Last Call

TTB Establishes Waiver Process for Late Excise Tax Filings for Gatlinburg and Pigeon Forge Distilleries Affected by Fires

By - December 09, 2016 | Alcoholic Beverage Law | Email Will Cheek

A small but important silver lining for moonshiners in Sevier County.  After the tragic fire, we asked the TTB to consider easing the deadlines on reporting and paying excise taxes – to give impacted distilleries time to recover.  We blogged about it here.

The announcement from TTB is great news and here is the e-mail:

The Alcohol and Tobacco Tax and Trade Bureau (TTB) recognizes that the devastation caused by wildfires in and around Gatlinburg, Tennessee, may have affected your operations. As a result, you may not be able to timely file returns or timely pay or deposit the excise taxes administered by TTB, as required by the Internal Revenue Code. TTB will consider waiving late filing, payment, or deposit penalties on a case-by case basis. Waivers will be approved based on the statutory standard of reasonable cause and a lack of willful neglect.

To qualify for such a waiver, you must:

1) Demonstrate, to the satisfaction of the appropriate TTB officer, that the wildfires or related events directly affected your ability to timely file tax returns and/or pay or deposit excise taxes; and

2) Contact the TTB National Revenue Center at

550 Main St, Ste 8002
Cincinnati, OH 45202-5215
Toll free: 1-877-882-3277
Direct: (513) 684-3334
Email: ttbquestions@ttb.gov

One of Willa’s favorites by Alan Jackson comes to mind:

Pop a top again
I think I’ll have another round
Set ’em up my friend
Then I’ll be gone and you can let some other fool sit down.

New Rules for Tennessee Wholesalers & Restaurants and Bars

By - December 08, 2016 | Alcoholic Beverage Law | Email Will Cheek

The new leadership at the Tennessee ABC has been issuing informal guidelines on a variety of subjects.  We love the informal rules and hope they keep coming.

At the links are FAQS for wholesalers and liquor-by-the-drink, aka restaurants, bars, hotels, venues and other on-premise license holders.

final-wholesaler-faq-12-07-2016

final-lbd-faq-12-07-2016

Made our buddy Willa think about Charlie Daniel’s hit Drinkin’ My Baby Goodbye:

Well I’m a
Sitting on a bar stool
Acting like a dern fool

Gatlinburg Fire Impacts Tennessee Distilleries and Restaurants

By - December 04, 2016 | Alcoholic Beverage Law | Email Will Cheek

Reliable industry sources indicate that miraculously, all of the numerous distilleries in Sevier County, Tennessee escaped wildfires that ravished Gatlinburg, Pigeon Forge and surrounding areas.  The fires on the strip of Gatlinburg came perilously close.  Here is a photo from the security cameras at one distillery on the strip:

Fire off the Gatlinburg Pakway
Fire off the Gatlinburg Parkway

At this time, we understand that a few restaurants were mostly likely destroyed by the fires, but we have no specific information.  Keep in mind that civilians have not been allowed back into Gatlinburg since the fires.

 

Although distillery facilities escaped direct impact from the fires, we expect that there may be smoke damage, difficulty with retrieving records and certainly time-related pressure for filing returns.  We have reached out to our contacts at TTB and have requested that TTB consider a procedure for late filing and payment of taxes for impacted distilleries.  You can learn more about the TTB claims process at this link:

https://www.ttb.gov/public_info/disaster_claims_packet.shtml

Rob Pinson and Will Cheek have agreed to provide complimentary legal services to assist impacted distilleries with immediate legal needs resulting from the fires.  If you have questions concerning TTB, ABC or Tennessee Department of Revenue issues from the fire, please reach out to us at rpinson@bonelaw.com or will@willcheek.com.

Although distilleries escaped the worst of the fires, several distillery employees lost their homes and nearly everything they own.  Our thoughts go out to these folks and we encourage everyone to consider making a donation to help these industry members.  We know of the following assistance funds that have already been set up.

