Tennessee Alcoholic Beverages and Beer Tax Guide - August 2015
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Tennessee
Alcoholic Beverages and
Beer Tax Guide
August 2015TENNESSEE TAXES ON ALCOHOLIC BEVERAGES AND BEER
Dear Tennessee Taxpayer,
This publication is designed to help taxpayers better understand the Tennessee taxes on alcoholic
beverages and beer, including the collection and remittance of the taxes. The taxes on alcoholic
beverages and beer are a part of the Tennessee tax structure. You may find compliance easier when
you know more about these taxes. Please take time to acquaint yourself with how these taxes may
apply to you. This guide to the taxes on alcoholic beverages and beer does not have the effect of
law but is intended as an informal reference for taxpayers who wish to gain a better understanding
of the requirements of the Tennessee taxes on alcoholic beverages and beer. It is not an all-inclusive
document. The tax guide is not intended as a substitute for the statutes or Rules and Regulations
concerning Tennessee taxes on alcoholic beverages and beer, nor is it intended to be a statement of
Department of Revenue policy. The information in this guide is current as of the date of publication
but could change as the tax laws, their interpretation, and their application do change from time to
time because of legislative action, reviews, and court decisions.
Periodically, registered taxpayers are mailed information letters with updates on tax laws and
policies. Be sure to read any letter you receive carefully; this information may save you time and
money. Informational publications are also available for specific industries. Contact the Taxpayer
Services Division to obtain these publications.
The Department of Revenue offers a toll free tax information line for Tennessee residents. The
number is (800) 342-1003. Nashville or out-of-state callers may call (615) 253-0600. The Department
of Revenue also offers a telecommunications device for the deaf (TDD) line at (615) 741-7398.
In addition, the Department of Revenue offers a HOT LINE number for the exclusive use of tax
practitioners. In-state practitioners may call toll free (800) 397-8395. Nashville and out-of-state
callers phone (615) 253-0700.
If you have questions, please do not hesitate to contact any of the offices listed below.
Sincerely,
Taxpayer Services Division
Tennessee Department of Revenue Toll Free: (800) 342-1003
Taxpayer Services Division Out-of-State: (615) 253-0600
Andrew Jackson Building TDD: (615) 741-7398
500 Deaderick Street
Nashville, Tennessee 37242-1099
Regional Offices
Memphis: Chattanooga: Jackson:
3150 Appling Road 1301 Riverfront Parkway Lowell Thomas State Office Building
Bartlett, TN 38133 Suite 203 225 Dr. Martin L. King Jr. Drive
(901) 213-1400 Chattanooga, TN 37402 Suite 340
(423) 634-6266 Jackson, TN 38301
(731) 423-5747
1TENNESSEE TAXES ON ALCOHOLIC BEVERAGES AND BEER
Regional Offices (continued)
Johnson City: Knoxville
204 High Point Drive 7175 Strawberry Plains Pike
Johnson City, TN 37601 Suite 209
(423) 854-5321 Knoxville, TN 37914
(865) 594-6100
2TENNESSEE TAXES ON ALCOHOLIC BEVERAGES AND BEER
Changes to the Alcoholic Beverages and Beer Tax Guide for August 2015
(1) Added section on sales of wine sales at satellite locations. (Page 15)
(2) Added provision allowing manufacturers to buy alcoholic beverages. (Page 42)
3TENNESSEE TAXES ON ALCOHOLIC BEVERAGES AND BEER
Table of Contents
Alcoholic Beverage Commission 7
Powers and Duties of the Commission 7
Licensing Procedures 8
License Classifications 8
Alcoholic Beverage Collectors 9
Wine Direct Shippers 9
Winery Licenses 10
Wine Festivals 10
Wine Sales in Grocery Stores 11
Manufacturers and Distillers 11
High Alcoholic Beer Manufacturers 11
Privilege Tax on Manufacturers 12
Sales Of Alcohol For Consumption On The Premises 13
Local Referendum Required 13
Application Procedure 13
Bond Requirement 13
Taxes and Fees 14
Tax on Gross Sales 15
Commercial Airlines, Paddlewheel Steamboats, and Passenger Trains 15
Art Galleries 15
Wine Sales at Satellite Locations 15
Restrictions on the Disposition of Alcoholic Beverages 16
Wine or Spirits Used in Food Preparation 17
Reports to the Commissioner 17
Returns and Payment 17
Extension 18
Failure to File Timely Returns 18
Records 18
Transfer of Business Ownership 19
Mixing Bar Tax 20
Exceptions 20
Returns and Payment 20
Records 20
Brand Registration 21
“Brand” Defined 21
The Measure of the Tax 21
Introduction of a New Brand 22
Failure to Register a New Brand 22
Transfer of Brands 22
High Alcohol Content Beer 23
Wholesale Gallonage Tax 24
Liability 24
The Measure of the Tax 24
Exceptions 24
4TENNESSEE TAXES ON ALCOHOLIC BEVERAGES AND BEER
Table of Contents
Wholesale Gallonage Tax
Payment 24
Records 25
Documenting Credits from Gross Sales 25
Sales to Other Wholesalers 25
Returns or Exports 25
House Breakage 25
Sacramental Wine 25
Loss by Fire or Act of Nature 26
Military Sales 26
Wholesaler’s Bond Requirement 26
Transportation of Alcoholic Beverages 27
Transporter’s Bond Requirement 27
Documents Required for Shipment 27
Wholesale Case Tax On Alcoholic Beverages 28
Returns and Payment 28
Beer And Alcoholic Beverages Containing Up To 5% Alcohol 29
Registration of Manufacturers and Wholesale Distributors 29
Failure to Register 29
County or City Permit Required 29
Classification of Counties 30
Resale Certificate 30
Application for Permit 30
Annual Privilege Tax 31
Notice to Permit Holders 31
Licenses to Sell Outside of Town or City Limits 31
Bonds – Warehousemen, Dealers, and Manufacturers 32
Barrels Tax 33
Liability for the Tax 33
Purchase of Beverages 33
Enforcement of the Tax 33
Exempt Sales 34
Credit for Military Sales 34
Payment of the Tax 34
Delinquent Payment of the Tax 34
Records 34
Wholesale Beer Tax 36
The Levy of the Tax 36
Exemption for Military Sales 36
Adjustments 36
Damaged Containers 36
Out-of-state Shipments 37
5TENNESSEE TAXES ON ALCOHOLIC BEVERAGES AND BEER
Table Of Contents
Wholesale Beer Tax
Repurchase of Previously Sold Beverages 37
Gifts or Discounts 37
Payment of the Tax 37
Delinquent Returns 38
Cash Sales 38
Wholesale Price List 38
Changes in Wholesale Price 38
Designated Sales Territories 39
Change of Wholesaler 39
Wholesaler’s Bond 40
Records and Reports 40
Investigations 40
Miscellaneous Fees And Permits 42
Municipal Inspection Fee 42
Non-Resident Seller’s Permit 42
Inspections of Permit Holders 42
Employee and Server Permits 43
Transportation Of Beer And Light Alcoholic Beverages 44
Liability for Tax on Goods Damaged in Transit 44
Change of Consignee or Delivery Destination 44
Transportation Without Payment of Tax 44
Contraband 45
Notification of Seizure 46
Claims Procedure 46
Designation of Hearing Officer 47
Release of Goods to Claimant 47
Commissioner’s Ruling 48
Hearing Costs and Fees 49
General Information 50
Mailing Date for Returns 50
Penalties and Penalty Waivers 50
Interest 50
Right to a Conference 50
Audits and Assessment 51
The Taxpayer Bill of Rights 52
6TENNESSEE TAXES ON ALCOHOLIC BEVERAGES AND BEER
Alcoholic Beverage Commission
[Tenn. Code Ann. Section 57-1-102]
+ “High alcoholic content beer” – An
The Alcoholic Beverage Commission is alcoholic beverage which is beer, ale, or
established by law as the licensing and other malt beverage having an alcoholic
regulatory body for all persons wishing to content of more than 5% by weight and
engage in the manufacturing, distilling, not more than 20% by weight, except
mixing, or selling of beverages containing wine, as defined in Tenn. Code Ann.
