Roll Out the Red Tape for Tennessee Retail Liquor and Grocery Stores: Background Checks Now Mandatory

By - July 21, 2017 | Alcoholic Beverage Law, Wigs Manager | Email Will Cheek

Anyone that has applied for a liquor license for a grocery or retail liquor store in Tennessee understands red tape. We purchase the stuff by the truckload around here. We seem to consume more red tape than oxygen and bourbon – combined.

Starting July 1, 2017, applications for Certificate of Compliance in Tennessee must be filed with national and local background checks. The new Tennessee law requires that:

Each applicant or officer … must obtain and submit with the certificate a local and national criminal history record obtained from a third party using a multistate criminal records locator or similar nationwide database with validation.

The background checks are to prove that the applicant or officer has not been convicted of felony in the last 10 years. Read the full text here PC 357.

Problem is, seems only a handful of folks in Tennessee know about the new requirement. We are advising liquor and food store owners to submit the background checks, even if the city says they are not required. It is, after all, state law.

Questions abound.

Who is required to submit the background checks? Certainly not every corporate officer of a publicly traded company. Do we just pick the people? If so, seems to be a great way to hide your favorite felon.

What is a local background check? For that matter, what is a “national criminal history record?”

We recommend satisfying the local requirement by filing a TBI background check. TBI checks cost $29, can be run online and do not require fingerprints. Results are back in days, if not hours. Start the process here. We can see some cities requiring their own police or other “local” background checks.

National background checks require a little more effort. We had to become qualified to pull them.

Plan in advance. At this juncture, no one knows what each city will want.

The new requirement could be a train wreck for unsuspecting liquor store owners and grocers looking to renew. Certificates of Compliance must be renewed every two years. The weeks leading up to July 1, 2018 will be particularly hectic, with several hundred certificates coming due on the two year anniversary of WIGS – Wine In Grocery Stores.

Not sure why, but we find ourselves humming the Grateful Dead train crash tune:

Driving that train, high on cocaine,
Casey Jones you better watch your speed
Trouble ahead, trouble behind
And you know that notion just crossed my mind

We hope the kinks are resolved long before 2018.

What’s On Your Wall?

By - May 19, 2017 | Alcoholic Beverage Law, Wigs Manager | Email Will Cheek

Restaurant, hospitality and grocery insiders call it the wall.  You know, the place where you have to publicly display your liquor license and other stuff the State of Tennessee issues.

We hear it all too often from restaurant, bar, hotel and grocery store owners and managers: what signs do I have to post on the wall?

Here is what Tennessee state law requires you to publicly post:

  • ABC Liquor License
  • City or County Beer permit
  • Certificate of Registration
  • City Business License
  • County Business License
  • Certificate of Occupancy
  • Most recent Health Inspection Report
  • ABC pregnancy warning sign

If you want to prohibit licensed gun owners from packing heat at your watering hole, post the universal no gun sign at every public entrance and exit.

The 1971 political “Signs” by one hit wonder 5 Man Electrical Band rings in our ears:

Sign, sign, everywhere a sign
Blockin’ out the scenery, breakin’ my mind
Do this, don’t do that, can’t you read the sign?

Many cities require that you post the fire occupancy or other fire marshal approval. Your local city may also require additional signs, and we encourage you to look around at what thy neighbor does.  If several  area restaurants post a sign that is not on your wall, you might ask whether you should add the sign to your collection.

Early Bird Gets The WIGS?

By - April 19, 2017 | Alcoholic Beverage Law, Wigs Manager | Email Will Cheek

Maybe so, if you are a food store looking to renew your wine in grocery store license, which we affectionately call WIGS.

What gives?

Picture this.  Several hundred grocery stores all filed applications to obtain liquor licenses to sell wine beginning July 1, 2016.  The Tennessee Alcoholic Beverage Commission, acting with near superhero powers, pre-approved WIGS applications in droves in June, allowing grocers to stock and prepare for the first day of wine sales.

This worked perfectly for the historic debut of WIGS on July 1, 2016.

Problem is, all those liquor licenses expire on the same date – July 1, 2017.  We see a train wreck in the making if human nature prevails and the vast majority of food stores wait until the last minute to try to renew WIGS licenses.

Conjures up the bizarre ode about Casey Jones’ untimely death saving the lives of scores of train passengers, often sung by Jerry Garcia with the Grateful Dead:

Mrs Casey when she heard the news
Sitting on her bedside, she was lacing up her shoes
Children, children now hold your breath
You will draw a pension at your Papa’s death

We strongly encourage food stores to file applications for WIGS renewals as soon as possible.  For dilatory filers, our crystal ball conjures up images of headaches, red tape and possible interruptions in sales.

Fortunately, the ABC gave the industry a heads up about WIGS renewals and provided helpful instructions.  Read the FAQs here WIGSrenewal.  We will continue to update WIGS renewals as July 1, 2017 D-Day approaches.