Ole Smoky:

Go Fund Me https://www.gofundme.com/displaced-families-of-ole-smoky

 

Sugarlands:

1)         Monetary donations can be mailed to:

CNB, 2661 Parkway, Pigeon Forge, TN 37865

Sugarlands Employee Emergency Assistance Fund – Account Number 4036124

2)         Gift card donations can be mailed to:

Sugarlands Employee Emergency Assistance, C/O Sugarlands Distilling Company,

P.O. Box 1517, Pigeon Forge, TN 37865

If any distillery has a fund to add to this list, please e-mail us at will@willcheek.com.

We wish the best to our friends during this tragic time.

Shot Gun Marriage: Tennessee Department of Revenue Releases Guide for Terminating Your Liquor Wholesaler

By - November 07, 2015 | Alcoholic Beverage Law | Email Will Cheek

Shot gun marriage pretty much sums it up.  For distilleries, wineries and breweries, choosing a wholesaler in Tennessee is like marrying your high school sweat heart.  She may look great when you are in high school, but as you grow older, you have to ask “Did I find the right partner for life.”

Unlike your high school sweat heart, divorce is not really an option for your Tennessee wholesaler.  Tennessee law protects wholesalers and makes terminating the relationship practically impossible.

The Tennessee Department of Revenue recently issued a guideline for terminating a wholesale contract.  Download a copy here Guide.

Wholesale termination reminds us of the J. Geils Band tune:

You love her but she loves him
And he loves somebody else you just can’t win
And so it goes till the day you die
This thing they call love it’s gonna make you cry
I’ve had the blues the reds and the pinks
One thing for sure
Love stinks yeah, yeah
(Love stinks)

In order to start the termination process, a manufacturer has to tell its wholesaler in writing that it wants to terminate the relationship and provide specific reasons why the wholesaler is inadequate. The wholesaler has 30 days to fix the problems.

This is not something any reasonable business person would do. Why tell someone you cannot divorce that you do not like them and tell them why?

We know of no manufacturer that has terminated a wholesaler contract in Tennessee. Although scuffles between manufacturers and wholesalers sometimes result in trading brands, between wholesalers, the brand termination process in Tennessee is heavily weighted in favor of the wholesaler.

How to Answer Question 15 About Infusing vs. Pre-Mixing Cocktails on the Tennessee Alcoholic Beverage Commission Renewal Application

By - November 04, 2015 | Alcoholic Beverage Law | Email Will Cheek

We are hearing from lots of folks that are confused about Tennessee ABC  infused cocktail policies.  The TABC has added a question to the liquor-by-the-drink application about infusing, which must be filled out by every license holder at renewal.

Question 15 asks: “Do you intend at any point during the next license year to produce, store, sell or offer for sale infusions as that term is defined in T.C.A. §57-4-108?”  The renewal application is here LBD Renewal.

Tennessee has special rules about infusions, which we blogged about here.  In our humble opinion, the Tennessee infusion law is not overly burdensome.  But the rules for what constitutes an infusion and the potential penalties for failing to comply create concern in the industry.

We blogged about the difference between pre-mixed cocktails and infusions and some common sense practices here.  Based on citations issued by agents, we strongly encourage that restaurants and bars follow our advice about pre-mixed cocktails.

We thank ABC Assistant Director Ginna Winfree for advocating for different treatment of pre-mixed cocktails and infusions.  Although the legal technicalities may make little sense to anyone other than lawyers, there is an important distinction.

Conjures up the classic Beastie Boys tune “Brass Monkey”

When it’s time to get ill I pour it on my face

Monkey tastes def when you pour it on ice

Come on y’all it’s time to get nice.”

We find that many licensing professionals think they serve infusions, when in fact they only serve pre-mixed cocktails.  Our advice for answering Question 15 for restaurants and bars that serve pre-mixed cocktails is to answer “no, see attached” and disclose on the attachment that the restaurant has pre-mixed cocktails.  We also advise labelling pre-mixed cocktails as we describe here.

Given TABC patterns of enforcement and significant penalties, erring on the side of disclosure is a good thing.

A Modest Goal: Parity for Distilleries under Tennessee Law

By - November 01, 2015 | Alcoholic Beverage Law | Email Will Cheek

We sense that many distillers want to see Tennessee law changed to give distillers similar rights to wineries and breweries.  We keep hearing the word “parity.”  It is not fair for breweries and wineries to have more privileges than distilleries under Tennessee law.