certain percentages of alcohol. The scope of Section 57-3-101, that is brewed,
this regulation encompasses these beverages: regulated, distributed or sold, provided
that no more than 49% of the overall
+ “Alcoholic beverage” or “beverage” - alcoholic content of such beverages may
Includes alcohol, spirits, liquor, wine, be derived from the addition of flavors
high alcoholic content beer, and every and other nonbeverage ingredients
liquid containing alcohol, spirits, or wine containing alcohol
and capable of being consumed by a
human being, other than patent The Alcoholic Beverage Commission consists
medicine, or beer where the latter of three members appointed by the governor.
contains an alcoholic content of 5% by The Commission has authority to appoint a
weight or less. It includes any liquid director, assistant director, and a chief law
product containing distilled alcohol, enforcement officer who serves under the
capable of being consumed by a human supervision of the director. No person is
being, made with distilled alcohol no eligible to be appointed to, or employed by,
matter what the alcoholic content. the commission if that person or any family
Products or beverages containing less member has any interest, financial or
than 0.05% alcohol by volume, other otherwise, either direct or indirect, in any
than wine as defined in Tenn. Code Ann. distillery, wholesale dealer, retail dealer, or
Section 57-3-101, shall not be building occupied by any such dealer licensed
considered to be alcoholic beverages as such in the state of Tennessee. Nor may
and shall not be subject to regulation or any member of the commission own stock or
taxation under Tenn. Code Ann. Title 57. any interest in such activity.
+ “Wine” - The product of the normal
alcoholic fermentation of the juice of Powers and Duties of the Commission
fresh, sound, ripe grapes, with the usual
cellar treatment and necessary The Commission is authorized to adopt and
additions to correct defects due to promulgate the rules and regulations that
climatic, saccharine, and seasonal pertain to alcoholic beverages. The
conditions, including champagne, commission may alter, amend, or repeal any
sparkling and fortified wine of an parts of the rules and regulations as it deems
alcoholic content not to exceed 21% by necessary. The commission may promulgate
volume. No other product may be called rules governing the conduct of educational
“wine” unless designated by appropriate seminars conducted by businesses licensed
prefixes descriptive of the fruit or other under Tenn. Code Ann. Section 57-3-204.
product from which the beverage was [Tenn. Code Ann. Section 57-1-209]
predominantly produced, or an artificial
or imitation wine.
7TENNESSEE TAXES ON ALCOHOLIC BEVERAGES AND BEER
Alcoholic Beverage Commission
(continued)
employment. If a license or permit has
The commission is authorized to investigate been issued, the commission shall issue
and/or arrest, without warrant or process, any a citation to the licensee or permittee to
person who the arresting officer has probable show cause why the license or permit
cause to believe is committing or attempting should not be suspended or revoked. All
to commit a felony in violation of Title 39, data, written statements, affidavits,
Chapter 17, Part 4, if the felony is committed evidence, or other documents
on premises licensed by the commission, on submitted in support of an application
any premises under investigation by the are a part of the application.
commission in conjunction with its other + Make, alter, amend, or repeal rules and
duties and responsibilities, or any other regulations and prescribe all forms of
premises selling alcoholic beverages as application, licenses, and tax stamps,
defined in Tenn. Code Ann. Section 57-3-101, and of all reports and other papers and
whether licensed or unlicensed. [Tenn. Code documents required in the enforcement
Ann. Section 57-1-210] of Tenn. Code Ann. Title 57.
Licensing Procedures License Classifications
[Tenn. Code Ann. Section 57-3-104]
The Alcoholic Beverage Commission may
The Commission has the authority, by and issue, under provisions of state law, the
with the consent of the governor, to: classes of licenses and permits listed below.
Beer permits are issued by the respective city
+ Employ persons necessary for the or county government where the
effective administration and establishment seeking the license is located.
enforcement of state law. It has the duty Licenses and permits issued by the Alcoholic
and power to issue all licenses in Beverage Commission are:
respect to, or for, the manufacture,
importation, bottling, keeping, giving + Manufacturer’s, distiller’s, or rectifier's
away, furnishing, possession, license;
transportation, sale, and delivery of + Liquor wholesaler’s license;
alcoholic beverages, and to revoke any + Liquor retailer’s license; and
license whatsoever, that it has the + Winery license. [Tenn. Code Ann. Section
authority to issue. 57-3-207]
+ Refuse to issue a license or permit if, + Nonresident seller’s permit. [Tenn. Code
upon investigation, it finds that the Ann. Section 57-3-605]
applicant for a license or permit has + Employee and Server permits. [Tenn.
concealed or misrepresented any Code Ann. Section 57-3-702]
material fact or circumstance + Direct Shipper’s License [Tenn. Code Ann.
concerning the operation of the Section 57-3-217]
business or employment, or if the + Alcoholic Beverage Collector’s License
interest of the applicant in the operation + Winemaking on Premises Facility License
of the business or employment is not + Farm Wine Permit
truly stated in the application, or in case + Retail Food Store Wine License [Tenn.
