(a)Exterior Signs.

Attorney's Note

Under the Tennessee Code, punishments for crimes depend on the classification. In the case of this section:
ClassPrisonFine
class C misdemeanorup to 30 daysup to $50
class E felony1 to 6 yearsup to $3,000
class A misdemeanorup to 11 monthsup to $2,500
class B misdemeanorup to 6 monthsup to $500
For details, see Tenn. Code § 40-35-111
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Terms Used In Tennessee Code 57-4-203

  • beverage: means and includes alcohol, spirits, liquor, wine, and every liquid containing alcohol, spirits, wine and capable of being consumed by a human being, other than patented medicine or beer as defined in §. See Tennessee Code 57-4-102
  • Caterer: means a business engaged in offering food and beverage service for a fee at various locations, which:
    (i) Operates a permanent catering hall on an exclusive basis or restaurant. See Tennessee Code 57-4-102
  • Club: means a nonprofit association organized and existing under the laws of this state, which has been in existence and operating as a nonprofit association for at least two (2) years prior to the application for a license hereunder, having at least one hundred (100) members regularly paying dues, organized and operated exclusively for pleasure, recreation and other nonprofit purposes, no part of the net earnings of which inures to the benefit of any shareholder or member. See Tennessee Code 57-4-102
  • Commercial airline: includes any airline operating in interstate commerce under a certificate of public convenience and necessity issued by the appropriate federal or state agency, or under an exemption from the requirement of obtaining a certificate of public convenience and necessity but otherwise regulated by an appropriate federal or state agency, with adequate facilities and equipment for serving passengers, on regular schedules, or charter trips, while moving through any county of the state, but not while any such commercial airline is stopped in a county or municipality that has not legalized such sales. See Tennessee Code 57-4-102
  • Commercial airline travel club: means an organization established and operated by or for a commercial airline as defined in this section for the convenience and comfort of airline passengers. See Tennessee Code 57-4-102
  • Commission: means the alcoholic beverage commission, created pursuant to chapter 1 of this title. See Tennessee Code 57-4-102
  • Convention center: means a facility possessing each of the following characteristics:
    (i) Owned by the state, municipal and/or county government, or a nonprofit, tax exempt, charitable organization that operates a symphony orchestra, and leased or operated by that government or by a nonprofit charitable corporation established to operate such facility. See Tennessee Code 57-4-102
  • Conviction: A judgement of guilt against a criminal defendant.
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Electronic funds transfer: The transfer of money between accounts by consumer electronic systems-such as automated teller machines (ATMs) and electronic payment of bills-rather than by check or cash. (Wire transfers, checks, drafts, and paper instruments do not fall into this category.) Source: OCC
  • Escrow: Money given to a third party to be held for payment until certain conditions are met.
  • facility: includes any location within the property designated by the licensee. See Tennessee Code 57-4-102
  • Insane: includes all persons of unsound mind. See Tennessee Code 1-3-105
  • License: means the license issued pursuant to this chapter. See Tennessee Code 57-3-101
  • Licensee: means any person to whom such license has been issued pursuant to this chapter. See Tennessee Code 57-3-101
  • Limited service restaurant: means a facility possessing each of the following characteristics:
    (A) Is a public place which has a seating capacity for at least forty (40) patrons and that is kept, used, maintained, advertised and held out to the public as a place where during regular hours of operation:
    (i) Alcoholic beverages, beer or wine are served to patrons. See Tennessee Code 57-4-102
  • Municipality: means an incorporated town or city having a population of:
    (i) Seven hundred (700) or more, according to the 2010 federal census or a subsequent federal census. See Tennessee Code 57-3-101
  • Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
  • Person: includes a corporation, firm, company or association. See Tennessee Code 1-3-105
  • premier type tourist resort: means :
    (A)
    (i) A commercially operated facility that:
    (a) Was established in 1962. See Tennessee Code 57-4-102
  • Representative: when applied to those who represent a decedent, includes executors and administrators, unless the context implies heirs and distributees. See Tennessee Code 1-3-105
  • Restaurant: means any public place kept, used, maintained, advertised and held out to the public as a place where meals are served and where meals are actually and regularly served, without sleeping accommodations, such place being provided with adequate and sanitary kitchen and dining room equipment and seating capacity of at least forty (40) people at tables, having employed therein a sufficient number and kind of employees to prepare, cook and serve suitable food for its guests. See Tennessee Code 57-4-102
  • Retailer: means any person who sells at retail any beverage for the sale of which a license is required under this chapter. See Tennessee Code 57-3-101
  • Special occasion license: means a license which the commission may issue to a bona fide charitable, nonprofit or political organization. See Tennessee Code 57-4-102
  • Sports authority facility: means a facility possessing the following characteristics:
    (i) The facility is owned or operated by a sports authority established under title 7, chapter 67, a public building authority or a governmental entity. See Tennessee Code 57-4-102
  • Suite: means any room or group of rooms, leased by the operator of a sports authority facility or a convention center, physically located within such facility or center, where access to such room or rooms is restricted to the lessee or such lessee's guests. See Tennessee Code 57-4-102
  • Terminal building of a commercial air carrier airport: means a building, including any concourses thereof, used by commercial airlines and their customers for sale of airline tickets, enplaning and deplaning of airline passengers, loading and unloading of baggage and cargo, and for providing other related services for the convenience of airline passengers and others, located in any airport which is served by one (1) or more commercial airlines, and:
    (A) Is operated by a board of commissioners whose membership is appointed by the legislative bodies of five (5) or more local governments or whose membership is appointed pursuant to §. See Tennessee Code 57-4-102
  • Theater: means any establishment in which motion pictures are exhibited to the public regularly for a charge. See Tennessee Code 57-4-102
  • Wholesaler: means any person who sells at wholesale any beverage for the sale of which a license is required under this chapter. See Tennessee Code 57-3-101
  • Wine: means 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 twenty-one percent (21%) by volume. See Tennessee Code 57-4-102
(1) No licensee shall place any sign of any description on the exterior of the licensee’s hotel, convention center, premier type tourist resort, restaurant, or club which is not in compliance with all duly adopted local ordinances relative to such exterior signs.
(2) A violation of subdivision (a)(1) is a Class C misdemeanor.
(b)Sales to Minors Prohibited.