Many, including us, think there is a bias against laws governing spirits because of a long-held and incorrect presumption that whiskey is more dangerous than wine and beer.  Our college days taught us that you can get just as smashed on Miller Lite as on shots of Jose Cuervo.

Jack Daniels Master Distiller Jeff Arnett captured a key sentiment in this very memorable quote:

“There is no drink of moderation – only the practice of it.”

Another consideration is that laws governing manufacturing of spirits date from the 1930’s.  Beer and wine manufacturing laws are relatively new, and reflect more-modern sentiments that generally accept alcohol in contemporary society.

Reminds us of the classic Van Halen song “Take Your Whiskey Home”

Well, I think that you’re headed for a whole lot of trouble. 
If you take your whiskey… 
Well, that liquor in the nighttime leaves strange memories.

In our humble opinion, there is no reason for Tennessee state law to give wineries and breweries more rights than bestowed to distilleries.  For example, why can wineries and breweries have a restaurant; but not distilleries?  Why are distillery tasting rooms limited to small samples, without mixers and palate cleansers like crackers and cheese?

We encourage lawmakers to remember who butters the bread in Tennessee.  Distilleries generate huge tax revenue, jobs and tourism for the state.  Jack Daniels gives Tennessee world-wide recognition, more so than country music, Memphis blues or the Tennessee Waltz.  Jack is certainly a premier Tennessee product, taxpayer and employer.

Show whiskey some respect and give the industry parity.

Tennessee ABC Proposes New Rules for WIGS

By - October 21, 2015 | Alcoholic Beverage Law | Email Will Cheek

Wine in Grocery Stores becomes a reality for Tennessee on July1, 2016.  For consumers anxious to purchase wine at Kroger, Wal-Mart and Publix, the wait for July 2016 seems like an eternity.

We wonder how much Tom Petty makes on royalties from playing The Waiting is the Hardest Part at countless arenas and stadiums:

Baby, we know better than to try and pretend
No one coulda ever told me ’bout this
I said, yeah, yeah

The waiting is the hardest part

Savvy grocers and big box retailers are chomping at the bit to have local certificates of compliance, ABC licenses, training, manger permits, cashier permits and other logistics in place to be able to sell wine on day one of WIGS.  We believe that many wine drinkers will be elated to buy wine beginning July 1 at their favorite grocer.

We also think that grocers that fail to have all the permits in place to sell wine by July 1 could lose valuable customers.  WIGS sets up an opportunity to gain market share.

Although WIGS is a very detailed law, there are crucial practical issues that are not spelled out in WIGS.  We applaud the Tennessee ABC for proposing rules to help guide industry members looking to obtain wine licenses and legally market and sell wine.  The proposed regs are here WIGS Regs

We encourage industry members, particularly food stores, to review the proposed regs thoroughly, as there are a number of important requirements.  Perhaps the most significant proposal in the regs is specifying that certificates of compliance expire in 180 days.  The certificate of compliance is essentially city or county approval for obtaining a WIGS license.  Previously, certificates of compliance were valid for 2 years.

With grocers anxious to qualify for WIGS, we have heard that many stores are already obtaining certificates of compliance.  If the new ABC reg becomes a rule, the early birds will not get the worm.  Their certificates of compliance will expire before the ABC can approve wine in food store licenses.

The proposed 180 day rule does not specify when in the ABC application process that the certificate of compliance expires.  We suspect that the ABC will require that the certificate of compliance be valid as of the tine of issuance of the  licensee.

We encourage applicants to carefully plan timing of WIGS applications.  The process is fraught with traps.

Tennessee ABC Enforces Charitable Solicitation Laws for Nonprofit Liquor Licenses – New Rule Is a Huge Trap for Many Special Events

By - September 26, 2015 | Alcoholic Beverage Law | Email Will Cheek

Nonprofits have seen a number of changes in recent months with the requirements for special occasion liquor licenses, which is the main way charitable events are licensed and the only way that donated alcohol can be served on premises.  Although a surprise to many nonprofits, the rules are manageable, if the event knows of the new rules early enough.