of any fraud or false swearing by the Code Ann. Section 57-3-803]
applicant touching any matter relating
to the operation of the business or
8TENNESSEE TAXES ON ALCOHOLIC BEVERAGES AND BEER
Alcoholic Beverage Commission
(continued)
license is $300 and the annual license fee is
Any person, firm, or corporation desiring to $1,000. The license allows the collector to
manufacture, distill, rectify, or sell wine or purchase beverages and to sell, in face-to-face
other alcoholic beverages must apply to the transactions, collectible beverages to persons
commission, on forms furnished by the aged 21 or older. Sales prices must be at least
commission, for a permit to do so. No person, 300% of the sales price of the same brand and
firm, or corporation is authorized to engage in quantity sold at a retail.
any of these activities until the permit is
approved and issued by the commission. Alcoholic beverage collectors are liable for
There are general requirements for all payment of all sales taxes due on such sales
licenses and specific requirements that are made by the collector to others. If the
pertinent to the type of license or permit collector cannot demonstrate that the
required. For information regarding the collectible alcoholic beverage was purchased
licensing requirements, fees, and procedures, from a licensed retailer, the collector will also
please contact the Alcoholic Beverage be liable for payment of the appropriate
Commission at (615) 741-1602. Any person, wholesale gallonage taxes to the Department
firm, or corporation desiring to brew or sell of Revenue.
beer should contact their local city or county
government for applicable information. Wine Direct Shippers
[Tenn. Code Ann. Section 57-3-217]
The same entity that grants the license has
the power to revoke the license for sufficient Any entity holding a federal basic permit
cause under Tenn. Code Ann. Sections 57-3- issued under the Federal Alcohol
104(c)(1) and 57-5-108(a). Information relating Administration Act and in the business of
to rules, procedures, applicable state and manufacturing, bottling, or rectifying wine can
local laws, and license revocation and relief apply to the Alcoholic Beverage Commission
procedures should also be obtained from the for a wine direct shipper’s license. A person
licensing agency at the time of application. meeting the licensing requirements and
receiving a direct shipper’s license can make
Alcoholic Beverage Collectors sales and deliveries of wine by common
[Tenn. Code Ann. Section 57-3-209] carrier to Tennessee citizens 21 years of age
or older.
An “alcoholic beverage collector” is defined as
a person who collects commemorative bottles Sales cannot exceed nine liters to any
containing alcoholic beverages, wine, or individual during a calendar month or twenty-
distilled spirits and displays the collection in a seven liters to one individual in a calendar
place available to the public, either by year.
appointment or regular schedule, and who
sells collectible alcoholic beverages for the There is a fee of $300 for the application and
purpose of collection, without the intent that an annual license fee of $150.
the collectible beverage would be consumed.
Direct shippers must also remit to the
A person qualifying as an alcoholic beverage Department of Revenue the appropriate
collector may apply to the Alcoholic Beverage Tennessee alcoholic beverage gallonage taxes
Commission for an alcoholic beverage on such sales as well as the required sales
collector’s license. The application fee for such
9TENNESSEE TAXES ON ALCOHOLIC BEVERAGES AND BEER
Alcoholic Beverage Commission
(continued)
Tennessee may sell such items as their state
taxes resulting from such sales. Taxes will be laws allow.
due not later than the 20th of the month
following the month in which the sale was Wineries located in Tennessee may sell no
made. more than five cases or sixty liters of wine to a
single retail customer in one day. Purchasers
Winery Licenses of wine from out-of-state Tennessee-licensed
[Tenn. Code Ann. Section 57-3-207]
wineries cannot legally transport into
Tennessee more than five cases or sixty liters
Winery licenses may be issued to any entity
of such wine in one day. Persons purchasing
meeting the statutory requirements of Tenn.
and transporting such wine must have a bill of
Code Ann. Section 57-3-207. The license
sale that identifies the nature, quantity,
holder may manufacture and bottle, but may
purchaser, and date and place of purchase of
not rectify, alcoholic vinous beverages unless
the wine.
the license holder also holds a license to distill
and/or rectify alcoholic spirits. Wineries
Bills of sale for wine purchased from out-of-
located outside Tennessee may apply for and
state Tennessee-licensed wineries must
receive winery licenses.
reflect that the wine was purchased for
transport into Tennessee and that Tennessee
Applicants for winery licenses must remit a
taxes have been paid.
fee of $300 with the license application. There
is an annual license fee of $150, which must
Wine Festivals
be remitted prior to issuance of an approved
license. Any nonprofit entity organized to encourage
and support grape growing and winemaking
Licensed wineries may serve wine without with membership of ten or more such
charge as complimentary samples for tasting licensed wineries as members can hold no
at the winery and may sell wine at retail in more than eight wine festivals per calendar
sealed containers at the winery, but not for year. Each festival cannot exceed 72 hours in
consumption on the premises. Wineries may length.
donate wine without charge to nonprofit
religious, educational, or charitable Participating wineries can transport and offer
organizations. one-ounce complimentary samples of their
wines at such festivals. Server permits issued
Wineries may exchange wine in bulk with by the Alcoholic Beverage Commission are
other wineries. Such exchange will not be required. Participating wineries can also offer
considered a sale. sales of their wine products for consumption
off the premises.
In addition to its own wines, licensed wineries
located in Tennessee may also sell on their Nonprofit entities holding wine festivals must
own premises juices or concentrates derived obtain a special occasion license from the
from any agricultural products, items used in Alcoholic Beverage Commission in order to
home winemaking, and other gifts, tourism, or serve complimentary samples and make sales
wine-related products as allowed by of wine for consumption off the premises.
regulation. Wineries located outside
10TENNESSEE TAXES ON ALCOHOLIC BEVERAGES AND BEER
Alcoholic Beverage Commission
(continued)
Alcoholic Beverage Commission and
Wine Sales in Grocery Stores permitted by federal law. [Tenn. Code Ann.
Section 57-3-204(f)(6)]
Effective March 20, 2014, any jurisdiction that
has previously held and passed a referendum High Alcoholic Beer Manufacturers
allowing retail package stores or the sale of [Tenn. Code Ann. Title 57, Chapter 3]
alcoholic beverages for consumption on the
premises may hold a referendum to A manufacturer of high alcoholic content beer
determine if sales of wine can be made in a may manufacture such product in any
retail food store in the jurisdiction. jurisdiction without a voter referendum as
long as the municipality or unincorporated
A “retail food store” is an establishment open area of a county allows, as a result of a prior
to the public and that derives at least 20% of voter referendum, both retail package sales
its sales taxable sales from the retail sale of and consumption of alcoholic beverages on
food and food ingredients for human the premises. [Tenn. Code Ann. Section 57-2-
consumption, as defined in Tenn. Code Ann. 103]
Section 67-6-228, and has retail floor space of
at least 1,200 square feet. If such manufacturer holds a retail license to
sell alcoholic beverages, the manufacturer can
Establishments wishing to sell wine must, make retail sales of its product at a retail
upon approval of the referendum by the local location on the manufacturer’s premises. The
jurisdiction, apply to the ABC for a retail food manufacturer can sell no more than five
store wine license and pay a one-time $400 gallons or 1/6th barrel of beer or high alcohol
nonrefundable fee with the application. content beer, or any combination, to any one
Criteria for the application process will be individual per visit to the premises.
established by the ABC.
