewed beer permit, also known as the annual privilege tax, remains $100.

William T. Cheek III

William T. Cheek III

As the only Tennessee attorney named Best Lawyers in America for Food and Beverage Law, Will Cheek leads firm’s Alcoholic Beverage Team and provides licensing and regulatory compliance advice to restaurants, hotels, bars, clubs, craft distilleries and breweries. Will’s clients range from small chef-owned restaurants to large publicly traded corporations. He is nationally known as the go-to source for Tennessee liquor law and authors the blog Last Call, covering Tennessee alcohol, restaurant and hospitality news.

William T. Cheek III

Latest posts by William T. Cheek III (see all)

Share on FacebookTweet about this on TwitterShare on LinkedInEmail this to someonePrint this page
Original author: William T. Cheek III
Continue reading
  416 Hits
  0 Comments
Tags:
416 Hits
0 Comments

When is Happy Hour Not so Happy In Tennessee?

The rules on Happy Hour in Tennessee can drive you to drink.  Make that a double.

Nothing good seems to happens after 10 pm, or at least so thinks the Tennessee state legislature. After 10 pm, bars cannot:

sell or serve more than one drink at a time pour more alcohol for the same price

The exceptions to the rules make it fun – for sick folks that like obtuse facts, like lawyers.

First of all, beer is happy, day or night.  Happy hour rules do not apply to beer.

Half price cocktails and other drink discounts are timeless.  Tennessee ditched the old rule that prohibited discounting drinks after 10 pm.

2-4-1 is tricky.  Although you can discount drinks until close, you cannot serve 2 drinks to a customer after 10 pm.

And speaking of doubles, bring it on, as long as the price for a second shot is the same, day or night.  Offering discounted doubles after 10 pm can violate the rule against pouring more alcohol for the same price after 10 pm.

Be careful with drink chips and other free drink promotions.  Tennessee state law prohibits giving away wine or spirits.  You can do 2-4-1 with a drink chip, as long as the chip is redeemed by 10 pm.  Redeem the chip after 10 pm and you violate happy hour laws.  If the customer tries to redeem the chip for a drink on the next day, you are giving away liquor and can be cited.

Beware of bottomless mimosas, bloody mary’s and other cocktails.  Serving too many drinks for a fixed price can violate the rule against giving away liquor.  You can also get folks drunk.  State law prohibits serving alcohol to a visibly intoxicated person.

I know, isn’t that the whole purpose for going to a bar anyway: to get drunk?

We have been quietly humming the Ren & Stimpy oh-so-sarcastic theme song whilst posting this happy hour nonsense:

Happy Happy Joy Joy
Happy Happy Joy Joy Joy
I don’t think you’re happy enough. That’s right! I’ll teach you to be
Happy. I’ll teach your grandmother to suck eggs
Happy Happy Joy Joy…

Original author: William T. Cheek III
Continue reading
  312 Hits
  0 Comments
Tags:
312 Hits
0 Comments

Landlords with Percent Rent from Liquor Get Some Love from Tennessee ABC

By - September 19, 2017 | Alcoholic Beverage Law | Email Will Cheek

Landlords know this problem all too well. The Tennessee Alcoholic Beverage Commission calls a landlord an “indirect owner” if the landlord that receives 5% or more in percentage rent from the sale of alcohol.

The ABC requires that the landlord file an ABC questionnaire for the landlord company.  Recently, the ABC has been requiring that at least one corporate officer of the landlord also file an ABC questionnaire.

Landlords are understandably concerned about having an “indirect interest” in a liquor license.  Landlords generally have nothing to do with the sale of alcohol, other than an arms-length lease to a tenant that holds an alcoholic beverage license.  Filing a questionnaire or otherwise “being on the liquor license” raises concerns that a plaintiff might sue the landlord in a dram shop action for liquor liability.

In addition, ABC questionnaires require officers to divulge confidential personal information, including a social security number.

We are pleased to announce that the ABC recently discontinued ABC questionnaires for landlords having percent rent.  Instead, the ABC published the “Landlord Interest Affidavit.”

The Landlord Interest Affidavit dispatches with personal information and is limited to factors that would disqualify a landlord from receiving rental income from the sale of alcohol.

Snoop Dogg’s classic “Show Me Some Love” seems appropriate:

You don’t show me some love
(show me love, for real, you gets no love, yea)
You gets no loving babe 
(you gets no love, you ain’t gonna miss it till it’s gone) 

We applaud the ABC for responding to this industry concern and showing some love to landlords.

Original author: William T. Cheek III
Continue reading
  304 Hits
  0 Comments
Tags:
304 Hits
0 Comments