We at BSH are frequently provide guidance and compliance assistance for suppliers and wholesalers with the registration of beer brands with the Tennessee Department of Revenue (TDOR) so that the beers can be introduced for sale withing the state of Tennessee. The definition of beer in Tennessee as slid upwards from an ABW threshold of 5% to a ceiling of 8% ABW, with beers over 8% ABW being considered “alcohol” and not beer under Tennessee law. However, for tax and registration purposes, beer between the old definition of 5% ABW and up to 8%, although now under the definition of beer, is still not treated as beer by the TDOR.
So, what is an industry member to do when attempting to assign these 5%-8% brands to a wholesaler, and what is the appropriate contract (beer vs. alcohol franchise) to use when registering said brands? Lastly, what set of laws apply in the event of a supplier/wholesaler dispute.
We know that TCA 57-5-512 holds:
(e) This part shall only be applicable to agreements between wholesalers and suppliers related to the sale or distribution of beer with an alcoholic content of five percent (5%) by weight or less. All agreements between wholesalers and suppliers related to the sale or distribution of beer with an alcoholic content greater than five percent (5%) by weight shall be governed by title 47, chapter 25, part 15.
Tenn. Code Ann. § 57-5-512 (West)
So, regardless of the form used, in the event of a wholesaler/supplier dispute involving beers over 5% ABW, the alcoholfranchise laws govern for beers within this range.
Here is information obtained directly from TDOR in terms of how to register these products:
Before a brand of beer with an alcohol content of 5%-8% by weight can be distributed in Tennessee, it must be registered with the Tennessee Department of Revenue. Register through TNTAP In addition to the application and payment of the required tax, the following documents must be submitted to register with the Department.
- A copy of the federal basic permit;
- A copy of the brand label (if the brand is distributed under more than one label, each respective label must also be furnished);
- A copy of the federal C.O.L.A. (Certificate of Label Approval) for each brand;
- The original Tennessee wholesaler contract with the exact brand name listed or Beer Wholesaler Territorial Designation; and
- The Brand Registration Return for New Brands (ALC 119)
Each brand must be renewed each year by May 31st. Brands not renewed at that time will no longer be approved for sale in Tennessee.
Reference: Tenn. Code Ann. § 57-3-301; Rule 1320-4-6-.05.
Consistent with the above, TDOR seemingly has no preference for which form is submitted for beers within the above range; the law does not provide them with any flexibility for preference. State law does, however, mandate that the alcohol franchise laws govern any eventual dispute.
Last modified: September 8, 2023