Knowledgebase-Beer Permits: Restrictions on Fees, Taxes, Charges

Information Product

Title:Beer Permits: Restrictions on Fees, Taxes, Charges
Summary:MTAS was asked whether there are any limitations on the fees, charges, and costs a city beer board can levy on applicants for licenses.
Original Author:Bingham, Pamela
Product Create Date:03/01/2000
Last Reviewed on::03/01/2006
Subject:Beer--Boards; Beer--Licenses and permits
Type:Legal Opinion
Legal Opinion:

Reference Documents:

Text of Document: Your question is whether there are any limitations on the fees, charges and costs a city beer board can levy on applicants for licenses. Specifically, the City is interested in increasing the amounts it is charging for licenses and/or the licensing procedure. The answer to your question is the city beer board is limited by state law as to the total charges it may assess against an applicant for a license, and the city lacks authority to raise these fees under current Tennessee law. This conclusion is based on well-settled principles of law that cities and counties have only the powers expressly granted by or necessarily implied from the Constitution or through acts of the General Assembly. See, e.g.,Barnes v. City of Dalton, 216 Tenn. 400, 392 S.W.2d 813 (1965); Bayless v. Knox County, 199 Tenn. 268, 286 S.W.2d 579 (1956); KnoxTenn Theatres v. Dance, 186 Tenn. 114, 208 S.W.2d 536 (1948).

The State Attorney General has opined, for example that a county lacked the authority to charge an additional $15.00 fee in connection with conducting background checks on applicants for beer licenses. Op. Tenn. Atty. Gen. 97-077 (May 21, 1997).

It has also been found that a potential fee or tax imposed on persons who sell or serve beer in order to fund a program to train alcoholic beverage sellers or servers was not permissible. Op. Tenn. Atty. Gen. U96-009 (Feb. 8, 1996). The basis for that conclusion was that because there is no state provision that allows for such a requirement, neither a city nor a county could charge an additional fee or tax for participation in any training program.

T.C.A. 57-5-101 et seq. delegate to local governments the authority to issue
permits to businesses engaged in the sale, distribution, manufacture or storage of
beer. Specific fees and taxes may be levied upon that activity within the political subdivision’s respective jurisdictions.

T.C.A. 57-5-104(a) (1999 Supp.) requires an applicant for a beer permit to pay $250 to the city or county in which the applicant's place of business is located. In addition, a privilege tax of $100 is imposed annually on the selling, distributing, storing or manufacturing of beer in a city or county. T.C.A. 57-5-104 (b)(1) & (2) (1999 Supp.).

In another instance, the City of Winchester passed an ordinance that stated in pertinent part that "the city shall levy a fee in the amount of $500.00 to be paid by the applicant at the time he files his application for a permit to sell beer." The ordinance also provided that "[a]ll beer permits shall be renewed at the same time each year. The fee for this renewal is $100.00 per year and the date of renewal shall be specified on the beer permit."

In opining that this ordinance was not valid, the State Attorney General concluded that the county beverage control board was not permitted to charge an application fee other than that authorized by state statute:

A city has no powers except such powers as are given to it by its charter and general law, Barnes v. City of Dayton, 216 Tenn. 400, 410, 392 S.W.2d 400 (1965); municipalities have no authority other than that granted by the legislature, Nichols v. Tullahoma Open Door, 640 S.W.2d 13, 18 (Tenn.Ct. App.1982).... the Tennessee Supreme Court in Brooks v. Garner, 566 S.W.2d 531, 532 (1978), said that ‘it is elementary that statutes prescribing how delegated police power may be exercised by municipalities are mandatory and exclusive.’ Op. Tenn. Atty. Gen. 85-061 (March 7, 1985).

This view is codified in the Tennessee Code Annotated. Counties and cities may not impose any tax or fee under state law other than those that are specifically authorized. T.C.A. 57-6-112 provides:

Exclusiveness of tax. -- Any county or municipality which collects the tax as provided herein shall not be authorized to levy any other sales tax, inspection fee or special tax of any type or kind except the privilege license fee authorized by chapter 5 of this title on the sale of beer either at retail or wholesale.

In summary, no monetary conditions or other requirements, other than those set forth in T.C.A. 57-5-101 et seq., may be imposed on an applicant in order to receive a beer permit from a city or county.

Please let me know if you need further information in this matter.

Please remember that these legal opinions were written based on the facts of a given city at a certain time. The laws referenced in any opinion may have changed or may not be applicable to your city or circumstances.

Always consult with your city attorney or an MTAS consultant before taking any action based on information contained in this database.