The manufacturer may also hold a license as a
The annual license fee will be $1,250. In order restaurant or limited service restaurant
to renew the license each year, the located on the manufacturer’s premises and
establishment must maintain at least 20% of may sell the manufacturer’s beer or high
its retail sales from the sale of food and food alcohol content beer at such a restaurant.
ingredients. [Tenn. Code Ann. Sections 57-3-
801 - 57-3-818] If the manufacturer obtains a license to sell its
product at a retail store on the manufacturer’s
Manufacturers and Distillers
premises, the local jurisdiction shall impose a
15% inspection fee on the wholesale price of
Any manufacturer or distiller holding a retail
such high alcoholic content beer sold at the
license may serve samples of the product
retail store to inspect the retail store.
manufactured or distilled to any person of
legal drinking age without cost and may
The gallonage taxes imposed on sales of high
include such samples as part of a tour of the
alcoholic content beer are the same as those
manufacturer’s or distiller’s premises. The
imposed on wine in Tenn. Code Ann. Sections
samples may be made available on the
57-3-302(a) or on alcoholic beverages in Tenn.
premises of the retailer or at any other
Code Ann. Section 57-3-303(l), whichever is
location of the manufacturer or distiller when
applicable.
the other location has been reported to the
11TENNESSEE TAXES ON ALCOHOLIC BEVERAGES AND BEER
Alcoholic Beverage Commission
(continued)
Privilege Tax on Manufacturers
[Tenn. Code Ann. Section 57-2-102]
Before any person engages in the
manufacture of intoxicating beverages or high
alcohol content beer, the person must pay a
privilege tax of $1,000 to the county in which
the manufacturing facility is located and a
privilege tax of $1,000 to the Tennessee
Department of Revenue. The Department of
Revenue and the county must issue a license
authorizing the operation of the
manufacturing business.
If the manufacturing business will also be
located in a municipality in Tennessee, the
manufacturer must also pay a privilege tax of
$1,000 to the municipality. The municipality
will issue a license authorizing the
manufacturing plant to operate.
12TENNESSEE TAXES ON ALCOHOLIC BEVERAGES AND BEER
Sales Of Alcohol For Consumption On The
Premises (Liquor by the Drink)
[Tenn. Code Ann. Section 57-4-101] Local Referendum Required
Under state law, it is legal for certain Although these taxpayers are qualified to sell
taxpayers to sell alcoholic beverages, wine, liquor by the drink under state law, none may
and beer for consumption on the premises. engage in sales of alcoholic beverages
These taxpayers, as defined in Tenn. Code and wine for consumption on the premises in
Ann. Section 57-4-102, include: any county or municipality that has not
approved these sales by a popular
+ Hotels and motels. referendum in that county or municipality.
+ Commercial passenger boat companies. Approval of these sales by referendum must
+ Restaurants. be certified to the Alcoholic Beverage
+ Commercial airlines. Commission by the county election
+ Passenger trains. commission. If a county referendum has
+ Charitable, nonprofit, or political approved sales of alcoholic
organizations. beverages, wine, or beer for consumption off
+ Tourist resorts or clubs. the premises, then any municipality within
+ Convention centers. that county may conduct a referendum to
+ Historic performing arts centers. authorize sales for consumption on the
+ Urban park centers. premises within the boundaries of that
+ Historic interpretive centers. municipality.
+ Community theaters.
+ Historic mansion houses. Application Procedure
+ Terminal buildings of commercial air
If sales for consumption on the premises, also
carriers.
referred to as liquor by the drink, have been
+ Zoological institutions.
approved in the county or municipality, then
+ Museums.
qualified entities may apply to the Alcoholic
+ Commercial airline travel clubs.
Beverage Commission, according to the
+ Public aquariums or aquarium exhibition
commission’s requirements, for a permit to
facilities.
sell wine and spirits. (They must apply to the
+ Caterers.
local authorities for approval to sell beer.)
+ Sports authority facilities.
Restaurants may apply to sell wine only,
+ Clubs.
under the provisions of Tenn. Code Ann.
+ Bed and breakfast establishments.
Section 57-4-101(c)(1). After receipt and
+ Motor speedways
proper investigation of the application, the
+ Theaters.
Alcoholic Beverage Commission will decide
+ Paddlewheel steamboat companies.
whether or not a permit will be issued. For
+ Special historic district (wine only).
complete licensing requirements and rules,
+ Other facilities as specified.
call the Alcoholic Beverage Commission.
These taxpayers are very specifically defined
Bond Requirement
in Tenn. Code Ann. Section 57-4-102. Any [Rule 1320-4-2-.02]
taxpayers with questions as to whether or not
they qualify as one of the entities listed above Each person seeking a license to make sales
should read the cited Tennessee code section for consumption on the premises must, as a
or call the Alcoholic Beverage Commission. condition prior to the granting of the license,
13TENNESSEE TAXES ON ALCOHOLIC BEVERAGES AND BEER
Sales Of Alcohol For Consumption On The
Premises (Liquor by the Drink) (continued) Entity Tax July 1, 2004 Previously
Private Club $ 500 $ 300
post security with the Commissioner of Convention Center $ 1000 $ 500
Revenue. This security may be in the form of a Premier Type Tourist
corporate surety indemnity bond, a cash Resort $ 2000 $ 1500
deposit, or a bond secured by a certificate of Historic Performing Arts
deposit. This security will be posted to insure Center $ 150 $ 300
proper payment of all taxes incurred for Urban Park Center $ 150 $ 500
which the applicant may become liable. Commercial Passenger Boat
Company $ 1250 $ 750
For all licensees, other than restaurants Historic Mansion House
selling only wine, the amount of the initial Site $ 150 $ 300
security will be $10,000. For restaurants Historic Interpretive
selling only wine, the amount of the initial Center $ 150 $ 300
security will be $2,000. After the first 3 Community Theater $ 150 $ 300
months of operations and timely submission Zoological Institution $ 150 $ 300
of all required reports and returns, the Museum $ 150 $ 300
licensee can submit a written request to have Commercial air carrier terminal
the security adjusted to 4 times the average building facility $ 1500 $ 1000
monthly tax liability of the first 3 months. The Commercial Airline Travel
security amount cannot be adjusted to less Club $ 1000 $ 500
than $1,000. Public Aquarium $ 150 $ 300
Motor Speedway $ 2000 $ 1000
After the first 3 months of doing business, the Sports Facility $ 2000 $ 1000
Commissioner may also determine that the Theater $ 150 $ 300
security should be adjusted to 4 times the
average monthly tax liability. If required, 07/2006 07/2005 07/2004 07/2003
additional security must then be posted to Restaurant
cover the amount required. Failure to post 75-125 Seats $ 750 $ 700 $ 650 $ 600
security as determined by the Commissioner, 126-175 Seats$ 925$ 850 $ 800 $ 750
or forfeiture or cancellation of any portion of 176-225 Seats$ 975$ 900 $ 850 $ 800
the security posted, will cause any application 226-275 Seats$ 1100$ 1025 $ 950 $ 900
for license or renewal of license to be 276 Seats + $1200 $ 1125 $ 1050 $ 1000
disapproved.
