Tennessee § 57-3-406 - Regulation of retail sales.

§ 57-3-406. Regulation of retail sales.

Except for retailers licensed under § 57-3-204, no person, corporation or other entity shall, directly or indirectly, operate any licensed retail establishment selling alcoholic spirituous beverages, not including wine, for off-premises consumption in this state. “Indirectly” means any kind of interest in such a retail business by way of stock ownership, loan, partner's interest or otherwise. A landlord shall be deemed to have an indirect interest in such a retail business when the lease agreement is based upon a percentage of profits or any other factor based upon sales of alcoholic beverages by the tenant as distinguished from being simply an interest in land for a period of time at a definite rate. Except as provided in this subsection (a), nothing shall prohibit the holder of a retail license from having more than one (1) retail license; provided, however, that the holder of a retail license shall not have more than two (2) retail licenses. If the commission has issued more than two (2) licenses to any person prior to April 12, 2016, such person shall be allowed to continue to have all such licenses and may renew all such licenses. In any municipality or county in which the issuance of two (2) or more retail licenses have been authorized under § 57-3-208(c), no retail licensee shall hold more than fifty percent (50%) of the licenses authorized for issuance in such municipality or county. For five (5) years beginning January 1, 2014, no retail license shall be issued to any applicant for a new location that is within one thousand five hundred feet (1,500') of an existing operating establishment holding a license issued pursuant to § 57-3-204 as of July 1, 2014, (an “existing licensed premises”) if the applicant for such new retail license already holds one (1) or more retail licenses issued under § 57-3-204, unless the commission receives the written consent from each retail licensee owning an existing licensed premises within one thousand five hundred feet (1,500') of such new location. Notwithstanding any law to the contrary, the holder of one (1) or more retail licenses issued under § 57-3-204 may purchase the business or assets of an existing licensed premises and obtain a retail license to operate such existing licensed premises, as the same may be expanded or modified, from time to time. Nothing in this subdivision (a)(4) shall be deemed to prohibit a retailer licensed under § 57-3-204 from obtaining a new or replacement license in connection with the relocation of an existing licensed premises, as long as the new location is within the jurisdiction of the municipality or county issuing the certificate required under § 57-3-208 for such existing licensed premises. Nothing in this chapter shall prohibit a retailer from offering a discount in such manner as the retailer deems appropriate as long as the discount being offered is not below the cost paid by the retailer to purchase the alcoholic beverages from the wholesaler. No retailer shall sell any alcoholic beverages or beer to any person who is visibly intoxicated, nor shall any retailer selling alcoholic beverages or beer sell to any person accompanied by a person who is visibly intoxicated. A retailer or any employee thereof shall not make or permit to be made any sales of alcoholic beverages or beer to minors. Prior to making a sale of alcoholic beverages for off-premises consumption, the adult consumer whose physical appearance does not reasonably demonstrate an age of fifty (50) years or older must present to the retailer or any employee of the retailer a valid, government-issued document, such as a driver license or other form of identification deemed acceptable to the retailer that includes the photograph and birth date of the adult consumer attempting to make an alcoholic beverage purchase. Persons exempt under state law from the requirement of having a photo identification shall present identification that is acceptable to the retailer. The retailer or employee shall make a determination from the information presented whether the purchaser is an adult. In addition to the prohibition of making a sale to a minor, no sale of alcoholic beverages for off-premises consumption shall be made to a person whose physical appearance does not reasonably demonstrate an age of fifty (50) years or older who does not present such a document or other form of identification to the license holder or any employee of the license holder in a face-to-face transaction. A violation of subdivision (d)(1) is a Class A misdemeanor. The commission may, upon finding that a licensee has violated subdivision (d)(1) two (2) or more times during any two-year period, and for good cause shown, fine the licensee not more than ten thousand dollars ($10,000) and require retraining of all employees of the licensee under the supervision of the commission in lieu of suspending or revoking the license of the licensee. No retail store shall sell, give away, or otherwise dispense alcoholic beverages except 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 ten o'clock a.m. (10:00 a.m.) and eleven o'clock p.m. (11:00 p.m.) on Sunday. Except as provided in § 57-3-404(e)(4)(E), no retailer of alcoholic beverages shall keep or permit to be kept upon the