ALC-7 - Beer Manufacturers are Liable for Beer Taxes on Self-Distributed Beer [May 27, 2021]

Public Chapter 432 (2021), effective October 1, 2021, expands the jurisdictions in this state in which a licensed beer manufacturer may self-distribute its product, if certain requirements are met. ALC-7 has been updated to reflect this change.

A licensed beer manufacturer who brews no more than 25,000 barrels of beer, including high alcohol content beer, annually and who operates as a retailer may self-distribute the beer it manufactures directly to retailers in the county in which the manufacturer is located. Such manufacturer is also permitted to self-distribute the beer it manufactures directly to retailers outside the manufacturer’s county if the manufacturer:

  • Self-distributes no more than 1,800 barrels of its beer annually in this state; and
  • Is not prohibited from self-distribution in the county due to a contract with a beer wholesaler.

If a beer manufacturer self-distributes more than 1,800 barrels of beer annually in this state, the manufacturer must enter into a contract with a wholesaler to distribute the manufacturer’s beer within 90 days of exceeding the 1,800-barrel limitation.

A beer manufacturer who self-distributes its beer is responsible for collecting and paying the beer barrelage tax and the wholesale beer tax on its self-distributed product. For the purpose of these taxes, any distribution, sale, or transfer of beer by a manufacturer directly to a beer retailer is considered a wholesale sale.

In addition to the registration and reporting requirements for a licensed beer manufacturer, a beer manufacturer who self-distributes its beer must register with the Department as a wholesaler and must comply with the licensing, permitting, reporting, and bonding requirements imposed on wholesalers in this state.

Self-distributing beer manufacturers are required to post a $10,000 wholesale beer tax bond with the Department. The beer tax bond forms can be found on our website. You can register with the Department for a wholesale beer tax account and upload your supporting documentation on TNTAP.

References: Tenn. Code Ann. §§ 57-5-101 et seq. and 57-6-101 et seq.

 

PREVIOUS ALC-7 – NOT APPLICABLE AS OF OCTOBER 1, 2021, DUE TO LAW CHANGE

Any beer manufacturer that self-distributes in its own county is required to register with the Department of Revenue as a wholesaler and pay the wholesale beer tax (See Tenn. Code Ann. 57-5-103(c) and Tenn. Code Ann. § 57-5-101(c)(2)). Such manufacturers are required to post the $10,000.00 wholesale beer tax bond with the Department. The beer tax bond forms can be found on our website.                                                  

You can register with the Department for a wholesale beer tax account on TNTAP and upload your supporting documentation there.

 

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