Restaurant (wine only)
Taxes and Fees 40-74 Seats $ 650
[Tenn. Code Ann. Section 57-4-301]
75-125 Seats $ 270 $ 220 $ 170 $ 120
126-175 Seats $ 300 $ 250 $ 200 $ 150
Any person engaging in the retail sales of
176-225 Seat $ 310 $ 260 $ 210 $ 180
alcoholic beverages, wine, or beer for
226-275 Seats $ 330 $ 280 $ 230 $ 180
consumption on the premises is exercising a
276 Seats + $ 350 $ 300 $ 250 $ 200
taxable privilege. The state legislature has
established the following state taxes, to be
paid annually to the Alcoholic Beverage
Commission:
14TENNESSEE TAXES ON ALCOHOLIC BEVERAGES AND BEER
Sales Of Alcohol For Consumption On The Art Galleries
Premises (Liquor by the Drink) (continued)
Effective June 15, 2004, art galleries that do
07/2006 07/2005 07/2004 07/2003 not sell food or beverages and that receive
Hotel or Motel 90% of their revenue from the sale of artwork
0 – 99 rooms $1000 $1000 $1000 $1000 may serve wine to patrons without a charge.
100 – 399 rooms $1250 $1200 $1000 $1000 These art galleries are not required to pay a
400 rooms + $1500 $1400 $1200 $1000 license fee or taxes related to the privilege of
serving wine. [Tenn. Code Ann. Section 57-4-
Special Historic District (Wine Only) $ 100 105]
[Tenn. Code Ann. Section 57-4-301(g)]
Wine Sales at Satellite Locations
Each county or municipality where one of [Tenn. Code Ann. Section 57-3-207]
these entities exercises its privilege may also
Any winery or any farm wine producer
levy and collect the privilege tax separately.
licensed by the ABC may conduct business at
However, the privilege tax collected by the
any two satellite facilities in any jurisdiction
county or municipality is based upon 2003
where it is lawful to manufacture intoxicating
rates.
liquors or intoxicating drinks pursuant to
Tax on Gross Sales Tenn. Code Ann. Sections 57-2-103(c) and (d).
At its satellite facilities, the winery may
In addition to these taxes, a 15% Tennessee conduct any business that is authorized at the
tax is also levied on these establishments on licensed winery, except for the manufacturing
the gross sales of all alcoholic beverages and and bottling of wine. At its satellite facilities, a
wine for consumption on the premises. farm wine producer may conduct any
business that is authorized at the premises of
Commercial Airlines, Paddlewheel the farm wine producer.
Steamboats, and Passenger Trains
Any licensed winery or any farm wine
In lieu of the taxes listed above, commercial
producer shall obtain a satellite permit for
airlines, paddlewheel steamboats, and
each satellite facility utilized by the winery or
passenger trains will pay an annual licensing
farm wine producer from the ABC in order to:
fee of $1250. In addition, these entities must
pay Tennessee tax on alcoholic beverages
+ Serve samples with or without charge;
brought into this state on which Tennessee
+ Sell wine for consumption on or off
tax has not been paid. Their tax liability is
the permitted premises; and
determined by a two-fold apportionment
+ Sell any other products under
computation. First, the entity must multiply
subsections (h) and (o).
the quantity of each type of alcoholic
beverage purchased within its operating
A satellite permit issued to a winery or farm
system by the ratio of its revenue passenger
wine producer shall only be available upon
miles in Tennessee to the total revenue
the payment of a one-time application fee to
passenger miles within its system. Next, the
the ABC of $300 per satellite location and
entity must multiply the respective results
upon the payment of an annual license fee to
obtained in this computation by $1.21 per
the ABC of $150.
gallon of wine and $4.40 per gallon of spirits
apportioned to Tennessee.
15TENNESSEE TAXES ON ALCOHOLIC BEVERAGES AND BEER
Sales Of Alcohol For Consumption On The
Premises (Liquor by the Drink) (continued)
Effective May 24, 2015, except as provided
Any licensed winery or farm wine producer below, any sale of wine authorized for
that has obtained a satellite permit and elects consumption on the premises at the winery or
to charge consumers for samples may only on the premises of the farm wine producer
sell such samples that are manufactured by shall be subject to taxation under Tenn. Code
the winery or farm wine producer. Any wine Ann. Section 57-4-301(c) in addition to any
provided at the satellite facility for sales, sales tax which is due. The taxes shall be paid
whether for tastings, for consumption on the and collected in the manner prescribed by
premises, and for consumption off the Tenn. Code Ann. Section 57-4-301 and the
premises, shall be obtained from a wholesaler appropriate rules of the Department of
licensed pursuant to Tenn. Code Ann. Section Revenue.
57-3-203.
Nothing in this section authorizes the
A wholesaler of the winery or farm wine collection of taxes pursuant to Tenn. Code
producer's products may permit a winery or Ann. Section 57-4-301(c) for the sale of wine
farm wine producer to deliver for sale as samples for tasting, with or without charge,
products which are sold on the premises of for consumption on the premises; or at retail
the winery, the farm wine producer, or the in sealed containers for consumption on the
satellite facility; provided, that the wholesaler premises, but not for consumption in the
permitting such direct shipment shall include bonded areas. [Tenn. Code Ann Section 57-3-
the amounts delivered in its inventory, report 207(t) as amended by Public Chapter 270, Acts
depletions for purposes of tax collection, and of 2015]
be responsible for the payment of taxes of
such depletions. Restrictions on the Disposition of Alcoholic
Beverages [Rule 1320-4-2-.04]
Any licensed winery or farm wine producer
may qualify for and hold a license as a No licensee may make any disposition of
restaurant or limited service restaurant; liquor or wine other than through sales for
provided, that notwithstanding restrictions or consumption on the premises.
prohibitions on such licensees, a restaurant or
limited service restaurant may sell for off- + A license holder may also suffer a loss of
premises consumption, wine manufactured inventory through theft, breakage, or
pursuant to this section at such location or at acts of nature. If this happens, the
any other licensed restaurant or limited licensee can be permitted to reduce
service restaurant that is owned by the same inventory by the amount of beverage
person. lost by supplying proper proof of the
loss to the Department, and thereby
Notwithstanding any law, rule, or regulation eliminate the tax liability for the lost
to the contrary, any licensed winery or farm beverages.