licensed premises any alcoholic beverages in any unsealed bottles or other unsealed containers except such open bottles and containers of damaged and unmarketable product retained by the retail licensee for purpose of return to a wholesaler or such open bottles and containers required for conducting a sales demonstration as permitted by § 57-3-404(h). No retailer as herein defined shall own, store or possess upon the licensed premises any merchandise unless the retailer shall also possess such documentation as prescribed by the commission to demonstrate that the taxes imposed in this chapter have been paid. No retailer may store any alcoholic beverages, wine, or beer at any location other than the licensed premises and the retailer shall not hold, store, or accept delivery of any products intended for another retailer. Notwithstanding subsection (e), a retailer shall not sell or give away any alcoholic beverages on Christmas, Thanksgiving, or Easter. No retail food store shall keep, or permit to be kept, upon the licensed premises any wine in any unsealed bottles or other unsealed containers except such open bottles and containers of damaged and unmarketable product retained by the retail food store for purpose of return to a wholesaler. This subsection (i) shall not apply to the premises within a retail food store that has a license under chapter 4 of this title. Notwithstanding any provision of this title to the contrary, retailers licensed under § 57-3-204 are authorized, for a fee or without a fee, to provide, within the state, consulting services related to alcoholic beverages and to the products, merchandise, and supplies that the retailer is authorized to sell under § 57-3-404(e), and may supply, sell, deliver, and install products authorized to be sold by the retailer to locations outside of the licensed premises. Any licensee making a delivery of alcohol, wine, or beer is subject to subsections (c) and (d) except that no person receiving delivery of alcohol, wine, or beer shall be required to purchase such items at the physical location of the retailer. The licensee shall require a valid, government-issued document, such as a driver license or other form of identification deemed acceptable to the retailer that includes the photograph and birth date of the person receiving the delivery and that shall be deemed sufficient to meet the requirements of this subdivision (j)(2) and subsection (d). A record of all deliveries shall be maintained in writing and must contain all information concerning the recipient, products delivered, the time of delivery, and place of delivery. Any delivery made by a retailer pursuant to this subsection (j) must be made only to the physical address indicated by the individual placing the delivery order. The delivery must be documented by a verification of the delivery signed by the recipient. Except as otherwise provided in subdivision (k)(3), notwithstanding any law or rule to the contrary, a delivery service that delivers prepared food from restaurants or food from a retailer to customers as part of the delivery service's business is authorized to deliver sealed packages of alcoholic beverages or beer or both sold by a retailer licensed under § 57-3-204 to the delivery service's customers and to deliver sealed packages of beer sold by an off-premise retail permittee licensed under § 57-5-103 to the delivery service's customers during the hours that these products may legally be sold if: The amount of alcoholic beverages or beer delivered to a customer is in such an amount to satisfy the customer's order; provided, however, if an amount ordered exceeds two gallons (2 gal.), then the delivery driver shall have available for inspection by a commission representative or other law enforcement official, a copy of the customer's order indicating the: Name of the customer and the name of the recipient of the alcoholic beverages or beer; Address where the alcoholic beverages or beer is to be delivered; and Amount of the alcoholic beverages or beer to be delivered; At least fifty percent (50%) of the delivery service's gross sales come from the delivery of food products or prepared food; Any delivery service employee who delivers alcoholic beverages or beer is twenty-one (21) years of age or older and is licensed pursuant to § 57-3-225; The delivery service is licensed pursuant to § 57-3-224; The delivery service has a written agreement with the retailer or permittee to deliver the retailer's or permittee's alcoholic beverages or beer to customers; Any delivery service employee, who delivers alcoholic beverages or beer, requires the customer to show a valid, government-issued document, such as a driver license or other form of identification deemed acceptable to the employee that includes the photograph and birth date of the customer before the customer is allowed possession of the alcoholic beverages or beer; and Any delivery made by a delivery service is made only to the physical address indicated by the individual placing the delivery order. The delivery must be documented by a verification of the delivery signed by the recipient. A delivery service described in subdivision (k)(1) shall not be prohibited from charging a fee either to customers, retailers, or beer permittees with whom the delivery service has previously entered into a written