Tennessee Grocery Stores, Restaurants, Bars and Hotels Be on the Alert for Immigration Raids

By - March 03, 2017 | Alcoholic Beverage Law, Wigs Manager | Email Will Cheek

Just today, March 3, 2017, we heard from a restaurant that was “inspected” by agents looking for illegal immigrants and asking about proper documentation.  Scary stuff.  We understand that one or more Tennessee ABC agents lead the investigation.

Bone McAllester immigration expert Raquel Bellamy offers these Top 5 Immigration Tips for Employers.

Unauthorized immigration is a hot topic these days. Undocumented immigrants are roughly 5% of the U.S. civilian labor force, as reported by the Pew Research Center.  We suspect that many restaurants, bars and hotels have a much higher percentage of illegals.

Some employees give employers fake documents. Other employers intentionally hire undocumented immigrants, to gain a competitive advantage by offering lower pay and fewer protections. In the most egregious scenarios, employers falsify records and participate in labor trafficking by recruiting and smuggling workers from abroad (a big no no!).

A recent federal immigration executive order deputizes state and local law enforcement authorities to act as ICE agents.  Legally, TABC agents, local police and even beer board inspectors can now search your business for illegal or improperly documented immigrants.

Here are our top five immigration tips for employers:

1. Anticipate increased auditing of records to verify I-9 compliance. Locate and organize your records to avoid costly delays. You should have a completed I-9 for each employee.

2. Prepare for the inevitable by conducting an internal audit, which will help you identify any I-9 compliance issues.

3. Consult a competent employment attorney regarding any potential liability for violations of I-9 regulations.

4. Train front office staff (receptionists, hostesses, etc.) on how to respond to law enforcement officials who enter the premises to inquire about immigration violations. Know your rights to limit access of law enforcement officers.

5. Avoid discrimination based on national origin against potential employees. During the interview phase, limit your inquiry to whether the applicant is authorized to work in the United States and whether the applicant will require sponsorship to obtain work authorization. If an applicant or a current employee is confused about work authorization, you should encourage him/her to seek independent counsel.

6. I know I said 5, but who doesn’t love a bonus? Show compassion for workers who are experiencing personal trauma as a result of the changes in immigration enforcement priorities. Even U.S. citizens may experience a high level of anxiety over the potential impact to their family members and friends. Be mindful of negative interactions between employees. Some of my clients have reported workplace harassment. In one instance, a worker was blackmailed by a co-worker who threatened to call ICE. Employers should be aware of any workplace intimidation and maintain a policy against bullying. Again, regardless of your position on the debate, we are all less safe when pockets of our population are particularly vulnerable.

Ray Stevens controversial tune “Come to the U.S.A.” seems timely:

If you thinkin’ about illegal immigration
Be careful when you’re choosin’ the nation
‘Cause breakin’ the law in some countries is frowned upon.
Imagine that.

In a rare bit of shameless self-promotion, we can help you make sure you are properly documented, in case agents come a knockin’.  Feel free to e-mail us at will@willcheek.com

Survey Says: Tennesseans Want to Buy Wine in Groceries on Sundays

By - February 28, 2017 | Alcoholic Beverage Law, Wigs Manager | Email Will Cheek

We figured that following passage of Wine in Grocery Store legislation, which we affectionately call WIGS, popular demand among consumers would lead to more changes in Tennessee law.

We blogged about pending legislation to legalize the sale of many wine coolers and niche products like sangria mixes in groceries and other food stores.  https://www.willcheek.com/tennessee-considers-more-wine-in-grocery-stores-with-legislation/

In our not so humble opinion, one of the biggest changes in Tennessee law is legalizing Sunday sales of wine in Kroger, Publix, Wal-Mart and other food stores.  We figure that the vast majority of shoppers would love to be able to buy wine on Sundays.

If Tennessee legalizes Sunday sales of wine in grocery stores, it seems only fair that liquor stores would also be allowed to open on Sunday.  Problem is, we think Tennessee liquor stores will oppose Sunday sales.

Based on our unscientific observations, Sunday is a big day for grocery shopping.  Grocers probably figure that many Sunday shoppers will put a couple of bottles of wine in their carts, if Sunday sales of wine are legal.  Sunday wine at a grocery is essentially an impulse purchase; if I can buy wine when I am Krogering on Sunday, great, if not, I am not going to trek back later in the week to buy wine from a grocery or a liquor store.

Tennessee liquor stores probably see Sunday sales as something they have to do, if food stores can sell wine.  But for a liquor store, being open on Sunday is not likely to draw many new sales.  Grocers already do huge business on Sunday.  Liquor store owners are closed.  Opening Sunday increases employee salaries and other liquor store expenses.

Plus, Tennessee restaurants could see a decline in wine sales from folks that cannot buy wine on Sunday, but want a glass with lunch or dinner.