(1)

(A) Any licensee or other person who sells, furnishes, disposes of, gives, or causes to be sold, furnished, disposed of, or given, any alcoholic beverage to any person under twenty-one (21) years of age commits a Class A misdemeanor and shall be punished in accordance with § 39-15-404, as well as any other applicable section.
(B) Any licensee engaging in business regulated hereunder or any employee thereof who sells, furnishes, disposes of, gives, or causes to be sold, furnished, disposed of, or given any beer or malt beverage as defined in § 57-6-102 to any person under twenty-one (21) years of age is guilty of a Class A misdemeanor.
(C) The commission may, upon finding that a licensee has violated subdivision (b)(1)(A) or (b)(1)(B) 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.
(2) Any person under the age of twenty-one (21) years who:

(A) Purchases, attempts to purchase, receives, or has in such person’s possession in any public place, any alcoholic beverage, commits a Class A misdemeanor; or
(B) Knowingly makes a false statement or exhibits false identification to the effect that the licensee is twenty-one (21) years of age or older to any person engaged in the sale of alcoholic beverages for the purpose of purchasing or obtaining the same commits a Class A misdemeanor.

(i) If a person violating this subdivision (b)(2)(B) is less than eighteen (18) years of age, such person shall be punished by a fine of fifty dollars ($50.00) or not less than twenty (20) hours of community service work, which fine or penalty shall not be suspended or waived. The fine imposed by this subdivision (b)(2)(B)(i) shall apply regardless of whether the violator cooperates with law enforcement officers by telling them the place the alcohol was purchased or obtained or from whom it was purchased or obtained.
(ii) If the person violating this subdivision (b)(2)(B) is eighteen (18) years of age or older but less than twenty-one (21) years of age, such person shall be punished by a fine of not less than fifty dollars ($50.00) nor more than two hundred dollars ($200) or by imprisonment in the local jail or workhouse for not less than five (5) days nor more than thirty (30) days. The penalties imposed by this subdivision (b)(2)(B)(ii) apply regardless of whether the violator cooperates with law enforcement officers by telling them the place the alcohol was purchased or obtained or from whom it was purchased or obtained.
(C)

(i) In addition to any criminal penalty established by this section, a court in which a person younger than twenty-one (21) years of age is convicted of the purchase, attempt to purchase or possession of alcoholic beverages, or the making of a false statement or exhibition of false identification for the purpose of purchasing or obtaining alcoholic beverages in violation of this section, shall prepare and send to the department of safety, driver control division, within five (5) working days of the conviction an order of denial of driving privileges for the offender.
(ii) The court and the department of safety shall follow the same procedures and utilize the same sanctions and costs for an offender younger than twenty-one (21) years of age but eighteen (18) years of age or older as provided in title 55, chapter 10, part 7, for offenders younger than eighteen (18) years of age but thirteen (13) years of age or older.
(3) This chapter does not prohibit any person eighteen (18) years of age or older from selling, transporting, possessing or dispensing alcoholic beverages in the course of such person’s employment.
(c)Other Prohibited Sales.

