When an independent management company operates a hotel bar, is the hotel or management company responsible for paying the liquor-by-the-drink (LBD) and sales taxes collected on the hotel bar’s sale of alcoholic beverages?

Tennessee law requires the entity holding the LBD license to collect and remit the LBD tax, and the Tennessee Alcoholic Beverage Commission requires the management company to hold the LBD license. Therefore, the management company is responsible for the LBD tax.

The management company is also responsible for collecting and remitting sales tax on the sale of alcoholic beverages for consumption on the premises.

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