2023 Tennessee Code › Title 57 - INTOXICATING LIQUORS (§§ 57-1-101 — 57-10-102) › Chapter 3 - LOCAL OPTION-TRAFFIC IN INTOXICATING LIQUORS (§§ 57-3-101 — 57-3-1103) › Part 4 - PROHIBITED ACTS - ENFORCEMENT (§§ 57-3-401 — 57-3-415) › Section 57-3-404 - Regulations for purchase and sale of intoxicating liquors - Wholesalers - Check cashing - Ground floor location - Credit sales

(a)
It is unlawful for any person in this state to buy any alcoholic beverages herein defined from any person, who, to the knowledge of the buyer, does not hold the appropriate license under the laws of this state authorizing the sale of such beverages to the buyer.
(b)
No retailer shall purchase any alcoholic beverages from anyone other than a licensed wholesaler, nor shall any wholesaler sell any alcoholic beverages to anyone other than a licensed retailer or retail food store licensed to sell wine pursuant to part 8 of this chapter or a licensed wholesaler; provided, that such alcoholic beverages sold by one (1) wholesaler to another wholesaler shall be transported by common carrier or by vehicle owned or leased and operated by either the consignor wholesaler or the consignee wholesaler.
(c)
No manufacturer or distiller shall sell any alcoholic beverages to any person in this state except a licensed wholesaler and to another manufacturer or distiller, and no manufacturer shall hold a wholesaler's license.
(d)
(1)
No alcoholic beverage for sale to the retailer, or the retailer's representative, shall be sold except by a licensed wholesaler, who sells for resale on the wholesaler's premises and who carries on no other business, directly or indirectly, and whose wholesale business in alcoholic beverages is not operated as an adjunct to, or supplementary to, the business of any other person, either by way of lease of the wholesale premises or otherwise, for any business other than that permitted by the terms of such wholesaler's wholesale license.
(2)
Notwithstanding the limitations and restrictions imposed by this section, a wholesaler may invest its business assets in other businesses, and may engage in the sale and distribution of products other than alcoholic beverages; provided, that gross revenues from such other businesses and from the sale of products other than alcoholic beverages may not exceed fifty percent (50%) of a wholesaler's total gross revenues.
(3)
A licensed alcoholic beverages wholesaler may lawfully engage in activities covered by chapter 5 of this title, as provided by §
57-3-203(b)(2)
, without regard to the amount of gross revenues produced by such operation. Such wholesaler may, at the wholesaler's discretion, use the same warehouse and other facilities, vehicles and employees in both operations; provided, that all legal requirements applicable to such operations are satisfied with respect to each operation.
(e)
(1)
No retail licensee shall operate its business involving the sale of wine, beer or other alcoholic beverages in connection with the wholesale distribution of wine, beer or other alcoholic beverage nor shall such licensee sell its wine, beer or other alcoholic beverage for purposes of resale.
(2)
Notwithstanding subsection (a), beginning July 1, 2014, a retail licensee holding a license issued under §
57-3-204
shall be permitted to sell at retail beer and other malt beverages, subject to the restriction in [former] §
57-3-806(e)
. No permit or license other than the license issued pursuant to §
57-3-204
shall be required for the licensed retailer to engage in such sales of beer and other malt beverages and the issuer of that license has the authority to enforce any laws related to such sales.
(3)
A retail licensee shall be permitted to cash a check or other negotiable instrument for a fee when such service is made available to a person over twenty-one (21) years of age. No postdated check shall be cashed by a licensee under this section.
(4)
Beginning July 1, 2014, a retail licensee shall also be permitted to sell at retail items related to or incidental to the use, consumption, dispensing or storage of alcoholic beverages, together with merchandise and supplies related to special events or parties, subject to the restriction in [former] §
57-3-806(e)
. Such items may include, but are not limited to:
(A)
Newspapers, magazines, publications, videos and other media related to alcoholic beverages or food;
(B)
Utensils and supplies related or incidental to the use, consumption, dispensing or storage of alcoholic beverages, including, without limitation, corkscrews, beverage strainers, pourers, flasks, jiggers, stirrers, wine racks, wine refrigerators, wine cellars, decanters, carafes, glassware, ice crushers, bottle openers, can openers, and devices to maximize oxidation in uncorked wine bottles and other items used in connection with the consumption, storage or dispensing of alcoholic beverages;
(C)
Gift cards, packages and baskets that include alcoholic beverages and nonalcoholic items;
(D)
Nonalcoholic beverages;
(E)
Kegs and growlers, whether empty or filled with beer, wine or alcoholic beverages, on the licensed premises;
(F)
Concentrates and ingredients used in the preparation of mixed alcoholic beverages;
(G)
Beer and wine-making kits;
(H)
Products and supplies related to beer and wine-making;
(I)
Lemons, limes, cherries, olives and other food items used in the preparation or garnishment of alcoholic beverages or mixed alcoholic beverages;
(J)
Peanuts, pretzels, chips, cheese, crackers, appetizers and other snack foods;
(K)
Beverage coolers, ice chests and ice in any form;
(L)
Party supplies, party decorations, gift bags, greeting cards and other items for parties and special events;
(M)
Articles of clothing and accessories imprinted with advertising, logos, slogans, trademarks or messages related to alcoholic beverages;
(N)
Combined packages containing multiple alcoholic beverages;
(O)
Cigarettes, cigars and lighters and other smoking or tobacco related products; and
(P)
Lottery tickets if the retailer's application is approved by the Tennessee education lottery corporation as provided in §
4-51-115(e)
.