(1) It is unlawful for any licensee or other person to sell or furnish any alcoholic beverage to any person who is known to be insane or mentally defective, or to any person who is visibly intoxicated, or to any person who is known to habitually drink alcoholic beverages to excess, or to any person who is known to be an habitual user of narcotics or other habit-forming drugs.
(2) A violation of subdivision (c)(1) is a Class A misdemeanor.
(d)Hours of Sale.

(1) Except as provided in subdivision (d)(5), hotels, clubs, zoological institutions, public aquariums, museums, motels, convention centers, restaurants, community theaters, theater, historic interpretive centers, sports authority facilities, and urban park centers, licensed as provided herein to sell alcoholic beverages, and/or malt beverages, and/or wine may not sell, or give away, alcoholic beverages and/or malt beverages and/or wine between the hours of three o’clock a.m. (3:00 a.m.) and eight o’clock a.m. (8:00 a.m.) on weekdays, or between the hours of three o’clock a.m. (3:00 a.m.) and twelve o’clock (12:00) noon on Sundays.
(2) Except as provided in subdivision (d)(5), hotels, motels and restaurants, licensed under § 57-4-102(28)(B) may not sell or give away alcoholic beverages, and/or malt beverages and/or wine between the hours of one o’clock a.m. (1:00 a.m.) and eight o’clock a.m. (8:00 a.m.) on weekdays or between the hours of one o’clock a.m. (1:00 a.m.) and twelve o’clock (12:00) noon on Sundays.
(3) Except as provided in subdivision (d)(5), establishments in a terminal building of a commercial air carrier airport and commercial airline travel clubs licensed as provided herein to sell alcoholic beverages, and/or malt beverages, and/or wine, may not sell, or give away, alcoholic beverages and/or malt beverages and/or wine between the hours of three o’clock a.m. (3:00 a.m.) and eight o’clock a.m. (8:00 a.m.) on weekdays or between the hours of three o’clock a.m. (3:00 a.m.) and twelve o’clock noon (12:00) on Sundays.
(4) Except as provided in subdivision (d)(5), licensees under § 57-4-102(29) may not sell or give away alcoholic beverages and/or malt beverages and/or wine between the hours of five o’clock a.m. (5:00 a.m.) and eight o’clock a.m. (8:00 a.m.) on weekdays or between the hours of five o’clock a.m. (5:00 a.m.) and twelve o’clock (12:00) noon on Sundays. Notwithstanding this subdivision (d)(4), a municipality in which a premise is located under § 57-4-102(29)(D) may, by the adoption of an ordinance by the municipality’s governing body, reduce or prescribe the hours and days upon which alcoholic beverages, beer, and wine may be consumed upon such premises; provided, that the ordinance does not expand such hours and days beyond the limitations of this subdivision (d)(4).
(5) The commission is authorized to extend the hours of sale in the jurisdictions which have approved the sale of liquor by the drink by referendum; provided, however, that such extension of hours as well as § 57-5-301(b)(5) shall apply to Sunday sales of beer within the area of the county outside a municipality which approves liquor by the drink by referendum unless the county legislative body by a two-thirds (2/3) vote sets the hours for Sunday sales of beer in accordance with § 57-5-301(b)(1) to apply within such area. Upon petition by any licensee or group of licensees under this chapter, the commission may, after conducting a rule-making hearing pursuant to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, adopt rules expanding the hours during which it is legal to sell or give away alcoholic beverages, malt beverages and wine, pursuant to this chapter. The commission is hereby directed to consider such factors as the hours of sales in contiguous states and the need to compete with jurisdictions elsewhere in the country for convention and tourism business. The governing body of any municipality or metropolitan government which has approved liquor by the drink by referendum may, at any time, opt out of any extension of hours adopted under this section by passage of a resolution. Further, any municipality or metropolitan government that has opted out may, at a later date, opt in by passage of a resolution.
(6) Except as provided in subdivision (d)(5), licensees under § 57-4-102(31)(J) and (K) shall not sell or give away alcoholic beverages, malt beverages, or wine between the hours of three o’clock a.m. (3:00 a.m.) and four o’clock a.m. (4:00 a.m.).
(e)Restrictions on Sealed or Unsealed Packages, or Gifts.

