Any business that holds a liquor-by-the-drink license is required to conduct a monthly inventory. See TENN. COMP. RULES & REGULATIONS 1320-4-2-.06(2)(d). To maintain good internal controls, an inventory should be performed monthly. The Department has a place for monthly inventory amounts on the liquor-by-the-drink tax return to ensure compliance with the applicable regulations and to help taxpayers. A lack of inventory records is a primary reason for liquor-by-the-drink tax audit assessments.
Reference: Rule 1320-4-2.pdf