2014 Tennessee Code
Title 57 - Intoxicating Liquors
Chapter 3 - Local Option--Traffic in Intoxicating Liquors
Part 2 - Licenses and Fees
§ 57-3-207 - Grape and Wine Law.

(a) This section shall be known and may be cited as the "Grape and Wine Law." This section shall prevail over any conflicting statutory provision.

(b) A winery license may be issued as provided in this section for the manufacture of alcoholic vinous beverages, as defined in § 57-3-101, upon a verified, written application to the commission on the proper form authorized to be prescribed and furnished in this section, and the application may be granted by the commission, subject to the restrictions of this chapter. Any winery license issued pursuant to this section shall authorize the holder of the license to manufacture, but not rectify, alcoholic vinous beverages, unless the holder of the license is also a distiller or rectifier, or both, holding a license to distill or rectify, or both, alcoholic spirituous beverages, and the winery license shall authorize the holder of the license to place the alcoholic vinous beverages in containers or bottles. Out-of-state wineries may apply for and obtain a winery license issued in accordance with this section.

(c) Each applicant for a winery license issued pursuant to this section shall pay to the commission a one-time, nonrefundable fee in the amount of three hundred dollars ($300) when the application is submitted for review. The license shall not be issued until a license fee of one hundred and fifty dollars ($150) is paid to the commission by the winery, but issuance of the license is exempt from the requirements of § 57-3-106. The commission shall deposit collections with the state treasurer to be earmarked for and allocated to the commission for the purpose of the administration and enforcement of the duties, powers and functions of the commission.

(d) No winery license shall be issued except to persons who have not been convicted, and whose officers and principals have not been convicted, within a period of five (5) years preceding application of any felony or any violation of any state or federal laws relating to alcoholic beverages.

(e) Notwithstanding this section, a private individual in that person's own home may manufacture wine in an amount not in excess of that amount annually permitted as of March 22, 1973, by federal statute and regulations relative to household manufacture and consumption; provided, that the wine is for personal consumption by members of that person's household.

(f) (1) A winery licensed under this section may serve wine, with or without charge, as samples for tasting on the premises at the winery, and may sell wine at retail in sealed containers at the winery, but not for consumption in the bonded areas.

(2) A winery licensed under this section may donate wine without charge to nonprofit religious, educational or charitable institutions or associations.

(3) For purposes of this section, "premises" means any and all of the real property owned or leased by the winery, except for the bonded areas.

(g) A winery licensed under this section may exchange wine in bulk with other wineries and the bulk exchange, whether in return for wine or other consideration, shall not be considered a sale subject to tax.

(h) In addition to its own wine, a winery licensed under this section located in this state is authorized to sell the following items on the winery premises, and out-of-state wineries licensed under this section may sell the items as their state law permits:

(1) Juices or concentrates derived from juices, or any agricultural products;

(2) Items used in home winemaking; and

(3) Other gift, tourism, or wine-related items as defined by regulations duly promulgated by the commission.

(i) A winery licensed under this section located in this state may sell no more than five (5) cases or sixty (60) liters of wine to any single retail customer in one (1) day. It shall be legal for any purchaser of wine from a winery licensed under this section to transport into and within this state no more than five (5) cases or sixty (60) liters of wine in one (1) day. Any wine transported pursuant to this section must be accompanied by a bill of sale sufficiently identifying the nature, quantity, purchaser, date and place of purchase of the wine. Bills of sale purchased from out-of-state wineries licensed under this section must reflect that the wine was purchased for transport into this state and that Tennessee taxes have been paid. Any person transporting such wine in excess of five gallons (5 gals.) shall have with the shipment a receipt or other documentation demonstrating that the wine was purchased from a winery as licensed in this section.

(j) Any licensee or other person who sells, furnishes, disposes of, gives or causes to be sold, furnished, disposed of or given, any wine in this state or for transport into this state, to any person under the age of majority as established by § 57-4-203(b), commits a Class A misdemeanor.

(k) The commission is empowered and authorized to promulgate such rules and regulations as may be necessary to carry out the duties of the commission as provided in this section, including, but not limited to, procedures governing the production, sale and transportation of wine. The commissioner of revenue shall establish procedures governing the keeping of records for tax purposes and the payment of taxes by a winery licensed under this section; and for any failure to comply with the procedures, the commissioner shall notify the commission, which is authorized to revoke or suspend the license of any winery.

(l) It is the duty of the commissioner of agriculture to disseminate the best information available as to the methods of cultivation of crops that may be utilized in Tennessee for the production of wine and the methods of making such wines. It is also the duty of the commissioner to establish reasonable procedures requiring proper sanitary conditions about the winery and to certify that these conditions have been met before the commission issues any license. The commissioner shall establish reasonable procedures requiring the process of producing wine to be carried on under proper sanitary conditions and in a sanitary manner; and for any failure to comply with the procedures, the commissioner shall notify the commission, which is authorized to revoke or suspend the license of any winery.

