New Liquor Rules for Nonprofit Events and Fundraisers in Tennessee

By - October 28, 2014 | Alcoholic Beverage Law | Email Will Cheek

The Tennessee Alcoholic Beverage Commission has issued new rules for nonprofit liquor licenses, known as Special Occasion Licenses.  We see the new TABC rules as game changers, particularly for bigger events.

Previously, nonprofits could pull a Special Occasion License from the ABC for an event and just receive a check.  The nonprofit was merely the beneficiary of the event.

No more.

The Tennessee ABC now requires that the nonprofit actively provide liquor service: from picking up or receiving liquor inventory to paying for servers or providing volunteers to serve alcohol.

George Thorogood’s classic tune seems relevant:

One bourbon, one scotch, one beer
Well I ain’t seen my baby since I don’t know when,
I’ve been drinking bourbon, whiskey, scotch and gin
Gonna get high man, I’m gonna get loose,
Need me a triple shot of that juice
Gonna get drunk, don’t you have no fear
I want one bourbon, one scotch and one beer
One bourbon, one scotch, one beer

Special occasion licenses are critical for many popular events.  A nonprofit with a special occasion license can receive donated alcohol.  Under another recent Tennessee ABC rule, regular permit holders cannot receive free alcohol.  Caterers, for example, cannot serve donated liquor at a nonprofit event.

The ABC has compiled a helpful pdf of relevant laws special occasion license laws and regs (01144156).

Special occasion license holders also do not have to pay sales or LBD taxes, which typically add up to 24.25%.

Special occasion licenses are regularly used to permit alcohol sales at outdoor events that do not normally qualify for liquor sales.

Keep in mind that these rules only apply to wine and spirits.  Beer is poured under completely different laws.

As we see things, perhaps the biggest impact of the new Tennessee ABC rule is that the nonprofit must pay for servers or provide volunteers to serve alcohol.  For large events, staffing bars is a huge responsibility.

So far, the Tennessee ABC seems to allow the event promoter to pay the nonprofit in advance for staffing costs.

We advise nonprofits to require promoters to name the nonprofit as an additional insured and provide proof of insurance before the event.  This is a small expense for the promoter that is priceless for the nonprofit.  If a guest served by the nonprofit at the event causes a drunk driving accident or other liquor liability, the insurance will cover the cost of legal fees for the nonprofit, which can easily cost tens of thousands of dollars, as well as any court judgment.

If the Tennessee ABC cracks down further, the rules could become unworkable for many special events.  For example, so far, the Tennessee ABC seems to allow a promoter to sell tickets and pay for event expenses like entertainment, staging, security, trash and portapotties.

Under the current rules, a promoter bears the risk that an event makes or loses money.  The nonprofit gets a check regardless of whether the event makes money.

The Tennessee ABC could require a nonprofit to be responsible for all aspects of an event, including being responsible for losses.  This would be a huge game changer.

Tennessee Loses Huge Asset at Revenue

By - October 23, 2014 | Alcoholic Beverage Law | Email Will Cheek

Today, October 23, 2014, we learned that liquor-by-the-drink tax ace Rondal John is moving onto greener pastures.  Anyone that licenses in Tennessee knows how critical Rondal has been for liquor licensing.

As of November 17, 2014, Rondal will no longer be an employee of Taxpayer Services LBD Unit. Rondal is going to become a computer programmer for Tennessee.

We wish Rondal well and thank him for bringing sanity to the often chaotic process for tax clearance and bond approvals for restaurants, bars and other liquor license holders.  Rondal eagerly fixed seemingly impossible tax issues on a regular basis.

Rondal brings to mind Randy Newman’s 1995 hit:

You’ve got troubles, well I’ve got ’em too
There isn’t anything I wouldn’t do for you
We stick together and we see it through
You’ve got a friend in me
You’ve got a friend in me

Look for Rondal at Smoking’ Thighs, one of his favorite food purveyors.  Best wishes Rondal.

Vote for Wine in Tennessee Groceries Meets Attack Ads in Maryville and Alcoa

By - October 21, 2014 | Alcoholic Beverage Law | Email Will Cheek

For Christians, wine is central to the Eucharist, a sacred rite from the Last Supper, where Jesus famously shared bread and wine with his disciples.

Wine in Grocery Stores, which we affectionately call WIGS, is shaping up to be the big issue on the ballot for fall elections.  Although the Tennessee legislature legalized WIGS, each city or county must hold an election to vote for WIGS before groceries can sell wine.  About 80 cities and counties have WIGS on the ballot this fall, as we blogged here.

Many political pundits predicted that WIGS could face opposition from conservative religious groups, particularly in small towns in more rural areas.

An anti-WIGS ad campaign in Maryville and Alcoa, reportedly funded by retail liquor stores, comes as a surprise even for the most jaded of liquor-industry insiders.  The Daily News has the scoop.

The anti-WIGS billboard ads feature fear-mongering over the sale of fortified wines in convenience stores.  The ads ignore the fact that almost every convenience store is not eligible for a WIGS license.  Mapco, Pilot and other Tennessee convenience stores do not sell enough grocery food items to qualify for wine sales under WIGS.

Conjures up Lilac Wine by Nina Simone:

Lilac wine is sweet and heady, like my love
Lilac wine, I feel unsteady, like my love

Local option liquor elections like WIGS in Tennessee have involved colorful election tactics.  Nashville’s 1967 election to legalize liquor-by-the-drink led to a seemingly unlikely  alliance between bootleggers and Baptists.  Liquor opponents bombed the mailbox of a prominent proponent of liquor.

Although we hope WIGS does not inspire violence, we expect the political battles over WIGS to heat up as the November 4 election approaches.

Jennifer Maxey Joins Bone McAllester Tennessee Liquor Team

By - October 13, 2014 | Alcoholic Beverage Law | Email Will Cheek

Jennifer Maxey has a national reputation among liquor licensing professionals. Jennifer’s skill set made her a perfect hire for Tennessee’s leading liquor licensing firm, Bone McAllester Norton.

We are so glad to have Jennifer on our team.

Jennifer’s licensing expertise is widely recognized in the alcoholic beverage industry.  Less known are her culinary skills, skydiving experience and NFL Colt’s obsession.

Jennifer is admittedly afraid of heights.  Nevertheless (a word only used by lawyers), a couple of months ago, Jennifer embraced her fear and jumped out of an airplane at 10,000 feet.

Reminds us of Steve Miller Band’s classic:

I want to fly like an eagle
To the sea
Fly like an eagle
Let my spirit carry me

 

Jennifer cooks up a mean Buffalo Chicken Slider. Watch out BW3.  Jennifer’s culinary obsession is chicken lo mein.  Her version of the classic Chinese dish is legendary.

 

FDA Requires Renewal of Brewery and Distillery Registrations by 2014 Year End

By - October 03, 2014 | Alcoholic Beverage Law | Email Will Cheek

As part of the response to 9.11, the U.S requires all food manufacturers to register with the federal Food and Drug Administration. The intent was to make it easier for the U.S. to respond to a terrorist attack through food – for example, poisoning beer at a Bud brewery.

This week’s TTB newsletter has an alert about new FDA registrations due by the end of the year.  The details about the renewal are cryptic, to say the least.  But we know that breweries and distilleries are subject to the FDA registration requirements.

For some reason, punk band Green Day’s song “Warning” comes to mind:

Is it the cop, or am I the one that’s really dangerous?
Sanitation, expiration date, question everything.
Or shut up and be a victim of authority

The unfortunate reality is that the Borg were correct when declaring that “resistance is futile.”  Our advice is to suck it up and comply.  At least there is no charge.