High Grav Beer Law Change Has Hidden Consequences for Tennessee Breweries

We follow up our Tennessee high gravity beer news with minutia that only a serious industry member like a Brewery could appreciate.  The info in this post is compliments of Bone McAllester Alcoholic Beverage team member Rob Pinson, after consulting with reliable sources.  This is all subject to change, as the “law” is being interpreted.  We applaud Revenue for the guidance.

$100 Brand Fee

Revenue will not require this. Whether it is for new brands, existing brands, or renewals of beer between 5-8%, Revenue will not require the $100 fee (and we do not believe that the ABC has the authority to collect it either).

For beer at or below 5% ABW

Proceed as usual. Submit territorial designation form to Revenue. No renewals.

If introducing a new beer between 5% and 8% ABW

The brewery should send in the beer territorial designation form, the ABW % for the product, a copy of the COLA (if required by TTB), a copy of the label, the wholesaler contract (which is still required under the law, even though it is technically beer), and the brand registration form (ALC119). There is no fee with this registration. Revenue will register the beer brand in both the liquor brand list and the beer brand list.

If you have an existing brand that is between 5% and 8% ABW

The brewery should send Revenue a list of their brands and the ABW % for each brand. The beer brand will remain on the liquor brand list (minus wholesaler and counties) and get added to the beer brand list. Revenue is working on a letter to go out about this and we will share this when it becomes available.

For renewals

Revenue will send out renewal forms for the 5/31 renewal deadline for the liquor brand list. Breweries should follow the above guidelines to make sure they receive this in the mail. There are no renewals for beer brands at or below 5% ABW.

Beer Barrelage Tax

I have also confirmed that Revenue expects wholesalers to pay the $4.29 beer barrelage tax and not manufacturers.  Although we disagree with this interpretation of the law, we are not the Tax Man.  Tax on beer self-distributed by the brewery or sold on site is still subject to the tax and paid by the brewery.

We think of the classic tax song Fortunate Son by Creedence Clearwater Revival:

Some folks are born silver spoon in hand
Lord, don’t they help themselves, oh
But when the taxman comes to the door
Lord, the house looks like a rummage sale, yes

Source: LastCall