2023 Arizona Revised Statutes › Title 4 - Alcoholic Beverages › § 4-205.08 - Microbrewery license; issuance; regulatory provisions; retail site

4-205.08.
Microbrewery license;  issuance;  regulatory provisions;  retail site
A. The director may issue a microbrewery license to any microbrewery. Each location that engages in producing,  manufacturing and bottling these products must obtain a separate microbrewery license. The licensee may not transfer the microbrewery license from person to person or from location to location.
B. An applicant for a microbrewery license,  at the time of filing the application for the license,  shall accompany the application with the license fee. Persons holding a microbrewery license shall report annually at the end of each calendar year,  at the time and in the manner as the director prescribes,  the amount of beer produced or manufactured by them during the calendar year and the amount delivered pursuant to subsection D,  paragraph 4,  subdivision (b) of this section. If the total amount of beer that is produced or manufactured during the calendar year exceeds the amount permitted annually by the license,  the licensee shall apply for and receive a producer's license only on surrender of the microbrewery license or licenses and shall have no continuing rights as a microbrewery under this section. On the surrender of the microbrewery license or licenses,  the licensee shall transfer,  surrender or otherwise relinquish control of all of its retail licenses located remotely from a microbrewery.
C. Notwithstanding any other law,  a licensed microbrewery may:
1. Sell beer produced or manufactured on the premises for consumption on or off the premises.
2. Make sales and deliveries of beer that the microbrewery produces or manufactures to persons licensed to sell beer under this title through wholesalers licensed under this title or as provided in subsection D,  paragraph 4,  subdivision (a) or (b) of this section.
3. Make sales and deliveries of beer that the microbrewery produces or manufactures to persons licensed to sell beer in another state if lawful under the laws of that state.
4. Serve beer produced or manufactured on the premises for the purpose of sampling the beer.
5. Sell beer produced or manufactured by other microbreweries for consumption only on the premises of the licensee,  except that the sales percentage of beer from other microbreweries may not exceed twenty percent of the licensee's annual sales of beer by volume at the premises. If the other microbrewery has established a distribution relationship with one or more wholesalers who are licensed under this title,  the beer shall be purchased through those wholesalers.
6. Maintain at no charge a tapping equipment system of a licensed retailer when the microbrewery sells beer as provided in subsection D,  paragraphs 3 and 4 of this section,  including cleaning the tapping equipment system and replacing bonnet washers,  friction rings,  valve stems,  hardware,  unions,  clamps,  air tees,  screws,  tapping devices,  tower heads and single air and beer lines.
D. A licensed microbrewery is subject to all of the following requirements:
1. The microbrewery shall produce or manufacture not less than five thousand gallons of beer in each calendar year following the first year of operation.
2. The microbrewery shall not produce or manufacture more than six million two hundred thousand gallons of beer in a calendar year.
3. If retail operations are conducted in conjunction with the microbrewery,  the microbrewery may sell other spirituous liquor products if the microbrewery holds an on-sale retail license for a bar,  beer and wine bar or restaurant. The microbrewery may be issued up to a combined total of seven retail licenses in this state,  whether the premises are located on or adjacent to a microbrewery or remotely from a microbrewery. The limit on the number of retail licenses applies on an aggregated basis to all microbreweries that are under common control of any person with control of the microbrewery.
4. The microbrewery may make sales and deliveries of beer that it has produced or manufactured to both:
(a) Retail licensees that meet the requirements prescribed in paragraph 3 of this subsection in any amount.
(b) Any other retail licensee in a cumulative amount not to exceed ninety-three thousand gallons in total for all licensed retailers in any calendar year.
E. A microbrewery that produces or manufactures more than one million two hundred forty thousand gallons of beer in a calendar year maintains all of the rights associated with a microbrewery license,  except that the microbrewery shall not:
1. Apply for or receive a retail license pursuant to subsection D,  paragraph 3 of this section for premises that are located remotely from the microbrewery.
2. Make sales or deliveries of beer that the microbrewery has produced or manufactured to any retail licensee as provided in subsection D,  paragraph 4 of this section,  except for the microbrewery's retail licensees on or adjacent to the microbrewery.
F. The gallonage amounts prescribed in subsection D,  paragraph 2 and subsection E of this section apply to the aggregate manufacture or production of all microbreweries that are under common control of any person with control of the microbrewery.
G. A microbrewery that is otherwise engaged as a distiller,  vintner,  brewer,  rectifier,  blender or other producer of spirituous liquor in any jurisdiction is prohibited from holding any retail license that is located remotely from a microbrewery. This subsection does not prohibit a person with control of more than one microbrewery from conducting retail operations remotely from a microbrewery pursuant to subsection D,  paragraph 3 of this section.
H. A microbrewery that sells or delivers beer pursuant to this section shall:
1. Pay to the department of revenue all luxury taxes imposed pursuant to title 42,  chapter 3 and all transaction privilege or use taxes imposed pursuant to title 42,  chapter 5.
2. File all returns or reports required by law.
I. A delivery of beer by a microbrewery to a purchaser in this state is a transaction deemed to have occurred in this state.
J. The director shall adopt rules to administer this section.