Alcoholic Beverage Law
We rarely hear business owners excited to pay more money to government. But many Tennessee restaurants, bars and venues are eagerly supporting pending legislation to allow the ABC to increase fines for sales to minors to $10,000.
You can read the entire bill here HB 935
Reliable sources on the Hill say that the bill will become law.
Tennessee is well-known in the nation for under 21 ID stings. The Tennessee ABC and local law enforcement have been quite successful citing liquor license holders for sales to minors.
Current law limits ABC fines to $1,500 for sales to minors. Understandably, the ABC has favored suspensions for a second sale to minor within 2 years. Many licensees have served 7 to 14 day suspensions for a second sale. Most of the time, an ABC suspension also leads to a beer board suspension.
Industry has been clamoring for allowing the ABC to increase the fine for a second sale to minor – instead of devastating suspensions.
Our good buddy Willa reminds us of the classic John Conlee tune:
The bills are all due
The babies need shoes
Stay tuned for updates about the 2017 legislation session.
We hear it all the time. A top of the charts question is how do I transfer the liquor license when I purchase a restaurant or bar in Tennessee?
Here is a simple guide.
1. Liquor licenses in Tennessee are not bought and sold. Unlike many states, liquor licenses and beer permits are issued to any qualified applicant in Tennessee. Licenses have no value.
2. When you buy a business that serves beer, wine and spirits, you have to obtain your own beer and liquor licenses. You can be looking at a prolonged interruption in service if you fail to apply and obtain your own beer and liquor licenses.
3. Make sure you understand local beer board practices. The rules vary widely from city to city. For example, in Nashville, it is best to apply at closing, or the beer inspector may visit and tell you to stop selling beer. Check with your local beer board before closing and make sure you know what you need to do to. Most importantly, do what you are told by your local beer board.
4. The Tennessee ABC will accept an interim management agreement that allows you to “use” the seller’s liquor license. The interim management agreement must have some magic language and we strongly advise that you file a copy of the agreement with the ABC at closing. Otherwise, you risk the ABC revoking the license, which means an interruption in service.
5. Make sure you complete all the steps to obtain your own beer permit and liquor license. Too often, we hear from well-intentioned purchasers that are facing an interruption in service because they do not obtain their own licenses.
Classic Hank Williams Jr. comes to mind:
Play me the songs about ramblin man
Put old Jim Beam in my hand
Cause you know I still love to get drunk
And hear country sounds
Just today, we heard from a restaurant that was “inspected” by agents looking for illegal immigrants and asking about proper documentation. Scary stuff. We understand that one or more Tennessee ABC agents lead the investigation.
Bone McAllester immigration expert Raquel Bellamy offers these Top 5 Immigration Tips for Employers.
Unauthorized immigration is a hot topic these days. Undocumented immigrants are roughly 5% of the U.S. civilian labor force, as reported by the Pew Research Center. We suspect that many restaurants, bars and hotels have a much higher percentage of illegals.
Some employees give employers fake documents. Other employers intentionally hire undocumented immigrants, to gain a competitive advantage by offering lower pay and fewer protections. In the most egregious scenarios, employers falsify records and participate in labor trafficking by recruiting and smuggling workers from abroad (a big no no!).
A recent federal immigration executive order deputizes state and local law enforcement authorities to act as ICE agents. Legally, TABC agents, local police and even beer board inspectors can now search your business for illegal or improperly documented immigrants.
Here are our top five immigration tips for employers:
1. Anticipate increased auditing of records to verify I-9 compliance. Locate and organize your records to avoid costly delays. You should have a completed I-9 for each employee.
2. Prepare for the inevitable by conducting an internal audit, which will help you identify any I-9 compliance issues.
3. Consult a competent employment attorney regarding any potential liability for violations of I-9 regulations.
4. Train front office staff (receptionists, hostesses, etc.) on how to respond to law enforcement officials who enter the premises to inquire about immigration violations. Know your rights to limit access of law enforcement officers.
5. Avoid discrimination based on national origin against potential employees. During the interview phase, limit your inquiry to whether the applicant is authorized to work in the United States and whether the applicant will require sponsorship to obtain work authorization. If an applicant or a current employee is confused about work authorization, you should encourage him/her to seek independent counsel.
6. I know I said 5, but who doesn’t love a bonus? Show compassion for workers who are experiencing personal trauma as a result of the changes in immigration enforcement priorities. Even U.S. citizens may experience a high level of anxiety over the potential impact to their family members and friends. Be mindful of negative interactions between employees. Some of my clients have reported workplace harassment. In one instance, a worker was blackmailed by a co-worker who threatened to call ICE. Employers should be aware of any workplace intimidation and maintain a policy against bullying. Again, regardless of your position on the debate, we are all less safe when pockets of our population are particularly vulnerable.