A new rule we discovered this month involves compliance with charitable solicitation laws.  Although not terribly burdensome, complying with charitable solicitations takes time.

Calls to mind “Sun City” by Artists United Against Apartheid, a multi-celebrity benefit song featuring Steven van Zandt, Miles Davis, Peter Gabriel, Bono, Springsteen, Lou Reed, Herbie Hancock, Bob Dylan, Peter Garrett, Run DMC and Joey Ramone:

We’re rockers and rappers
United and strong
We’re here to talk about South Africa
We don’t like what’s going on

Many nonprofits learn of the new ABC requirements days before the event, which is not enough time to register.  Among the requirements is a bond, which normally takes several days to process.

With all the changes, we strongly encourage nonprofits to focus on Tennessee liquor licensing well in advance of the event.  We are seeing too many well-intentioned fundraisers scrambling to comply with the new liquor laws.

 

Tennessee Distillers Guild Website Goes Live

By - September 25, 2015 | Alcoholic Beverage Law | Email Will Cheek

We are huge fans of the Tennessee distilleries that are working together as the Tennessee Distillers Guild.  Fierce competition among distilleries has been set aside for the better good of promoting distilling in Tennessee.  Industry leaders Jack and George have joined forces with new distillers to support the Tennessee Distillers Guild.

Yesterday, the Tennessee Distillers Guild website went live.  Check it out here.

The Tennessee Distillers Guild could be a magnet for Millennial and other highly desirable tourism in Tennessee.  A Tennessee whiskey trail could be a huge draw.

Although Kentucky’s bourbon trail is well established, Tennessee’s whiskey trail has a marquee brand known world-wide.  Jack Daniels is one of the most-recognizable U.S. brands – like Coca-Cola.  Unlike most of the bourbon purveyors in Kentucky, most of the distilleries in Tennessee’s guild are truly small artisan businesses with fabulous stories to tell.

George Jones immortalized the famous illegal Tennessee moonshine tradition:

Well I asked my old pappy why he called his brew
White lightning ‘stead of mountain dew
I took a little sip and right away I knew
As my eyes bugged out and my face turned blue
Lightning started flashin’ and thunder started crashin’
Shhhoooh… white lightnin’

This summer, we expect many of the purveyors of moonshine to have aged Tennessee whiskey for tasting and sale.  The Tennessee Whiskey Trail will offer craft spirits that are unique to Tennessee and made in limited quantities that are available in very limited quantities.

Stay tuned for progress from our home-grown distilleries.

Metro Nashville Beer Board Shows Mercy for Sales to Minors

By - September 24, 2015 | Alcoholic Beverage Law | Email Will Cheek

For as long as we can remember, the Metro Nashville Beer Board has imposed an automatic formula for penalties for sales to minors.  First offense is a fine, second offense is a 14 day suspension, and third offense is a 30 day suspension.

It mattered not how hard you are trying to prevent sales to minors or how large is your venue.

The mathematical application of penalties calls to mind a classic School House Rock Song, Three is a Magic Number:

Every triangle has three corners,
Every triangle has three sides,
No more, no less.
You don’t have to guess.
When it’s three, you can see
It’s a magic number.

Last night, Wednesday September 23, 2015, the beer board offered a $2,500 fine to several restaurants charged with a second sale to minor.    Previously, a 14 day suspension was the only option.

As best we can understand the rationale, the Metro Nashville Beer Board will consider a fine for a second sale to minor if the restaurant or bar can demonstrate that it has policies and training in place to prevent sales to minors.

The Tennessee ABC used to follow a similar policy for sales to minors.  If you are doing a good job trying to prevent sales to minors, you got a fine instead of a suspension.

Any restaurant or bar owner knows that no matter how much you train and how good your carding procedures are, you are at the mercy of your servers.  A simple mistake by a server can lead to a disastrous suspension of your liquor license.

Although we agree that sales to minors is a huge issue for the industry, we applaud the Metro Nashville beer board for recognizing the efforts of law-abiding liquor license holders.