wine producer may serve wine manufactured + Theft: As soon as feasible after the theft,
by the winery or the farm wine producer for provide the Department with proof that
consumption on the premises of the winery or the theft was reported to the proper law
farm wine producer. enforcement agency and that the
insurer of the goods has paid for the
loss. Upon receipt of the proof, the
16TENNESSEE TAXES ON ALCOHOLIC BEVERAGES AND BEER
Sales Of Alcohol For Consumption On The
Premises (Liquor By The Drink) (continued)
for sale, and show the regular sales price of
Department will issue the licensee a each drink listed, including the applicable
certificate, a copy of which must be sales tax and alcohol beverage tax. When
retained in the licensee’s records for 3 drinks are sold at other than the regular sales
years as authorization for the inventory price, as during happy hour, the schedule
reduction. shall reflect the event or activity, the number
+ Breakage or acts of nature: As soon as of hours per day and days per week, and the
feasible after the loss occurs, obtain the special price at which the drinks are sold.
assistance of an agent of the
Department to observe the loss and These schedules must be provided at the time
furnish a certificate of loss. The of application and must be updated when any
certificate must state the quantity and change is made in the information contained
brand of liquor on which the federal on the schedule.
strip stamp remains intact, and the
quantity and brand of wine, on which Returns and Payment
the crown, cap, seal, or cork remain [Tenn. Code Ann. Section 57-4-302]
intact and unbroken.
+ In instances when the container is The Commissioner of Revenue is the
unbroken but the contents are collecting authority for the state taxes listed
considered unsalable by the Pure Food here, and may promulgate rules and
and Drug Administration or other regulations to implement full collection. The
appropriate authority, the licensee can tax will be collected from the consumer and
be allowed the inventory reduction if the will be remitted by the retailer.
contents are destroyed by or in the
presence of a Department agent and so The tax is due monthly, on the first day of the
certified. A copy of either certification following month. On or before the 15th day of
must be retained for 3 years as each month, each licensee will send the
documentation of the reduction. Department of Revenue returns showing the
gross sales of all sales taxable under this tax
Wine or Spirits Used in Food Preparation during the preceding month. A separate
return must be filed for each established
Wine or distilled spirits to be used in the place of business. The amount of tax due will
preparation of food will be stored separately be remitted at the same time.
from those sold by the drink for consumption
on the premises. They must be used Failure to remit the tax by this date will cause
exclusively in the preparation of food. If any it to be delinquent.
portion of the contents of a bottle is sold by
the drink for consumption on the premises, The Commissioner may, at the written
the entire contents of the bottle will be taxed. request of the licensee, authorize a taxpayer
to file on an accounting period other than
Reports to the Commissioner monthly. In this case, the licensee will file the
[Rule 1320-4-2-.05] return on or before the 15th day of the month
following the end of the reporting period. All
Each applicant will provide the Commissioner
other reporting requirements remain the
of Revenue, on prescribed forms, price
same.
schedules of all alcoholic beverages offered
17TENNESSEE TAXES ON ALCOHOLIC BEVERAGES AND BEER
Sales Of Alcohol For Consumption On The
Premises (Liquor By The Drink) (continued)
Records
Extension [Rule 1320-4-2-.06]
The Commissioner may, for good cause, grant Every person licensed for sales for
an extension of time, not to exceed 30 days, consumption on the premises is required to
for a licensee to file the return and pay the tax properly report and pay the applicable tax on
due. Requests for extension must be made in sales. To do so, records must be maintained
writing, state why the extension is needed, be that will provide a daily record of sales clearly
signed by the licensee, and be made prior to distinguishing between regular sales and
the due date of the tax return and tax. [Tenn. happy hour or special price sales, and all
Code Ann. Section 57-4-304(a)] purchases of alcoholic beverages
distinguishing between alcoholic beverages
Failure to File Timely Returns used in cooking and for drinks. These records
must be maintained for 4 years and must
When any taxpayer fails to file a timely return include:
or is delinquent in payment of tax for the
third time in any one-year licensing period, + A monthly inventory by brand of the
the Commissioner may recommend to the value of alcoholic beverages on hand
Alcoholic Beverage Commission that the as of the last day of each month.
license of that taxpayer be revoked or + A daily record of all sales. Entries for
suspended. It is a misdemeanor for any sales of alcoholic beverages must not
licensee to continue in business after be commingled with sales of food,
revocation or suspension of the license. Each beer, or other items. Entries on
day in business constitutes a separate documents evidencing sales of
violation. [Tenn. Code Ann. Section 57-4- alcoholic beverages should be made
304(b)] either on a separate document or on
the bottom or reverse of any
If a licensee becomes delinquent in the document showing sales of other
payment of the tax, the commissioner may items. If cash registers are used, tapes
notify, by registered mail, any person, must be keyed separately for sales of
including the Alcoholic Beverage Commission, alcoholic beverages and sales of beer,
having in their possession or control any food, or other items.
credits or other personal property belonging + Summary totals will not be accepted
to the delinquent licensee, or owing any debts unless supported by the itemized tape
to the licensee at the time of the delinquency. used to arrive at such totals.
No one so notified may make any disposition + Receipts derived from the sales of
of those debts or properties without the alcoholic beverages sold at other than
approval of the Commissioner, or until 30 regular prices, as posted with the
days elapse from the receipt of the notice. Department, on the price schedule
Any person receiving such notice must advise (happy hour sales, etc.) must be
the Alcoholic Beverage Commission of such clearly recorded on cash register
property, credits, or debts within 5 days. receipt tapes and/or guest checks
[Tenn. Code Ann. Section 57-4-305] showing the total sales during a
particular period or activity. Summary
totals and/or grand totals of such
tapes will not be accepted unless
18TENNESSEE TAXES ON ALCOHOLIC BEVERAGES AND BEER
Sales Of Alcohol For Consumption On The
Premises (Liquor By The Drink) (continued)
surrendered to the Alcoholic Beverage
supported by the itemized tape used Commission. [Tenn. Code Ann. Section 57-4-
to arrive at the total. 303]
+ A record of all alcoholic beverages
purchased including all invoices, Any person who, upon sale or transfer of the
delivery tickets, bills of lading, and business, allows or permits the new owner or
copies of purchase orders. The operator to remit tax, make wholesale
purchase dates will be considered to purchases, or conduct business in any
be the invoice dates. manner using the seller’s or transferor’s
+ A perpetual inventory record of all alcoholic beverage license or tax registration
alcohol or wine used in cooking. will be jointly and severally liable with the new
Cooking alcohol and wine must be owner or operator for any unpaid taxes
stored separately from alcoholic accrued during the period of illegal operation.
beverages, used exclusively for Any person that fails to provide the required
cooking purposes, and accounted for notice to the Department of Revenue, with the
as a food item. result that the new owner continues to
operate under the seller’s or transferor’s
Transfer of Business Ownership alcoholic beverage license, will be presumed
[Rule 1320-4-2-.08] to have allowed the illegal operation to occur.