Ray Stevens controversial tune “Come to the U.S.A.” seems timely:
If you thinkin’ about illegal immigration
Be careful when you’re choosin’ the nation
‘Cause breakin’ the law in some countries is frowned upon.
In a rare bit of shameless self-promotion, we can help you make sure you are properly documented, in case agents come a knockin’. Feel free to e-mail us at email@example.com
Bone McAllester paralegal extraordinaire, Jennifer Maxey, tells us that the Tennessee Department of Revenue will not process new registrations for sales tax numbers, known as Certificates of Registration, until March 6, 2017. Apparently, Revenue is the lucky recipient of a computer upgrade.
We understand that as long as a liquor license holder already has a sales tax number, Revenue can accept a new liquor-by-the-drink bond or bond rider. Distilleries, wineries and breweries can also register new brands, as long as they already have a certificate of registration.
We figured that following passage of Wine in Grocery Store legislation, which we affectionately call WIGS, popular demand among consumers would lead to more changes in Tennessee law.
We blogged about pending legislation to legalize the sale of many wine coolers and niche products like sangria mixes in groceries and other food stores. https://www.lastcalltn.com/tennessee-considers-more-wine-in-grocery-stores-with-legislation/
In our not so humble opinion, one of the biggest changes in Tennessee law is legalizing Sunday sales of wine in Kroger, Publix, Wal-Mart and other food stores. We figure that the vast majority of shoppers would love to be able to buy wine on Sundays.
If Tennessee legalizes Sunday sales of wine in grocery stores, it seems only fair that liquor stores would also be allowed to open on Sunday. Problem is, we think Tennessee liquor stores will oppose Sunday sales.
Based on our unscientific observations, Sunday is a big day for grocery shopping. Grocers probably figure that many Sunday shoppers will put a couple of bottles of wine in their carts, if Sunday sales of wine are legal. Sunday wine at a grocery is essentially an impulse purchase; if I can buy wine when I am Krogering on Sunday, great, if not, I am not going to trek back later in the week to buy wine from a grocery or a liquor store.
Tennessee liquor stores probably see Sunday sales as something they have to do, if food stores can sell wine. But for a liquor store, being open on Sunday is not likely to draw many new sales. Grocers already do huge business on Sunday. Liquor store owners are closed. Opening Sunday increases employee salaries and other liquor store expenses.
Plus, Tennessee restaurants could see a decline in wine sales from folks that cannot buy wine on Sunday, but want a glass with lunch or dinner.
Our buddy Willa reminds us of “Sunday in the South” by Shenandoah:
Mill worker houses lined up in a row,
Another southern Sunday morning blow
Beneath the steeple all the people have begun
Shakin’ hands with the man who grips the gospel gun
Wine in Grocery Store legislation, which we affectionately call WIGS, allowed Tennessee grocery stores to sell wine beginning July 1, 2016, with a food store license issued by the Tennessee Alcoholic Beverage Commission.
WIGS was a messy compromise. We expected that WIGS would be revised to fix thorny issues.
A bill pending in the 2017 Tennessee Legislature will change the legal definition of wine and, in our humble opinion, allow food stores to legally sell many wine coolers and wine cocktails that are already on shelves.
Here is the problem. Current law says that wine sold by a grocery store must be:
the product of the normal alcoholic fermentation of the juice of fresh, sound, ripe grapes, with the usual cellar treatment and necessary additions to correct defects due to climatic, saccharine and seasonal conditions, including champagne, sparkling and fortified wine of an alcoholic content not to exceed eighteen percent (18%) by volume. No other product shall be called “wine” unless designated by appropriate prefixes descriptive of the fruit or other product from which the same was predominantly produced, or an artificial or imitation wine.
Are you asleep yet? Seriously, the definition is so hopelessly complicated that in our opinion, it is pretty much unenforceable by the TABC.
Pending legislation expands the definition of wine to eliminate the controversy.
The Tennessee ABC describes the legislative change at Sections 4, 5, and 6 – Definition of Wine SB695-HB435 Legislation Summary
Paralegal extraordinaire Vicki reminds us of a fitting Kenny Chesney song:
Mama told them Jesus loves a sinner
His daddy said that music saved his soul
Between the rockers and the band
It’s a fitting promise land
The Tennessee state legislature is in session again and several changes are proposed for alcoholic beverages. Our friends at Nashville law firm Gullet Sanford have done such a good job summarizing the biggest bill that we link to their post here. http://gsrmalcoholicbeveragelaw.com/alcoholicbeveragecleanupbillfiled/
Here is a copy of the bill, for anyone having problems with insomnia. http://www.capitol.tn.gov/Bills/110/Bill/HB0435.pdf
Our good friend Willa reminds us of the Eric Church classic Drink in My Hand:
To fill it up, or throw it down
I got a forty hour week worth of trouble to drown
No need to complicate it, I’m a simple man
All you got to do is put a drink in my hand
Stay tuned as we continue our coverage of the 2017 legislative session.