Our buddy Willa reminds us of “Sunday in the South” by Shenandoah:

Mill worker houses lined up in a row, 
Another southern Sunday morning blow 
Beneath the steeple all the people have begun 
Shakin’ hands with the man who grips the gospel gun

Tennessee Considers More Wine in Grocery Stores with Legislation

By - February 23, 2017 | Alcoholic Beverage Law, Wigs Manager | Email Will Cheek

Wine in Grocery Store legislation, which we affectionately call WIGS, allowed Tennessee grocery stores to sell wine beginning July 1, 2016, with a food store license issued by the Tennessee Alcoholic Beverage Commission.

WIGS was a messy compromise.  We expected that WIGS would be revised to fix thorny issues.

A bill pending in the 2017 Tennessee Legislature will change the legal definition of wine and, in our humble opinion, allow food stores to legally sell many wine coolers and wine cocktails that are already on shelves.

Here is the problem.  Current law says that wine sold by a grocery store must be:

the product of the normal alcoholic fermentation of the juice of fresh, sound, ripe grapes, with the usual cellar treatment and necessary additions to correct defects due to climatic, saccharine and seasonal conditions, including champagne, sparkling and fortified wine of an alcoholic content not to exceed eighteen percent (18%) by volume. No other product shall be called “wine” unless designated by appropriate prefixes descriptive of the fruit or other product from which the same was predominantly produced, or an artificial or imitation wine.

Are you asleep yet?  Seriously, the definition is so hopelessly complicated that in our opinion, it is pretty much unenforceable by the TABC.

Pending legislation expands the definition of wine to eliminate the controversy.

The Tennessee ABC describes the legislative change at Sections 4, 5, and 6 – Definition of Wine  SB695-HB435 Legislation Summary

The entire bill is here.  HB0435

Paralegal extraordinaire Vicki reminds us of a fitting Kenny Chesney song:

Mama told them Jesus loves a sinner
His daddy said that music saved his soul
Between the rockers and the band
It’s a fitting promise land

Photos from Liquor Conferences

By - January 12, 2017 | Alcoholic Beverage Law, Wigs Manager | Email Will Cheek

We have been remiss in not posting photos from liquor conferences.  Sorry.

Reminds us of Nirvana’s All Apologies:

What else should I write

I don’t have the right

What else should I be

All apologies

Here are photos from the 2016 annual meeting of the National Association of Licensing and Compliance Professionals.

And from the 2016 Regional National Conference of State Liquor Administrators.

Last but not least, from the Tenth Anniversary Hawaii Meeting of the Alliance of Alcohol Industry Attorneys and Consultants.

 

 

Tennessee Department of Revenue Revamps Liquor-by-the-Drink Bond Process

By - January 02, 2017 | Alcoholic Beverage Law, Wigs Manager | Email Will Cheek

The Department of Revenue recently announced major changes to liquor bonds for Tennessee restaurants, bars, venues and other liquor license holders.  Read more here.

We expect some chaos, which at least keeps it interesting for us jaded old fools.

Speaking of old folks, chaos reminds us of this classic Cold War parody from Get Smart:

For those that hold more than one license in Tennessee, the proposed changes are fantastic.  You will only need one bond, if you file the proper election.  We will let you know when the election becomes available, probably late this year.

As we read the announcement, Revenue also says it will not change bond amounts until after September 30, 2017.  No more dreaded LBD bond audit and worrying about increasing the amount of your bond at renewal, at least for a few months.

In the meantime, we strongly encourage licensees to renew bonds, CDs and cash deposits in lieu of bonds.

High Grav Beer Law Change Has Hidden Consequences for Tennessee Breweries

By - December 29, 2016 | Alcoholic Beverage Law, Wigs Manager | Email Will Cheek

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

Ring in the New Year by Forgetting About Tennessee’s Crazy High Gravity Beer Laws

By - December 29, 2016 | Alcoholic Beverage Law, Wigs Manager | Email Will Cheek

On January 1, 2017, the legal definition of beer in Tennessee changes from 5% to 8% alcohol by weight.  Meaning that beers with less than roughly 10% alcohol by volume no longer fall into that crazy category known as high gravity beer.

In Tennessee, beers stronger than 5% by weight or around 6.5% by volume were taxed and distributed as alcoholic beverages.  For consumers, it meant higher prices and not being able to buy a high grav beer at a grocery or convenience store.

No longer.  Although there are a few serious suds stronger than 8% by weight, the vast majority of high gravity beers will magically become regular “beer” in the New Year.  You can Kroger for high grav.  You will no longer pay the 15% alcoholic beverage tax at restaurants and bars.

The ancient and odd (at least to us) New Year’s traditional tune Auld Lang Syne comes to mind:

we’ll take a cup of kindness yet,
for auld lang syne.
And surely you’ll buy your pint cup!
and surely I’ll buy mine!

The new law fails to anticipate a number of details, which we expect will confuse industry members for some time.  But, please, everyone say thanks to the Tennessee Legislature for fixing the high gravity beer problem.