(m) (1) Any nonprofit association organized to encourage and support grape growing and winemaking with ten (10) or more wineries licensed under this section as members shall be allowed to hold not more than eight (8) wine festivals per calendar year. Each festival shall not exceed a period of seventy-two (72) hours.

(2) Any winery licensed under this section participating in a festival authorized by this subsection (m) shall be allowed to transport, serve and offer complimentary samples of their wines for tasting at the festival. The complimentary sample size shall be restricted to a one ounce (1 oz.) serving with only one (1) sample per person for each type of wine. Any person serving wine at the festival shall possess a server permit from the commission as described in part 7 of this chapter.

(3) Any winery licensed under this section participating in a festival authorized by this subsection (m) shall be allowed to transport wine produced by that winery to sell at the festival for consumption off-premises.

(4) (A) Any nonprofit association authorized by this subsection (m) to hold a wine festival shall apply for a special occasion license as defined in § 57-4-102, in order for participating wineries licensed under this section to serve complimentary samples as described in subdivision (m)(2) and to sell wine produced by the wineries for consumption off-premises.

(B) Notwithstanding § 57-4-102(32)(A), a special occasion license issued for a wine festival authorized by this subsection (m) shall be for the duration of the festival for which application is made for a period not to exceed seventy-two (72) hours. A special occasion license issued pursuant to this subsection (m) shall only be available upon the payment of the fee as required by law for each separate day of the festival.

(C) A nonprofit association authorized to conduct a wine festival pursuant to this subsection (m) shall be permitted to hold the festival in any municipality or county of the state in the manner provided in subdivision (m)(5).

(5) A nonprofit association, as defined in subdivision (m)(1), is authorized to conduct a wine festival pursuant to this subsection (m) in a municipality or county of this state that has approved the sale of alcoholic beverages or has a licensed winery located in that municipality or county, subject to complying with all permit requirements of the municipality or county, and in all other municipalities or counties upon receiving approval of the legislative body of the municipality or county to hold such a festival at a location and in such manner authorized by such legislative body.

(n) If any provision of this section or application of this section to any person or circumstance is held invalid, the invalidity shall not affect other provisions or applications of the section that can be given effect without the invalid provision or application, and to that end the provisions of this section are declared to be severable.

(o) (1) As used in this subsection (o):

(A) "Farm" means a farming operation located in Tennessee consisting of commercial vineyards, fruit orchards or fruit gardens or any combination of such farming operations;

(B) "Farm wine producer" means a farm which produces its own locally grown product from a vineyard, fruit orchard or fruit garden or any combination of such farming operations to be used in the making of wine; and

(C) "Wine" means an alcoholic beverage containing a minimum of ninety-five percent (95%) of the product of vineyards, fruit orchards or fruit gardens grown and harvested at a farm as the wine being sold by the farm wine producer.

(2) A farm wine permit may be issued as provided in this subsection (o) to a farm wine producer, upon verified, written application to the commission on the proper form authorized to be prescribed and furnished by the commission, and the application may be granted by the commission, subject to the further restrictions of this chapter, other than § 57-3-106.

(3) Each applicant for a farm wine permit shall pay to the commission a one-time, nonrefundable fee in the amount of three hundred dollars ($300) when the application is submitted for review. The permit shall not be issued until a permit fee of one hundred and fifty dollars ($150) is paid to the commission by the farm wine producer, but issuance of the permit is exempt from the requirements of § 57-3-106. The commission shall deposit collections with the state treasurer to be earmarked for and allocated to the commission for the purpose of the administration and enforcement of the duties, powers and functions of the commission.

(4) The holder of a farm wine permit may:

(A) Transport or have transported produce grown on the farm to a winery licensed pursuant to subsection (b), for the manufacture, bottling and labeling of unfortified wine from such produce;

(B) Receive such wine back from the winery manufacturing, bottling and labeling the wine for the farm wine producer;

(C) Offer on the premises of the farm single servings of its wine, with or without charge, as tastings for each wine sample; and

(D) Sell at retail on the premises of the farm sealed containers of wine made from the produce of its vineyard, orchard or fruit garden in a designated building or area.

(5) [Deleted by 2014 amendment, effective May 24, 2014.]

(6) Subsections (d), (h), (i), (j), (m) and (n) which apply to wineries shall also apply to farm wine permittees.

(p) (1) A winery licensed under this section is authorized to receive produce from a farm wine producer grown on the farm for the purpose of manufacturing, bottling and labeling of wine for such producer. The wine label shall indicate the name of the farm where the fruit was grown and harvested and the name of the winery manufacturing, bottling and labeling such wine.