As we read it, a bill pending before the Tennessee State Legislature would essentially bypass the Metro Nashville beer application process for restaurants, hotels and other establishments with an on-premise liquor license issued by the Tennessee Alcoholic Beverage Commission. Just file an application, pay the $250 fee and you can serve beer.
The legislation is here HB0351.
The law also seems to eliminate the 100 foot distance requirement from houses, churches, schools and other disqualifying uses. Metro Nashville requirements for beer applicants would not apply, based on our take of the bill.
The classic 1975 “I’m Just a Bill” Schoolhouse Rock Saturday morning cartoon lesson is compelling:
I’m just a bill
Yes I’m only a bill,
And I got as far as Capitol Hill.
Well, now I’m stuck in committee
And I’ll sit here and wait
While a few key Congressmen discuss and debate
Whether they should let me be a law.
How I hope and pray that they will,
But today I am still just a bill.
Frankly, we hope the legislation gets stuck in committee. We are not a fan of state laws that eliminate local laws. Although we would love to see Metro Nashville modernize the beer laws and the beer application process, Metro Nashville can and should do so by passing a city ordinance.
We also see the legislation as yet another step by the state to eliminate local beer boards. For decades, Tennessee law has given cities and counties considerable leeway to decide how and where beer can be sold. Tennessee beer laws and beer boards are often cumbersome for businesses to navigate, but are an important local control over alcoholic beverages.
For example, the 100 foot distance requirement in Metro Nashville has been the subject of considerable debate. Currently, a restaurant that is too close to a house, church or school has to publish a public notice and have their local council member introduce a city law to waive the requirement. In our humble opinion, Nashville should decide the fate of the distance requirement.
We hear lots of questions about tipping. Can I include kitchen staff in tips? Can food runners share tips? What about my sushi chef?
Restaurants, bars, caterers and venues often surprise us with innovative ideas about tipping employees. Unfortunately, tipping has not so clear laws about who can – and more importantly – who cannot share in tips.
Bone McAllester employment guru Anne Martin gives this sage advice.
There are three basic factors to consider when determining if you can share tips with an employee:
- Does the employee meaningfully participate in the customer experience?
- Is the employee part of management, which is undefined but disqualifies tipping?
- Is the position customarily and regularly tipped in the industry?
Whether an employee can be tipped really depends on specific job duties. Servers and bartenders can clearly be tipped. Prep chefs and bus boys generally cannot.
In our humble opinion, the third factor, “is this a position that is normally tipped,” works against innovative entrepreneurs. For example, some of our restaurant clients feature food prep as a key part of the customer experience. Like innumerable cable food shows, watching your food being prepared is entertainment.
The roles of traditional servers and chefs, for example, have blurred in recent years.
In our experience, the law is slow to accept new practices. Sharing tips with chefs and other food prep staff could be risky.
It all boils down to the specific facts.
We encourage folks with good questions to reach out to Anne with specific asks firstname.lastname@example.org. Anne really knows her stuff and is well worth paying for staying out of trouble.
A classic Michelle Shocked tune comes to mind, although wethinks Michelle is celebrating the jam that makes Music City famous, and not so much the sweet stuff you find at Loveless Cafe:
Yeah, we have a little revolution sweeping the land
Now once more everybody’s making homemade jam
So won’t you call your friends up on the telephone
You invite ’em on over, you make some jam of your own
You’ll be making jam
If you want the best jam
You gotta make your own
We recently learned of a new downside for Tennessee retail liquor stores delivering bottles of alcohol to customers. The Tennessee Alcoholic Beverage Commission cited at least one off-premises license holder for delivering hooch to a confidential informant.
The sale to minor citation involved a call to the package store for delivery of a bottle of alcoholic beverages to a nearby hotel. The store took the order, processed a credit card and sent an employee to deliver the booze. We understand that the employee met the “customer” in the hotel lobby and carded the “customer.”
Unfortunately for the retail store, the employee misread the age and completed the sale by delivering the bottle to the underaged informant. The ABC issued a citation for sale to minor. Based on what we know, the informant presented an authentic Tennessee driver’s license with a red box around the photo, indicating that the informant was under 21.
Time and time again, we remind license holders to train employees to focus on under 21 Tennessee IDs. Please, please please. The ABC is doing a great job with underage stings. We recently blogged about 429 ABC sale to minor citations over the past year.
Willa brings up The Police’s 1983 massive hit:
Every move you make, every vow you break
Every smile you fake, every claim you stake, I’ll be watching you
E-mail us if you would like to learn more about our Red Box Carding techniques at email@example.com. The ABC is definitely watching you.