2015 Kentucky Revised Statutes CHAPTER 243 - ALCOHOLIC BEVERAGES -- LICENSES AND TAXES 243.157 Business authorized by a microbrewery license -- Microbrewery permitted to sell malt beverages produced on the premises for on-premises or off-premises purposes without transferring physical possession to a distributor if the microbrewery meets reporting requirements and has both a retail drink license and a retail package license -- Microbrewery required to collect taxes due when selling malt beverages.
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243.157 Business authorized by a microbrewery license -- Microbrewery permitted
to sell malt beverages produced on the premises for on-premises or offpremises purposes without transferring physical possession to a distributor if
the microbrewery meets reporting requirements and has both a retail drink
license and a retail package license -- Microbrewery required to collect taxes
due when selling malt beverages.
(1)
(2)
(3)
A microbrewery license shall authorize the licensee to perform the following
functions:
(a) Engage in the business of a brewer under the terms and conditions of KRS
243.150, provided that production of malt beverages at such microbrewery
shall not exceed twenty-five thousand (25,000) barrels in one (1) year;
(b) Serve on the premises complimentary samples of malt beverages produced by
such microbrewery in amounts not to exceed sixteen (16) ounces per patron,
provided the microbrewery is located in wet territory;
(c) Sell malt beverages produced on the premises of the microbrewery to licensed
distributors; and
(d) Sell malt beverages produced on the premises of the microbrewery for on- and
off-premises purposes in accordance with subsection (3)(b) and (c) of this
section.
A microbrewery license shall not be deemed to be incompatible with any other
license except for a distributor's license under the provisions of KRS 243.180.
In accordance with the provisions of this section, a microbrewery license holder
may:
(a) Hold retail drink and package licenses both on and off the premises of the
microbrewery. The holder of a microbrewery license is exempt from the
provisions of KRS 244.570 and 244.590 as applied to any retail licenses held
by the microbrewery license holder, and from any other sections which would
restrict the co-ownership of the microbrewery license and any retail licenses
described in this section;
(b) Sell malt beverages produced on the premises of the microbrewery for onpremises purposes without having to transfer physical possession of those
malt beverages to a licensed distributor provided:
1.
The microbrewery possesses a retail drink license for those premises;
2.
The microbrewery has a written contract with a licensed distributor
authorizing the distributor to purchase and distribute the microbrewery's
malt beverages to any other retailer; and
3.
The microbrewery provides to the distributor a monthly report of the
quantity of malt beverages produced at the microbrewery and sold at
retail at the microbrewery under the provisions of its retail drink license.
The report required under this subparagraph shall:
a.
Be provided to the distributor on or before the tenth day of the
month next succeeding the month in which the malt beverages
(4)
were produced and sold at the microbrewery; and
b.
Be provided on a form promulgated by the board by administrative
regulation. The information provided on the form shall be reported
to the Department of Revenue at the time and in the manner
required by that department in accordance with its powers under
KRS 131.130(3) and any administrative regulation promulgated
thereunder.
Nothing in this subparagraph shall require a distributor to verify the
accuracy of the information provided by the microbrewery in its report;
and
(c) Sell malt beverages produced on the premises of the microbrewery for offpremises purposes without having to transfer physical possession of those
malt beverages to a licensed distributor provided that:
1.
The microbrewery possesses a retail package license for those premises;
2.
The microbrewery has a written contract with a licensed distributor
authorizing the distributor to purchase and distribute the microbrewery's
malt beverages to any other retailer; and
3.
The microbrewery provides to the distributor a monthly report of the
quantity of malt beverages produced at the microbrewery under the
provisions of its retail package license. The report required under this
subparagraph shall:
a.
Be provided to the distributor on or before the tenth day of the
month next succeeding the month in which the malt beverages
were produced and sold at the microbrewery; and
b.
Be provided on a form promulgated by the board by administrative
regulation. The information provided on the form shall be reported
to the Department of Revenue at the time and in the manner
required by that department in accordance with its powers under
KRS 131.130(3) and any administrative regulation promulgated
thereunder.
Nothing in this subparagraph shall require a distributor to verify the
accuracy of the information provided by the microbrewery in its report;
and
4.
The amount of malt beverages purchased by a customer during a visit to
the microbrewery's premises does not exceed two hundred eighty-eight
(288) ounces per customer per day.
The provisions of subsection (3)(b) and (c) of this section shall apply only to malt
beverages that are:
(a) Produced by the microbrewery at its licensed premises; and
(b) Offered for sale by the microbrewery at that same premises under the
microbrewery's retail drink or package license.
All other malt beverages produced by the microbrewery which are offered for retail
(5)
(6)
(7)
(8)
sale shall be sold and physically transferred to a licensed distributor in compliance
with all other relevant provisions of KRS Chapters 241, 242, 243, and 244, and a
licensed microbrewery shall not otherwise affect sales of malt beverages directly to
retail customers except as provided in subsection (3)(b) and (c) of this section.
(a) A microbrewery selling malt beverages in accordance with subsection (3)(b)
and (c) of this section shall collect and provide the licensed distributor all
taxes due under KRS 243.884. The tax shall be computed at the rate of eleven
percent (11%) of the wholesale value of the malt beverages sold by the
microbrewery under the provisions of subsection (3)(b) and (c) of this section.
For the purposes of this subsection "wholesale value" shall be determined in
accordance with the contract required under subsection (3)(b)2. and (c)2. of
this section, as applicable.
(b) The licensed distributor shall be responsible for remitting these amounts to the
Commonwealth as provided in KRS 243.884(1). In accordance with KRS
243.886, the licensed distributor shall be allowed to deduct one percent (1%)
of the tax remitted under this subsection, provided the amount due is not
delinquent at the time of payment. Nothing in this subsection shall require the
licensed distributor to verify the amount of taxes collected and provided by
the microbrewery to be the true and accurate amount which is due according
to KRS 243.884; nor shall the distributor be responsible for remittance of
taxes due in the event the microbrewery fails to collect and provide the
amounts owed under the provisions of this subsection.
(c) A microbrewery shall pay the excise tax on malt beverages in accordance with
KRS 243.720(3) and 243.730 and shall be entitled to the credit set forth in
KRS 243.720(3)(b).
A microbrewery shall not be located in dry territory.
This section does not exempt the holder of a microbrewery license from the
provisions of KRS Chapters 241, 242, 243, and 244, nor from any rules of the board
as established by administrative regulations, nor from regulation by the board,
except as expressly stated in this section. The provisions of this section shall not be
deemed inconsistent with the provisions of KRS 244.602.
Nothing in this section shall be construed to vitiate the policy of this
Commonwealth, as set forth in KRS 244.167 and 244.602, supporting an orderly
three (3) tier system for the production and sale of malt beverages.
Effective: June 25, 2013
History: Amended 2013 Ky. Acts ch. 121, sec. 104, effective June 25, 2013. -Amended 1992 Ky. Acts ch. 25, sec. 1, effective July 14, 1992. -- Created 1984 Ky.
Acts ch. 60, sec. 1, effective July 13, 1984.
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