(1) No licensee hereunder shall sell any wine or other alcoholic beverage in any sealed or unsealed package to any patrons or customers for consumption off its premises. Notwithstanding the foregoing, a restaurant licensed under this chapter may permit a customer who purchases an unsealed package of wine in conjunction with a food purchase and consumes a portion of the wine on the premises to remove the partially filled package from the premises. In addition, a licensee holding a license issued pursuant to §§ 57-4-102(14) and (35) may sell and distribute alcoholic beverages and wine in unsealed containers to the occupant of a suite located within a sports authority facility or a convention center; provided, that such occupant is at least twenty-one (21) years of age, is authorized by the lessee of the suite to receive such alcoholic beverages and wine, and the alcoholic beverage or wine is not removed from the sports authority facility or convention center.
(2) A licensee shall not give away any such sealed package or any drink of wine or alcoholic beverage to any patron or customer; provided, that:

(A) A hotel licensed under this chapter may include as part of the accommodations to a registered guest the provision of up to four (4) seven hundred fifty milliliter (750 ml.) or smaller complimentary sealed packages of wine or alcoholic beverages for which all applicable taxes have been paid; and
(B) A licensee may serve a sample of wine to a patron or customer that does not exceed one ounce (1 oz.).
(3) The tax required by chapter 4, part 3 of this title shall be paid upon the normal sales price of any such packages of wines provided under this subsection (e).
(4) A restaurant or limited service restaurant may sell beer for consumption off premises upon meeting the requirements of § 57-5-101(c)(1)(B).
(f) Method of Sale.

Sales of wine and alcoholic beverages by licensees hereunder shall be conducted in the same manner as the sale of food is regularly conducted by such hotels, convention centers, premier type tourist resorts, restaurants, or clubs, except that no curb service of such beverages is lawful.

(g) Ownership of Alcoholic Beverages Sold.

(1) It is a Class C misdemeanor for any licensee hereunder to sell or serve on the licensee’s premises any wine or other alcoholic beverage unless such beverage is owned outright by the licensee.
(2) It is unlawful for any person, firm or corporation to sell wine or other alcoholic beverage as authorized herein without complying with the applicable provisions of this chapter.
(3) This subsection (g) shall not apply to events held by special occasion licensees who receive donated alcoholic beverages or beer.
(h)Restrictions on Employment. No entity holding a license issued pursuant to § 57-4-101 shall employ any person in the serving of beer, wine or other alcoholic beverages who does not possess a server permit from the commission. It is made the duty of the licensee to see that each person dispensing or serving alcoholic beverages, wine or beer in the licensee’s establishment possesses such a permit, which permit must be on the person of such employee or on the premises of the licensed establishment and subject to inspection by the commission or its duly authorized agent when the employee is engaged in the performance of that employee’s duties for the licensee.
(i)Premises Must Be Licensed – Exception for Conventions, Social Gatherings and Catered Events.

(1)

(A) Except with respect to a caterer licensed under this chapter, it is unlawful for any person, firm, corporation, partnership, or association to allow the dispensing of alcoholic beverages except sacramental wines and beer, in any establishment unless such establishment is licensed under this title.
(B) A violation of subdivision (i)(1)(A) is a Class B misdemeanor.
(2) Bona fide conventions or meetings, however, may bring their own alcoholic beverages onto the licensed premises if the same beverages are served to delegates or guests without cost. All other provisions of this chapter shall be applicable to such premises. This section has no application to social gatherings in a private home or a private place which is not of a commercial nature or where goods or services may be purchased or sold or any charge or rent or other thing of value is exchanged for the use thereof, excepting it be for sleeping quarters. Nothing herein shall preclude the serving of alcoholic beverages to guests without cost in rooms or suites or banquet rooms of a hotel or club licensed pursuant to this chapter.
(3) A restaurant, hotel, or caterer holding a valid catering license may sell or distribute wine, beer, and other alcoholic beverages at social or commercial events, catered by the restaurant, hotel, or caterer where the restaurant, hotel, or caterer is providing food service at such event; provided, that the restaurant, hotel, or caterer shall notify the commission as to the time, location and duration of the catered event before the commencement of the event. Nothing in this subdivision (i)(3) or chapter shall be interpreted to require a person who holds a valid caterer license under this chapter to also be licensed as a restaurant or hotel.
(j)Penalties Invoked.