(2) Such winery shall be responsible for the payment of the state gallonage tax imposed pursuant to § 57-3-302 and the federal alcoholic beverage excise taxes due and owing on the wine bottled by the winery prior to the bottled wine leaving the winery's bonded premises.

(3) The winery is authorized to transport the wine from the winery back to the farm wine permit holder, notwithstanding § 57-3-107(b) or any other law to the contrary. It is lawful for common carriers to transport from the winery which manufactured, bottled and labeled such wine to the farm permit holder pursuant to an agreement or contract with a licensed winery.

(q) (1) A winery licensed under this section that has a total annual wine production of fifty thousand gallons (50,000 gals.) or less shall be authorized to obtain an additional self-distribution permit from the commission subject to the obligations imposed in this subsection (q).

(2) The commission shall not issue any self-distribution permit to a winery that has a registered distribution contract with a wholesaler licensed pursuant to § 57-3-203. If a winery holding a self-distribution permit enters into a distribution contract with a wholesaler or has total output in a calendar year which exceeds fifty thousand gallons (50,000 gals.), then such winery shall promptly surrender its self-distribution permit to the commission.

(3) A winery seeking a self-distribution permit under this subsection (q) may distribute not more than three thousand (3,000) cases of wine manufactured, produced, or bottled on the winery's premises to any licensee holding a license issued pursuant to chapter 4, part 1 of this title, located within one hundred (100) miles of the winery's premises where such wine has been manufactured, produced, or bottled.

(4) A winery engaged in self-distribution under this section shall be responsible for all taxes and records which are imposed upon a wholesaler under § 57-3-203 which result from any direct sales under this subsection (q).

(5) The commission shall impose no additional fee or charge for the issuance of a self-distribution permit under this section.

(r) (1) For purposes of this subsection (r), "satellite facility" means any facility or location other than the primary business location of a winery or farm wine producer.

(2) Any winery or any farm wine producer licensed by this section may conduct business at any two (2) satellite facilities in any jurisdiction where it is lawful to manufacture intoxicating liquors or intoxicating drinks pursuant to § 57-2-103(c) and (d). At its satellite facilities, the winery may conduct any business that is authorized at the licensed winery, except for the manufacturing and bottling of wine. At its satellite facilities, a farm wine producer may conduct any business that is authorized at the premises of the farm wine producer.

(3) Any winery licensed by this section or any farm wine producer shall obtain a satellite permit for each satellite facility utilized by the winery or farm wine producer from the commission in order to:

(A) Serve samples with or without charge;

(B) Sell wine for consumption on or off the permitted premises; and

(C) Sell any other products under subsections (h) and (o).

(4) A satellite permit issued to a winery or farm wine producer pursuant to this subsection (r) shall only be available upon the payment of a one-time application fee to the commission of three hundred dollars ($300) per satellite location and upon the payment of an annual license fee of one hundred fifty dollars ($150).

(5) (A) Any winery or farm wine producer licensed under this section that has obtained a satellite permit and elects to charge consumers for samples may only sell such samples that are manufactured by the winery or farm wine producer. Any wine provided at the satellite facility for sales, whether for tastings, for consumption on the premises, and for consumption off the premises, shall be obtained from a wholesaler licensed pursuant to § 57-3-203.

(B) A wholesaler of the winery or farm wine producer's products may permit a winery or farm wine producer to deliver for sale products which are sold on the premises of the winery, the farm wine producer, or the satellite facility; provided, that the wholesaler permitting such direct shipment shall include the amounts delivered in its inventory, report depletions for purposes of tax collection, and be responsible for the payment of taxes of such depletions.

(s) (1) Any winery or farm wine producer licensed pursuant to this section may qualify for and hold a license under chapter 4 of this title as a restaurant or limited service restaurant; provided, that notwithstanding chapter 4 of this title related to restrictions or prohibitions on licensees under chapter 4 of this title, a restaurant or limited service restaurant may sell for off-premises consumption, wine manufactured pursuant to this section at such location or at any other restaurant or limited service restaurant licensed under chapter 4 of this title that is owned by the same person.

(2) Notwithstanding any law, rule, or regulation to the contrary, any winery or farm wine producer licensed under this section may serve wine manufactured by the winery or the farm wine producer for consumption on the premises of the winery or farm wine producer.

(t) Any sale of wine authorized by this section for consumption on the premises at the winery or on the premises of the farm wine producer shall be subject to taxation pursuant to § 57-4-301(c) in addition to any sales tax which is due. Such taxes shall be paid and collected in the manner prescribed by § 57-4-301 and the regulations of the department of revenue promulgated under the authority of such section.