agreement as required by subdivision (k)(1)(E) when delivering sealed packages of alcoholic beverages or beer sold by a retailer or beer permittee. If a delivery service is delivering alcoholic beverages or beer purchased from a retailer in accordance with subdivision (k)(1), the delivery service shall not deliver the alcoholic beverages or beer to a customer who resides or is located at the time of the delivery at a distance greater than one hundred (100) miles from the licensed premises of the retailer at which the alcoholic beverages or beer was purchased. Acts 1939, ch. 49, §§ 11, 12; 1943, ch. 99, § 1; 1945, ch. 167, § 8; C. Supp. 1950, §§ 6648.15, 6648.16 (Williams, §§ 6648.14, 6648.15); Acts 1970, ch. 469, § 3; 1970, ch. 518, § 1; T.C.A. (orig. ed.), § 57-142; Acts 1981, ch. 479, § 1; 1984, ch. 746, § 2; 1992, ch. 608, § 8; 1995, ch. 223, § 1; 2002, ch. 672, § 1; 2009, ch. 208, § 1; 2012, ch. 947, § 4; 2014, ch. 554, §§ 8, 9, 12, 18, 28; 2014, ch. 861, § 16; 2015, ch. 285, § 1; 2015, ch. 428, §§ 3, 4; 2016, ch. 787, §§ 2, 3; 2016, ch. 898, § 2; 2016, ch. 1045, §§ 5-8; 2016, ch. 1068, §§ 4, 5; 2018, ch. 765, § 5; 2018, ch. 783, §§ 1, 2; 2018, ch. 933, §§ 1, 2, 5. Amendments. The 2018 amendment by ch. 765 inserted “or food from a retailer” in the introductory language of (k)(1). The 2018 amendment by ch. 783 rewrote (e) which read, “No retailer shall sell or give away any alcoholic beverage between eleven o'clock p.m. (11:00 p.m.) on Saturday and eight o'clock a.m. (8:00 a.m.) on Monday of each week. No retail store shall sell, give away or otherwise dispense alcoholic beverages except 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. The store may not be open to the general public except during regular business hours. Likewise, all retail liquor stores shall be closed for business on Thanksgiving Day and Christmas Day.” and rewrote (h) which read, “No retailer shall sell or give away any alcoholic beverages on the following holidays: Christmas, Thanksgiving, Labor Day, New Year's Day and the Fourth of July.” The 2018 amendment by ch. 933 added the last sentence in (g); and added (j)(3) and (k)(1)(G). Effective Dates. Acts 2018, ch. 765, § 8. July 1, 2018. Acts 2018, ch. 783, § 14. April 20, 2018. Acts 2018, ch. 933, § 7. July 1, 2018. Cross-References. Penalty for Class A misdemeanor, § 40-35-111 . Textbooks. Tennessee Jurisprudence, 16 Tenn. Juris., Intoxicating Liquors, §§ 8, 9, 12, 15. Law Reviews. One Too Many: Sellers, Servers Must Know “How Much Is Too Much” to Avoid Alcohol Related Injuries (Mike Faulk), 43 Tenn. B.J. 12 (2007). Sunday, the Sabbath, and the Blue Laws (Donald Franklin Paine), 30 Tenn. L. Rev. 249. Attorney General Opinions. Hours for the sale of beer in a municipality located within a Tennessee River resort district. OAG 10-92, 2010 Tenn. AG LEXIS 98 (8/17/10). The statutory provisions that prohibit retail sales by Tennessee liquor stores on Sundays and holidays but permit Tennessee distilleries to make retail sales on Sundays and holidays do not violate the Commerce Clause or equal protection guarantees. OAG 16-08, 2016 Tenn. AG LEXIS 8 (3/1/2016). NOTES TO DECISIONS 1. Public Policy. 2. Civil Actions. 3. —Sales to Minors. 4. Purchase of Other Business. 1. Public Policy. The public policy of this state is to prevent minors from purchasing, possessing, or imbibing alcoholic beverages. Brookins v. Round Table, Inc., 624 S.W.2d 547, 1981 Tenn. LEXIS 503 (Tenn. 1981), superseded by statute as stated in, Biscan v. Brown, — S.W.3d —, 2003 Tenn. App. LEXIS 875 (Tenn. Ct. App. Dec. 15, 2003). With the enactment of T.C.A. § 57-3-406 , the legislature clearly established a public policy against allowing a retailer from operating a second retail business. Ledbetter v. Townsend, 15 S.W.3d 462, 1999 Tenn. App. LEXIS 642 (Tenn. Ct. App. 1999). 2. Civil Actions. A person, who has the capacity and judgment to act responsibly in his own behalf, cannot recover damages where he actively contributes to the intoxication of another and the intoxication is the proximate cause of the injury that is the subject of the legal action. Brookins v. Round Table, Inc., 624 S.W.2d 547, 1981 Tenn. LEXIS 503 (Tenn. 1981), superseded by statute as stated in, Biscan v. Brown, — S.W.3d —, 2003 Tenn. App. LEXIS 875 (Tenn. Ct. App. Dec. 15, 2003). Sections 57-10-101 and 57-10-102 governing the liability of sellers of alcohol, rather than the duties imposed by criminal statutes, determine the civil liability of the seller. Worley v. Weigel's, Inc., 919 S.W.2d 589, 1996 Tenn. LEXIS 188 (Tenn. 1996), rehearing denied, — S.W.2d —, 1996 Tenn. LEXIS 255 (Tenn. 1996). 3. —Sales to Minors. A cause of action exists against a vendor who sells alcoholic beverages to a minor, where harm results therefrom. Brookins v. Round Table, Inc., 624 S.W.2d 547, 1981 Tenn. LEXIS 503 (Tenn. 1981), superseded by statute as stated in, Biscan v. Brown, — S.W.3d —, 2003 Tenn. App. LEXIS 875 (Tenn. Ct. App. Dec. 15, 2003). 4. Purchase of Other Business. The broad language of T.C.A. § 57-3-406 suggests that a retailer who purchases a retail business also indirectly operates such a business; therefore, entering into a contract for the purchase of another retail business is impliedly prohibited by T.C.A. § 57-3-406 . Ledbetter v. Townsend, 15 S.W.3d 462, 1999 Tenn. App. LEXIS 642 (Tenn. Ct. App. 1999).