Any person who purchases or obtains
ownership of a business engaged in making
sales of alcoholic beverages for consumption
on the premises will not make any sales of
alcoholic beverages prior to receiving a
license from the Alcoholic Beverage
Commission and registering for sales and
alcoholic beverage taxes with the Department
of Revenue. Any person making sales before
accomplishing these actions will be held liable
for the tax on those sales, and will be
operating illegally under state law.
Any person who sells, transfers, or otherwise
terminates ownership in a business engaged
in sales of alcoholic beverages for
consumption on the premises must provide
notice of the sale, transfer, or termination to
the Department of Revenue within 15 days
of the effective date of the sale, transfer, or
termination. “Notice” means direct written
notice to the Department as part of the final
alcoholic beverage return and final sales tax
return of the business. The business’s
alcoholic beverage license must also be
19TENNESSEE TAXES ON ALCOHOLIC BEVERAGES AND BEER
Mixing Bar Tax
[Tenn. Code Ann. Section 67-4-410]
Returns and Payment
Any person selling mixed drinks and/or setups
for mixed drinks in any location is liable for a The mixing bar tax is due monthly and must
gross receipts privilege tax on sales of those be remitted to the Department of Revenue
items. The tax rate is 15% of gross sales. not later than the 20th day of the month
following any month in which the taxpayer
The term “mixed drinks and/or setups for has gross receipts from any sales of mixed
mixed drinks” includes any sales of beverages drinks or setups. The tax is due from persons
containing any alcoholic content, except for making these sales even if the sales were not
beer, and includes sales of water, soft drinks, made legally under the pertinent county or
ice, or any item capable of being used to municipal code respective to the location of
prepare a mixed drink at a place of business. the sale.
It also includes the sales of setups for mixed
drinks to be consumed by persons supplying Records
alcoholic beverages from their own container
(for example: bring-your-own-bottle) on the Persons making sales and remitting the tax
premises of any business holding a license to will maintain pertinent records, as required by
dispense alcoholic beverages for consumption state law, for audit review; these records will
on the premises. include records of all purchases and gross
receipts from the sales of bottled beverages,
This tax is applicable to any sales of mixed mixed drinks, and setups.
drinks or setups, as defined above, regardless
whether the drinks or setups are consumed
on the premises of the business or off the
premises. It also applies to any country club;
nightclub; private clubs such as social, dinner,
athletic, or sporting clubs; and fraternal
societies, orders, or associations making sales
of these items.
Exceptions
This tax does not apply to sales of mixed
drinks taxed under Tenn. Code Ann. Section
57-4-301 (liquor-by-the-drink tax) and sales by
liquor wholesalers licensed under Tenn. Code
Ann. Section 57-3-203. It also does not apply
to sales of setups made by cafes, cafeterias,
or restaurants where their sales are incidental
to their primary business, selling prepared
meals, and where no bar or separate facility is
maintained for the purpose of selling mixed
drinks or setups.
20TENNESSEE TAXES ON ALCOHOLIC BEVERAGES AND BEER
Brand Registration
[Tenn. Code Ann. Section 57-3-301]
different brands of sparkling grape
“Brand” Defined wine.
+ The major category brands of distilled
Each and every distilled spirits or wine
spirits are neutral spirits or alcohol,
product bearing a distinct “brand name” or
whiskey, gin, brandy, blended applejack,
“trade name”, as those terms are defined and
rum, tequila, cordials and liqueurs,
used in the regulations put into effect by the
flavored distilled spirits, imitations,
Federal Bureau of Alcohol, Tobacco, and
geographical designations, and products
Firearms (ATF), concerning labeling of wines
without geographical designations but
and distilled spirits, are considered a separate
distinctive of a particular place. Further,
brand for tax purposes in Tennessee.
brands of whiskey are bourbon whiskey,
whiskey distilled from bourbon, light
Within the group of wine or distilled spirits
whiskey, blended whiskey, blended
products bottled, manufactured, distilled,
straight whiskey, spirit whiskey, scotch
rectified, imported, or marketed under a
whiskey, Irish whiskey, and Canadian
particular “brand name” or “trade name” as
whiskey.
previously defined, products that fall within
separate classes or types, as defined in the The Measure of the Tax
standards of identity for the several classes [Tenn. Code Ann. Section 57-3-301(b)]
and types of wine and distilled spirits put into
effect by the ATF, will also be considered Every manufacturer or importer distributing
separate brands for Tennessee tax purposes. brands of alcoholic beverages in Tennessee
Wine or distilled spirit products that differ must properly register each brand
only in the amount of alcohol they contain distributed by them and pay the proper
shall not be considered as separate brands. amount of brand registration privilege tax to
the Department of Revenue. The privilege tax
“Brand” is also defined as the name, year is from June 1 through May 31 each
trademark, or trade name of the product, as year. All documents must be filed, and the tax
indicated on the certificate of label approval paid, by May 1 each year; the tax is delinquent
as registered with the alcohol and tobacco tax after May 31.
and trade bureau of the United States
Department of Treasury, or, if no certificate of The tax is based on the number of cases of
label approval is required, then the name, each brand sold during the previous 12-
trademark, or trade name of the product. month period. If a particular brand was not
[Tenn. Code Ann. Section 67-5-301(a)] sold for the entire 12-month period, the tax
will be based on the average monthly sales of
Examples are given below. This is not an all- that brand times 12. Tax is due in the
inclusive listing of the many brands defined following amounts:
under the law.
+ For each brand of distilled spirits for
+ Grape wine, sparkling grape wine, and which actual wholesale sales were 50
carbonated grape wine are considered cases or more - $250 per year.
separate brands of grape wine. Further, + For each brand of distilled spirits for
champagne, champagne style, and which actual wholesale sales were less
crackling wine are all considered than 50 cases - $100 per year.
21TENNESSEE TAXES ON ALCOHOLIC BEVERAGES AND BEER
Brand Registration (continued)
notify the Alcoholic Beverage Commission
+ For each brand of wine for which actual that the person’s permit should be suspended
wholesale sales were 250 cases or more pending proper registration. If proper
- is $250 per year. registration does not ensue within 30 days,
+ For each brand of wine for which actual any unregistered or improperly registered
wholesale sales were less than 250 beverages will be seized and sold by the
cases - no tax is due. Department.