(1) Any person, firm or corporation who violates any provision of parts 1 and 2 of this chapter is guilty of a misdemeanor, and, upon conviction thereof, shall be fined not less than five hundred dollars ($500) nor more than one thousand dollars ($1,000); and, in the discretion of the court, imprisoned not less than thirty (30) days, nor more than six (6) months, and each violation constitutes a separate offense.
(2) Any person, firm or corporation who shall sell wine or other alcoholic beverages for consumption on its premises except as authorized by parts 1 and 2 of this chapter is guilty of a misdemeanor and punishable as provided in this section.
(3) Upon conviction of a second offense under this chapter, the permit of any licensee so convicted shall be automatically and permanently revoked.
(4) Upon the second conviction of any person, firm, or corporation for violation of subdivision (b)(1), such person, firm, or corporation is guilty of a Class E felony. In addition, upon the second such conviction, the permit of such licensee shall be automatically and permanently revoked regardless of any other punishment actually imposed.
(k)Purchases by Special Occasion Licensees.

(1) No charitable, nonprofit or political organization possessing a special occasion license shall purchase for sale or distribution under such license any alcoholic beverages from any source other than a licensee under § 57-3-204. This subsection (k) shall not apply to homemade wine made in the Swiss tradition by a member or members of a special occasion permit holder issued a license pursuant to § 57-4-102(34)(D). The member may supply the wine notwithstanding the limitations of § 57-3-207(e).
(2) A charitable, nonprofit, or political organization, or any representative thereof, may accept donations of alcoholic beverages and beer from any licensee holding a license issued pursuant to § 57-3-202, § 57-3-203, § 57-3-204, § 57-3-207, § 57-3-605 or § 57-4-101; provided, that the charitable, nonprofit, or political organization serves or sells such alcoholic beverages and beer at an event conducted by the charitable, nonprofit, or political organization as a special occasion licensee.
(l)Commercial Airline Travel Clubs. A commercial airline travel club licensed under this chapter may provide complimentary drinks of wine and alcoholic beverages to its patrons, customers, and guests. Such commercial airline travel club must have a separate area, other than the gate and ticket areas, designated as a club area for use by its members. The tax required by part 3 of this chapter shall be paid upon the normal sales price of all such complimentary drinks of wine and alcoholic beverages provided under this subsection (l).
(m) Discounts. Nothing in this chapter shall prohibit a licensee from offering a discount in such manner as the licensee deems appropriate as long as the discount being offered is not below the cost paid by the licensee to purchase the alcoholic beverages from the retailer.
(n)Restrictions on Certain Limited Service Restaurant Licensees. Any establishment holding a license pursuant to § 57-4-301(b)(1)(W)(iv) shall not permit alcoholic beverages to be sold on sidewalks, streets, or alleys.
(o)Extension of Credit by Wholesalers to Retailers.

(1) No wholesaler licensed under § 57-3-203 shall be permitted to extend credit of any retailer licensed under § 57-4-101 unless pursuant to this subsection (o). All amounts due to any wholesaler from all sales to such retailers shall be due upon delivery of the product.
(2) Notwithstanding the limitations of subdivision (o)(1), wholesalers licensed under § 57-3-203 may extend credit to a retailer licensed under § 57-4-101 for a period not to exceed ten (10) days from the date of the delivery of the product; provided, the payment is effected by electronic funds transfer or escrow prepayment.
(3) It shall create a rebuttable presumption that a retailer licensed under § 57-4-101 is not financially responsible under § 57-3-104(c)(10) if the retailer fails to satisfy its obligations to any wholesaler in accordance with each wholesaler’s credit terms twice within a twelve-month period. Upon being advised by any wholesaler licensed under § 57-3-203 twice within a twelve-month period that a retailer has failed to comply with the applicable credit terms, the commission shall set a hearing as soon as practicable at its next available meeting to determine whether the retailer can rebut the presumption created by this subdivision (o)(3). Upon a finding that the retailer is not financially responsible under § 57-3-104(c)(10), the commission may issue a fine, suspend or revoke the license, or make any other order it deems appropriate.
(4) Notwithstanding any law to the contrary, the commission is authorized to issue a citation in an amount not to exceed five hundred dollars ($500) per violation against any retailer licensed under § 57-4-101 if, upon investigation, the commission finds that the retailer has failed to satisfy its obligations to any wholesaler in accordance with each wholesaler’s credit terms twice within a twelve-month period.
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