§ 57-3-202 — Manufacturer's or distiller's licenses - Qualifications of applicants - Fees - Permits to solicit orders - Penalty - Rules and regulations - Alternating proprietorship agreement
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(a) A manufacturer's or distiller's license may be issued, as hereinafter provided, for the manufacturing of alcoholic spirituous beverages or vintage alcoholic beverages. Any person, firm, or corporation desiring to manufacture for commercial purposes any alcoholic spirituous beverages or vintage alcoholic beverages shall make application to the commission for a license to manufacture the same, which application shall be in writing and verified, on the forms herein authorized, to be prescribed and furnished; and, thereupon, the commission may grant such license, subject to this chapter. (b) All applicants if individuals must be citizens of the United States, and all stockholders of any corporate licensee must likewise be citizens of the United States. (c) Such license shall not be issued unless and until there be paid to the commission a separate license fee of one thousand dollars ($1,000). (d) Before an individual owner, officer, employee, or representative of any manufacturer, rectifier, or importer may solicit orders from a licensed wholesaler in this state, such individual owner, officer, employee, or representative shall be the holder of a permit issued by the commission. The fee for such permit shall be fifty dollars ($50.00). Such permit shall authorize the holder to solicit orders upon the premises of a licensed wholesaler. A representative may sell the products of, or represent more than one (1) manufacturer, rectifier, or importer and such affiliates or subsidiaries that the manufacturer, rectifier, or importer may control by means of ownership or the ownership of a controlling stock interest. (e) "Vintage alcoholic beverages," as used in this section, means all wine sold by wholesalers licensed under § 57-3-203 . (f) (1) A manufacturer's license may be issued to a person, firm or corporation for the limited purpose of blending nonalcoholic products with alcoholic beverages on premises, either on its own behalf or on behalf of other entities pursuant to contract. (2) A licensee under this subsection (f) may obtain the alcoholic beverages for use in its blending operations from any entity holding a license or permit issued under this section, §§ 57-2-104 , 57-3-203 , 57-3-207 , and part 6 of this chapter. (3) A license may be issued to a manufacturer, under this subsection (f), notwithstanding the requirements of § 57-3-106 . (4) A manufacturer, licensed under this subsection (f) for the limited purpose of blending, may sell, distribute or transport the product produced from its blending operations in accordance with this title. (g) Notwithstanding subsection (f), an establishment licensed to sell alcoholic beverages for on-premises consumption pursuant to chapter 4, part 1 of this title, may, without a manufacturer's license, produce, store and sell infused products pursuant to § 57-4-108 . (h) The commission is empowered to make such regulations, investigations and audits as it may deem necessary for enforcing and preventing violations of this chapter. (i) (1) A manufacturer's license issued or renewed under this section to a manufacturer shall also allow such manufacturer to sell at retail on the licensed premises of the manufacturer products that are manufactured on the manufacturer's premises; provided, that no more than five gallons (5 gals.) or one-sixth (1/6) of a barrel of its products may be sold to any one (1) individual per visit to the premises. The manufacturer may serve samples of the product manufactured or distilled at the premises to any person of legal drinking age with or without cost or may include such samples as part of a tour of the manufacturer's or distiller's premises available to the public with or without cost. Such samples may be made available at any location on the manufacturing premises permitted by federal law. The manufacturer shall disclose to the commission the location where samples are available. The hours of sale for the manufacturer to sell products at retail shall be between the hours of eight o'clock a.m. (8:00 a.m.) and eleven o'clock p.m (11:00 p.m) on Monday through Saturday and between the hours of ten o'clock a.m. (10:00 a.m.) and eleven o'clock p.m. (11:00 p.m.) on Sunday. (2) A manufacturer electing to exercise the rights granted to it under subdivision (i)(1), may only sell at retail or provide samples of product that it has obtained from a wholesaler licensed under § 57-3-203 , and such wholesaler shall remit all taxes imposed under §§ 57-3-302 , 57-3-501 (which shall be collected from the manufacturer based upon its retail sales), and 57-6-201. For products acquired from a wholesaler by a manufacturer under this section, the wholesaler may permit the manufacturer to deliver its products to the location on its premises where such retail sales and samples will be effected, provided the wholesaler permitting such direct shipment must include the amounts delivered in its inventory and depletions for purposes of tax collections. (3) Notwithstanding any law to the contrary, any manufacturer selling at retail with the license authorized by this subsection (i) shall pay a municipal inspection fee, described in § 57-3-501 , if a municipality the manufacturer is located in imposes such inspection fee which shall then be remitted by the wholesaler as described in subdivision (i)(2). (4) (A) A distiller's license issued or renewed under this section authorizes a distillery to sell to any person of legal drinking age alcoholic beverages for consumption on the premises of the distillery, other