(Q)
Notwithstanding another law to the contrary, any hemp or hemp-derived cannabinoid product for which all required licenses, permits, or certificates have been obtained authorizing the sale of such product within this state.
(5)
A retail licensee may sell nonalcoholic products to persons under twenty-one (21) years of age including gift cards.
(f)
No wholesale or retail store shall be located except on the ground floor, and it may have two (2) main entrances opening on a public street, and such place of business shall have no other entrance for use by the public except as hereafter provided. When a wholesale or retail store is located on the corner of two (2) public streets, such wholesale or retail store may maintain a door opening on each of the public streets. Any sales room adjoining the lobby of a hotel or other public building may maintain an additional door into such lobby so long as same shall be open to the public. Every wholesale and retail store shall be provided with whatever entrances and exits may be required by existing or future municipal ordinances. When the location of a wholesale or retail liquor store is authorized to be located or operated within an established shopping center or shopping mall, and such liquor store cannot and does not have a main entrance or door opening onto a public street, but the main entrance or door would open or front on a shopping center parking area, the commission in its discretion may approve the issuance of a liquor license to cover such location within the shopping center or shopping mall, irrespective of the fact that the main entrance or door does not or would not open onto a public street.
(g)
(1)
No holder of a license for the sale of alcoholic beverages for wholesale or retail shall sell, deliver, or cause, permit or procure to be sold or delivered, any alcoholic beverages on credit, except that holders of wholesale licenses may sell on not more than ten (10) days' credit.
(2)
The ten-day period begins from delivery and receipt by the retail licensee. The ten-day period cannot include any day that the wholesaler is not open to make deliveries, receive payment or receive mail.
(3)
Any suspension of deliveries is a credit decision to be made by a wholesaler and a retail licensee.
(4)
A wholesaler shall be permitted to communicate with another wholesaler about the account status of any retail licensee.
(5)
Wholesalers shall advise the commission of any failure of a retailer to comply with this subsection (g).
(6)
The commission shall be permitted to post the account status of a retail licensee with any wholesaler on its website.
(7)
This subsection (g) shall not apply to nonalcoholic products.
(h)
(1)
No alcoholic beverages shall be sold for consumption on the premises of the seller except as provided in §§
57-4-101
- 57-4-203, and except as may be permitted by the regulations of the commission for the purpose of conducting consumer educational seminars by a licensee under §
57-3-204
, conducted on the premises of a business licensed pursuant to §§
57-4-101
- 57-4-203. A wholesaler licensed pursuant to §
57-3-203
or a person holding a permit as a representative or sales person pursuant to §
57-3-203(d)
may conduct a sales demonstration on the premises of a licensed retailer and, for such limited purpose, may provide free samples to the employees of a licensed retailer for consumption on such premises. A retail licensee may conduct such a sales demonstration for the persons employed by such licensee holding permits issued pursuant to [former] §
57-3-204(c)
using products and samples provided by a wholesaler or wholesaler sales representative notwithstanding the absence of the wholesaler or wholesaler sales representative. All such sales demonstrations permitted consumption shall be permitted only for sales, education, and promotional purposes and no one other than a retail licensee, a person holding a permit issued pursuant to [former]§
57-3-204(c)
, a wholesaler or a wholesaler sales representative, or a person holding a permit issued pursuant to §
57-3-202(d)
may be present in the room where such demonstration is conducted or may receive a sample for consumption.
(2)
(A)
A retail licensee may offer complimentary samples of the products it sells for tastings to be held on the premises of the retail licensee. Such tastings shall be for sales, education and promotional purposes. No person holding a license under §
57-3-203
shall, directly or indirectly, provide any products, funding, labor, support or reimbursement to a retailer for the consumer tastings authorized by this subdivision (h)(2).