Introduction of a New Brand In addition to paying the applicable tax each
[Tenn. Code Ann. Section 57-3-301(e)] year, each manufacturer or distributor will
file, with the Department, copies of all written
No manufacturer, importer, or representative
contract or renewal agreements with
can introduce any brand of alcoholic beverage
Tennessee wholesalers making sales of their
into Tennessee until the tax has been paid to
brands in this state, copies of the labels of
the Department of Revenue. Likewise, no
each brand of alcoholic beverages distributed
wholesaler can give an order for, receive,
in this state, copies of the approved ATF Form
accept, or offer for sale any brand of alcohol
1649, and any other reports or forms required
beverages until the brand has been registered
by the Commissioner of Revenue. Copies of
and the annual tax paid to the Department.
labels and forms need not be filed every year,
but must be filed initially and when any label
Any manufacturer or importer that wishes to
change or filing addition is made.
introduce a new brand of alcoholic beverage
in Tennessee, one that has not been Transfer of Brands
distributed previously in this state, will first [Rule 1320-4-6-.07]
register the brand and pay the tax of $250 per
brand being registered (there is no tax on No manufacturer or importer will be
wine upon initial registration). The $250 tax permitted to transfer a brand from one
payment will be prorated on the basis of 1/12 wholesale distributor to another or terminate
of the tax for each month remaining in the a contract without written permission of the
privilege tax year in which the brand is Commissioner. Request for approval of
registered. Any manufacturer or importer transfer or termination must be submitted in
paying a prorated amount upon initial writing with a copy submitted simultaneously
registration will pay, for the first subsequent to the wholesale distributor in whose name
full privilege tax year, an amount based on the brand is currently registered.
the average monthly number of cases sold at
wholesale in Tennessee during the initial Upon receipt of the request to terminate, the
partial year times 12. Department will notify both the requesting
party and the wholesale distributor that they
Failure to Register a New Brand have 30 days to resolve any deficiency. There
[Rule 1320-4-6-.07] will be no change in the brand during those
30 days. If, at the end of the 30-day period,
If a manufacturer or distributor fails to
the requesting party wishes to continue, it
register or improperly registers a new brand,
must notify the Department in writing of that
the Department will notify that person to
intention. If a request to proceed is received,
cease distribution in Tennessee until proper
the Commissioner will make a determination
registration is made. The Department will also
22TENNESSEE TAXES ON ALCOHOLIC BEVERAGES AND BEER
Brand Registration (continued)
+ The wholesaler’s failure to comply
as to whether there is good cause to transfer with any federal, state, or local law or
the brand, and notify the parties when the regulation material to the operation of
decision is reached. The parties then have 10 the distributorship that could impair
days to request a hearing before the decision the wholesaler’s future performance.
becomes final. If a hearing is requested, the
decision will not take effect unless the hearing High Alcohol Content Beer
officer approves the transfer or termination.
Effective May 1, 2014, all brands of beer with
Rulings of good cause could be made if any of an alcohol content of greater than 5% by
these situations were found to exist: weight and each brand of high alcohol
content beer sold in Tennessee must be
+ The wholesaler’s failure to registered and a $100 fee must be paid per
substantially comply with the brand each year. [Tenn. Code Ann. Section
requirements of the manufacturer or 57-3-301(b)]
distributor when those requirements
were neither discriminatory when
compared with requirements imposed
on other wholesalers nor in violation
of any law or regulation.
+ The wholesaler’s failure to act in good
faith and in a commercially
reasonable manner in fulfilling the
contract.
+ Voluntary abandonment of the
contract.
+ The wholesaler’s conviction in court of
an offense punishable by
imprisonment of more than 1 year.
+ Any act by the wholesaler that
substantially impairs the
manufacturer or importer’s name or
trademark.
+ Institution of insolvency or bankruptcy
proceedings against the wholesaler or
the wholesaler’s assignment for the
benefit of creditors.
+ The wholesaler’s failure to pay the
manufacturer or distributor within 30
days of notification of any past due
monies owed that relate to the
contract.
23TENNESSEE TAXES ON ALCOHOLIC BEVERAGES AND BEER
Wholesale Gallonage Tax
Liability Exceptions
[Tenn. Code Ann. Section 57-3-303(a)]
The tax on the sale or distribution of wine
Any wholesaler that imports alcoholic does not apply to the sale, gift, or distribution
beverages into Tennessee or receives of any wine manufactured, sold, given away,
alcoholic beverages manufactured in or distributed and used solely as sacramental
Tennessee for eventual retail sale, in any size wine. [Tenn. Code Ann. Section 57-3-302]
retail container, or in-state distribution by sale
or gift will pay a tax on each gallon or portion The tax on intoxicating liquor or alcoholic
of a gallon distributed or sold. beverages with an alcohol content of more
than 5% will not be applicable to those
Any manufacturer or rectifier licensed to beverages sold for consumption within the
manufacture alcoholic beverages in geographical boundaries of a fort, base, camp,
Tennessee will pay the tax directly to the or post of the armed forces of the United
Department of Revenue on the amount of its States or to post exchanges, ship
own product that is needed for its own use, service stores, commissaries or messes
not to exceed 100 cases per month. Out-of- operated by the United States armed forces.
state shipments of alcoholic beverages from This exemption will be applied in the form of a
Tennessee manufacturers or distillers, made credit for taxes paid on these beverages. The
to persons holding both federal and state credit shall be allowed only upon application
licenses to sell alcoholic beverages, will not be by the wholesaler or distillery making
subject to the tax. [Tenn. Code Ann. Section deliveries of the intoxicating beverages. In
57-3-303] addition to the application for credit, the
requestor will need to furnish a copy of the
Any person possessing more than five gallons invoice with the signature of a person
of alcoholic beverages will have the burden of having proper authority over the Post
proof that all applicable taxes have been paid Exchange, ship service store, commissary, or
on those beverages. [Tenn. Code Ann. Section mess certifying that the alcoholic beverages
57-3-304] were sold and delivered to the military entity.
[Tenn. Code Ann. Section 57-3-303(k)]
This is a state tax only. No county or
municipality or other taxing district has the Payment
power to levy a like tax.
The wholesale gallonage tax is payable on the
[Tenn. Code Ann. Section 57-3-305]
first day of the month following the month
The Measure of the Tax when the taxable transactions occur. It will be
delinquent if not paid on or before the 15th
The tax on the sale or distribution of wine is day of that following month.
$.31966 per liter or $1.21 per gallon.
The tax remitted on the return will be based
The tax on the sale or distribution of spirits is on the adjusted gross sales for the preceding
$1.16237 per liter or $4.40 per gallon. calendar month. “Adjusted gross sales” means
the total disposition of all alcoholic beverages
except:
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