than the bonded premises, where such consumption is also permitted by federal law. Distilled spirits sold under this subdivision (i)(4) must be manufactured on the premises of the distillery. (B) As used in subdivision (i)(4)(A), "premises," for purposes of consumption on the premises: (i) Means any and all of the real property owned or leased by a distillery upon which the distillery is operated, including any real property owned by the distillery contiguous thereto; and (ii) Does not mean the bonded premises of a distillery. (5) Samples served and alcoholic beverages sold for consumption on the premises of a distillery in accordance with this subsection (i) are not subject to the tax imposed by § 57-4-301(c) . (6) (A) Notwithstanding any law to the contrary, and in addition to any rights and abilities already permitted under this subsection (i), a manufacturer electing to exercise the rights granted to it under this subsection (i), may sell alcoholic beverages at retail, sell alcoholic beverages for consumption on the premises, and serve samples of any finished product that is transferred from another site for which a manufacturer's license under this section has been issued to the same licensee, only under the circumstances and conditions as outlined in this subdivision (i)(6). (B) A manufacturer may sell product transferred between different sites described in one (1) manufacturer's alcohol and tobacco tax and trade bureau (TTB) permit; provided, that: (i) The site identified as the plant address in the manufacturer's alcohol and tobacco tax and trade bureau (TTB) permit manufactures a minimum of one thousand (1,000) proof gallons at that site annually (prorated for partial years); (ii) Any site receiving transferred product has a minimum of two thousand square feet (2,000 sq. ft.) of bonded premises; (iii) Any site transferring product only transfers product that is manufactured at that site or manufactured at another site for which a manufacturer's license under this section has been issued to the same licensee; and (iv) Any site transferring or receiving transferred product must hold a manufacturer's license issued pursuant to this section. (C) A manufacturer may sell product transferred between sites described in separate manufacturer's alcohol and tobacco tax and trade bureau (TTB) permits; provided, that: (i) Any site transferring or receiving transferred product must hold a manufacturer's license issued pursuant to this section. Any site transferring product must have held the manufacturer's license for a minimum of three (3) years; (ii) Any site receiving transferred product shall not receive more transferred product than the equivalent amount of the proof gallons distilled at the receiving site for each calendar year; and (iii) Any site transferring product shall only transfer product that is distilled at that site or distilled at another site for which a manufacturer's license under this section has been issued to the same licensee. (D) Any manufacturer transferring or receiving product pursuant to this subdivision (i)(6) shall comply with the following requirements: (i) Provide written notice to the commission regarding the manufacturer's intent to transfer product, which notice shall specify the manufacturer's qualifications to transfer product pursuant to (i)(6)(B) or (i)(6)(C) and identify the address of each licensed premises that will transfer or receive transferred product; (ii) The manufacturer shall comply with subdivision (i)(2) and the distance restrictions in §§ 57-2-109 and 57-2-103(d)(6) , as applicable; (iii) A manufacturer transferring or receiving product pursuant to subdivision (i)(6)(B) shall maintain sufficient records documenting that the gallonage and transfer requirements of subdivision (i)(6)(B)(i) are being met and, with its annual renewal, shall file a copy of such records along with copies of the manufacturer's TTB Forms 5110.40 and 5110.28 and an affidavit certifying the amount of product manufactured at the site to document that the licensee has complied with the gallonage and transfer requirements; and (iv) A manufacturer transferring or receiving product pursuant to subdivision (i)(6)(C) shall maintain sufficient records documenting that the gallonage and transfer requirements of subdivision (i)(6)(C)(ii) are being met and, with its renewal, shall file a copy of such records along with copies of the manufacturer's TTB Form 5110.40 and an affidavit certifying the amounts of product distilled at the site receiving transferred product and the amount of transferred product the site received to document that the licensee has complied with the gallonage and transfer requirements. (E) Any records or reports filed in accordance with subdivision (i)(6)(D) are privileged and confidential and are not public records. (F) Failure to comply with the gallonage and transfer requirements of this subdivision (i)(6) may result in a civil penalty not to exceed ten dollars ($10.00) per gallon of the difference between the required gallonage and that disclosed in the licensee's affidavit filed in accordance with subdivision (i)(6)(D). Failure to comply with the gallonage and transfer requirements more than once within a three-year period may result in suspension or revocation of the manufacturer's license. (j) (1) Any nonprofit association organized to encourage and support the manufacture of alcoholic beverages with three (3) or more manufacturers licensed under this section or non-manufacturer non-resident sellers licensed under § 57-3-602(c) as members shall be allowed to hold not more than fifteen (15) alcoholic beverage festivals per calendar year. Each festival shall not exceed a period of seventy-two (72) hours. (2) Any manufacturer licensed