Original Author: Hemsley, Sid
Date of Material: 08/15/1997

Subjects(s):
Alcoholic beverages
Alcoholic beverages--Laws and regulations
Beer
Beer--Laws and regulations
Taxes--Beer
Taxes--State shared

City's Share of the State Beer Tax

Reviewed Date: 07/15/2021
Summary:
MTAS was asked whether a city can prohibit the sale of beer and if that decision would jeopardize the city's share of the state beer tax.


August 15, 1997

You have the following questions:

1. Can the city legally prohibit the sale of beer? Yes.

2. If the city does not permit the sale of beer, does that decision jeopardize the city's share of the state beer tax? No.

Question 1

Tennessee municipalities clearly have the authority to permit, or to entirely prohibit, the sale of beer. However, the prohibition or the permission, whichever the case may be, should be expressed by ordinance. In the latter case the ordinance should regulate the conditions under which beer can be sold. Municipalities have considerable authority to regulate the time, place and manner of the sale of beer. I will be glad to provide you more information in that area if you choose. However, as I understand it, the city wants to entirely prohibit the sale of beer. I have drafted a simple ordinance that accomplishes that goal.

Question 2

All cities in Tennessee under Tennessee Code Annotated, section 57-5-205, receive a share, on a per capita basis, of the per barrel tax on the manufacture, transportation and sale of beer. Whether or not any particular municipality allows or permits the sale of beer has nothing whatever to do with its share of the per barrel tax under that statute.

Let me know if I can help you further in this or any other matter.



Sincerely,



Sidney D. Hemsley
Senior Law Consultant

SDH/