At the February meeting of the Tennessee Alcoholic Beverage Commission (TABC), Staff requested that the Commission consider granting the staff the authority to approve ownership changes that occur within a licensee. There would still be a $300 application fee for the change and the staff would still have to approve it, but trying to make an Agenda filing deadline would no longer be an issue. This would be limited to situations where stock percentages are shifting, but no new owners are actually being added. Current practice is, and has been for years, that ANY change of ownership by a retail package store, wholesaler or manufacturer requires prior approval by the Commission. This has always been somewhat problematic, especially around the end of year when people are scrambling around trying to get changes made for tax purposes. Often times the paperwork that the TABC requires a licensee to submit in order to be placed on the Agenda comes after the filing deadline, so licensees are left to decide whether to not make the change and miss out on a tax benefit or go ahead and make the change knowing it’s a TABC violation and they will incur a fine.

The TABC staff has generally been flexible and allowed a licensee to be placed on an Agenda after the change has been made, if the licensee self-reported the change and agreed to a $500 fine. For larger companies, the $500 fine was generally much smaller than the tax savings realized by the change, so it was considered the cost of doing business. For smaller companies, it was more of a hit. If the Commission agrees to this change, it will solve some end of the year issues for some companies. It will also give owners more flexibility with their internal structure if they are able to make intra-company changes without going in front of the Commission. The Commissioners seemed receptive to the idea, but voted to defer this issue until they have full Commission again. Right now, the three member Commission is down to only two members, but the remaining Commissioners were optimistic that the open seat will be filled by next month’s meeting.

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