under this section or non-manufacturer non-resident seller licensed under § 57-3-602(c) participating in a festival authorized by this subsection (j) shall be allowed to transport, serve and offer complimentary samples of any alcoholic beverage lawfully manufactured by the manufacturer or on behalf of the non-manufacturer non-resident seller pursuant to § 57-3-602(c) for tasting at the festival. (3) Any manufacturer licensed under this section or non-manufacturer non-resident seller licensed under § 57-3-602(c) participating in a festival authorized by this subsection (j) shall be allowed to transport alcoholic beverages produced by that manufacturer or on behalf of that non-manufacturer non-resident seller to sell at the festival for consumption off-premises. (4) (A) Any nonprofit association authorized by this subsection (j) to hold an alcoholic beverage festival shall apply for a special occasion license as defined in § 57-4-102 , in order for participating manufacturers licensed under this section or non-manufacturer non-resident sellers licensed under § 57-3-602(c) to serve complimentary samples as described in subdivision (j)(2) and to sell alcoholic beverages produced by the manufacturers or on behalf of the non-manufacturer non-resident sellers for consumption off-premises. (B) Notwithstanding § 57-4-102(34)(A) , a special occasion license issued for an alcoholic beverage festival authorized by this subsection (j) shall be for the duration of the festival for which application is made for a period not to exceed seventy-two (72) hours. A special occasion license issued pursuant to this subsection (j) shall only be available upon the payment of the fee as required by law for each separate day of the festival. (C) A nonprofit association authorized to conduct an alcoholic beverage festival pursuant to this subsection (j) shall be permitted to hold the festival in any municipality or county of the state in the manner provided in subdivision (j)(5). (5) A nonprofit association, as defined in subdivision (j)(1), is authorized to conduct an alcoholic beverage festival pursuant to this subsection (j) in a municipality or county of this state that has approved the sale of alcoholic beverages or has a licensed manufacturer located in that municipality or county, subject to complying with all permit requirements of the municipality or county, and in all other municipalities or counties upon receiving approval of the legislative body of the municipality or county to hold such festival at a location and in such manner authorized by such legislative body. (k) (1) (A) Any manufacturer licensed under this section shall be permitted to use items related to or incidental to the tasting of alcoholic beverages manufactured on the premises and such items may be mixed with such alcoholic beverages anywhere on or off the manufacturer's premises where tastings are permitted as well as at private events and events requiring a special occasion license. Such items may include, but are not limited to: (i) Bitters, whether manufactured on the premises or purchased at retail, used in the preparation or garnishment of alcoholic beverages or mixed alcoholic beverages; (ii) Any and all garnishes and food items used in the preparation or garnishment of alcoholic beverages or mixed alcoholic beverages, including any juices, concentrates, and other ingredients used in the preparation of mixed alcoholic beverages; (iii) Glassware and any other cups, glasses, or other containers normally used for serving drinks; (iv) Ice, water, soft drinks, and any other nonalcoholic beverages; and (v) Other alcoholic beverages manufactured on the premises. (B) Tastings under subsection (i) shall be limited to one-half ounce (½ oz.) of alcohol per stock keeping unit (sku) per tasting; (2) Any manufacturer licensed under this section shall be permitted to rent or lease out any portion of their premises for any event, with or without charge, whether the event is public, private, requires a special occasion license as defined in § 57-4-102 , or catered by a caterer licensed pursuant to chapter 4, part 1 of this title. Events cannot be held on the bonded premises or general premises of the manufacturer, as defined in 27 CFR part 19, unless the manufacturer has obtained prior approval from the alcohol and tobacco tax and trade bureau (TTB) for such events pursuant to federal regulations. (3) Owners, officers, employees, and representatives of any manufacturer licensed under this section shall be permitted to touch, handle, and pour product of such manufacturer at any and all tastings permitted by law, including, but not limited to, consumer education seminars, employee education seminars, retail sales demonstrations, consumer tastings, private events, events requiring a special occasion license as defined in § 57-4-102 , and any and all tastings permitted under this chapter, and any rules or regulations promulgated. (4) In the event of a conflict between any other law in this title and this subsection (k), this subsection (k) shall govern. (l) (1) A person applying for or renewing a license under this section shall provide the following information to the commission with regard to individuals or entities with more than a ten percent (10%) direct or indirect interest in the manufacturer or distiller to be licensed: (A) The name of each such individual or entity; (B) The percentage of ownership; and (C) All other information requested by the commission. (2) A person applying for or renewing a license under this section shall provide the following information to the commission with regard to individuals or entities with a ten percent (10%) or less direct or indirect interest in the manufacturer or distiller to be licensed: (A) The name of each such individual or entity; and (B) The percentage of ownership. (3) (A) A person who is applying for or renewing a license that has more than twenty (20) owners is not required to provide the information required by subdivisions ( l )(1) and (2); provided, however, that an individual owner with a direct or indirect interest of more than ten percent (10%) shall provide the commission with the information in subdivisions ( l )(1)(A)-(C) if requested to do so by the commission. (B) The commission may require additional information under this subdivision ( l )(3) that is necessary for the commission to verify compliance with this chapter and all other applicable laws, except that with respect to an owner with a ten percent (10%) or less direct or indirect interest in a manufacturer or distiller under this section where the owner affirms or attests to the commission that such owner is eligible to have such an interest pursuant to this chapter and other applicable laws, then the commission shall not request additional information regarding such owner, unless the commission has reason to believe that such affirmation or attestation is false. (m) (1) A manufacturer licensed under this section may enter into an alternating proprietorship agreement with one (1) or more manufacturers, subject to the restrictions of this subsection (m). (2) Parties to an alternating proprietorship agreement may alternate the use of a bonded or general premises, or both, or part of a bonded or general premises, or both, for the purpose of manufacturing alcoholic beverages, including high alcohol content beer. (3) A manufacturer that is a party to an alternating proprietorship agreement shall maintain a room or separate area of the general premises that is exclusively occupied by that manufacturer and is not alternated with another manufacturer. There is no size requirement for this exclusive premises. (4) Each manufacturer that is a party to an alternating proprietorship agreement shall individually receive approval of the agreement from the TTB and the commission prior to commencing operations at the general premises. (5) A manufacturer seeking approval for an alternating proprietorship agreement shall submit to the commission: (A) A description of the areas, equipment, resources, rooms, or buildings, or combination of areas, equipment, resources, rooms, or buildings, that will alternate between manufacturers; (B) Diagrams of the parts of the general premises that will and will not be alternated; (C) A copy of the written alternating proprietorship agreement between manufacturers; and (D) An acknowledgement from each manufacturer that they will maintain adequate records that track the alternating premises. Such records are subject to inspection by the commission upon request. (6) The commission may require additional information under this subsection (m) that is necessary for the commission to verify compliance with this chapter and other applicable laws. (7) Only the manufacturer participating in an alternating proprietorship agreement that is the property owner or primary lessee of the general premises may exercise retail rights and privileges under this subsection (m). If there are two (2) or more manufacturers that are property owners or are primary lessees, only one (1) manufacturer may exercise the retail rights and privileges under this subsection (m). (8) The manufacturers that are parties to an alternating proprietorship agreement must not be owned by the same individual or entity or by substantially similar ownership. "Substantially similar ownership" includes, but is not limited to: (A) An individual who owns more than a forty percent (40%) interest in two (2) or more of the manufacturers that are parties to the alternating proprietorship agreement; (B) An individual who owns a manufacturer that is a party to the alternating proprietorship agreement whose spouse is the owner of another manufacturer that is a party to the agreement; or (C) A manufacturer that is a party to the alternating proprietorship agreement that is owned by a trust that is for the benefit of an owner of another manufacturer that is a party to the agreement or the owner's spouse or children. (n) A manufacturer licensed under this section may purchase wine from Tennessee wineries and Tennessee farm wine producers, licensed pursuant to § 57-3-207 , and such wine, and any product that may result from the blending, distilling, or fortifying of such wine by the manufacturer, is the sole property of the manufacturer. The manufacturer, winery, or farm wine producer may transport the wine from the Tennessee winery or Tennessee farm wine producer. The transactions are not subject to taxation. (o) A manufacturer licensed under this section may distill, blend, and fortify wine of a winery or farm wine producer on behalf of the winery or farm wine producer; provided, that the manufacturer does not add to the wine distilled spirits, as defined under federal law on April 4, 2023, that were derived from a type of grain or product other than wine, and such distilled, blended, or fortified wine is the sole property of the winery or farm wine producer. The manufacturer, winery, or farm wine producer may transport the wine from the Tennessee winery or Tennessee farm wine producer. The manufacturer, winery, or farm wine producer may transport the distilled, blended, or fortified product back to the winery or farm wine producer. The transactions are not subject to taxation.
Tennessee § 57-3-202 (Manufacturer's or distiller's licenses - Qualifications of applicants - Fees - Permits to solicit orders - Penalty - Rules and regulations - Alternating proprietorship agreement) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.