(B)
(i)
The tastings may be held at the option of the retail licensee during the hours the retail licensee is open for business, without filing any notice other than as provided in subdivision (h)(2)(B)(ii) with the commission, and no charge or fee may be assessed by the commission for a retail licensee to offer such complimentary samples.
(ii)
With its annual renewal, the retail licensee shall notify the commission of its intention to conduct tastings during the year on the premises of the retail licensee. If following the date the license is renewed, the retail licensee makes a determination to offer tastings, the licensee shall notify the commission of its intention to conduct tastings for the remainder of the year.
(C)
The size of each sample shall be no greater than approximately two ounces (2 oz.) for each wine or high alcohol content beer sample and no greater than approximately one-half ounce (1/2 oz.) for each liquor sample. It is the responsibility of the retail licensee to limit the number of tastings per customer and the number of products available for tasting.
(D)
Notwithstanding any law or rule to the contrary, a retail licensee or employee of the licensee may participate in tastings.
(E)
A server permit is not required for employees conducting tastings if the employee has a permit pursuant to §
57-3-703
; provided, that every retail licensee which offers tastings is encouraged to ensure that any employee who is involved with the tastings understands that a violation of §
57-3-406(c) and (d)
and §
57-3-412
related to retail sales apply equally to those customers who participate in the tastings.
(F)
A supplier may provide, through licensed wholesalers, products for tasting purposes by a retail licensee.
(G)
(i)
Notwithstanding subdivisions (h)(2)(A)-(F), a manufacturer conducting a consumer tasting at a retail licensee's premises may, in the manufacturer's discretion:
(a)
Have a licensed wholesaler deliver the product to be tasted directly to the retailer using a zero dollar ($0.00) invoice; or
(b)
Obtain the product to be tasted from a wholesaler in advance of the tasting and bring the product to the retail licensee's premises to be used exclusively for consumer tastings.
(ii)
If a manufacturer chooses the option in subdivision (h)(2)(G)(i)(
b
), then the applicable wholesaler shall provide a zero dollar ($0.00) invoice for the product requested by the manufacturer. In addition, the manufacturer must notify the wholesaler in writing at least five (5) business days prior to pick up by the manufacturer of any scheduled consumer tasting that includes the date and location of the consumer tastings. If additional tastings occur, each manufacturer shall notify in writing their wholesalers of the date and location of the consumer tasting at least five (5) business days after such tastings.
(iii)
A manufacturer may acquire a reasonable amount of product for consumer tastings that will occur in the next thirty (30) days. If a manufacturer has leftover product after this thirty-day period, then the manufacturer may email the applicable wholesalers the approximate amount of leftover product, and the manufacturer may possess this overage for another thirty (30) days. This process may continue indefinitely until the extra product is used up or poured out by the manufacturer.
(iv)
A manufacturer shall not leave excess or leftover product, either sealed or unsealed, with a retail licensee. All product must be taken by the manufacturer to be used by them for future consumer tastings.
(i)
No wholesaler may provide a discount or other reduction in price to a retailer or retail food store wine licensee by virtue of the sales made to any other licensee. Any discount or pricing made available to a retailer or retail food store wine licensee shall be made available on the same terms and conditions to other retailers and food store wine licensees within the same jurisdiction. Any quantity discounts provided by wholesalers to any retailer licensed under this chapter or any licensee licensed under chapter 4 of this title cannot be cumulative in nature, but can be based only upon products delivered contemporaneously. No retail food store wine licensee may receive any remuneration, by whatever name, at a corporate office located inside or outside this state that affects the profitability of wine or beer sales in this state, that is not made available to all retail licensees or other retail food stores licensed to sell wine or beer in this state.
Amended by 2024 Tenn. Acts, ch. 940,s 1, eff. 5/6/2024.
Amended by 2021 Tenn. Acts, ch. 437, s 1, eff. 5/13/2021.
Amended by 2017 Tenn. Acts, ch. 443, s 6, eff. 5/25/2017.
Amended by 2014 Tenn. Acts, ch. 554, s 2, eff. 7/1/2014.
Acts 1939, ch. 49, §§ 5, 11, 14; 1945, ch. 48, § 1; 1945, ch. 167, § 6; C. Supp. 1950, §§ 6648.15-6648.17 (Williams, §§ 6648.8, 6648.14, 6648.17); Acts 1955, ch. 347, § 1A; 1967, ch. 211, § 2; 1970, ch. 469, § 2; 1971, ch. 72, § 1; modified; T.C.A. (orig. ed.), § 57-140; Acts 1983, ch. 454, § 1; 1993, ch. 157, § 1; 1997 , ch. 35, § 1; 1998, ch. 765, § 3; 2002, ch. 672, § 2; 2011 , ch. 448, § 19; 2012 , ch. 947, § 2.