The following document was created from the MTAS electronic library known as MORe (www.mtas.tennessee.edu/more). This online library is maintained daily by MTAS staff and seeks to represent the most current information regarding issues relative to Tennessee municipal government.

We hope this information will be useful to you; reference to it will assist you with many of the questions that will arise in your tenure with municipal government. However, the Tennessee Code Annotated and other relevant laws or regulations should always be consulted before any action is taken based upon the contents of this document.

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The University of Tennessee
Municipal Technical Advisory Service
1610 University Avenue
Knoxville, TN 37921-6741
865-974-0411 phone
865-974-0423 fax
www.mtas.tennessee.edu

Liquor Licenses

Reference Number:

MTAS-1868

Revenue Class: Licenses and Permits

Fund: General

Account No.: 32220

Description: This is a privilege tax on those who engage in the business of selling retail alcoholic beverages for consumption on the premises. The tax varies by the type of establishment that sells the liquor by the drink.

Authorization: T.C.A. § 57-4-301 et seq.

Requirements or Restrictions: These same privilege taxes are paid twice by the businesses; once to the county and once to the municipality. Privilege tax increases imposed after fiscal year 2004 do not go to cities, but rather to the Alcoholic Beverage Commissioner to administer the law.

Current Rate: Municipalities are allowed to levy a privilege tax on the sale of alcoholic beverages for consumption on the premises. The taxes, paid annually, are:

Private club — $500
Convention center — $1,000
Premiere type tourist resort — $2,000
Historical performing arts center — $150
Urban park center — $150
Commercial passenger boat company — $1,250
Historic mansion house site — $150
Historic interpretive center — $150
Community theater — $150
Zoological institution — $150
Museum — $150
Establishment in commercial airport terminal — $1,500
Commercial airline travel club — $1,000
Public aquarium — $150
Motor speedway — $2,000
Sports Facility — $2,000
Theater — $150
Restaurant, according to seating capacity, on licensed premises:
- 40 – 74 seats — $650
- 75 – 125 seats — $750
- 126 – 175 seats — $925
- 176 – 225 seats — $975
- 226 – 275 seats — $1,100
- 276 or more seats — $1,200
Wine-only restaurant, according to seating capacity on licensed premises:
- 75 – 125 seats — $270
- 126 – 175 seats — $300
- 176 – 225 seats — $310
- 226 – 275 seats — $330
- 276 or more seats — $350
Caterers — $625
Hotels, according to room capacity, on licenses premises:
- 0 – 99 rooms — $1,000
- 100 – 399 rooms — $1,250
- 300 rooms and over — $1,500
Frequency of Payment: Annually.

Late Pay Penalty: N/A

Exemptions: No tax authorized or imposed by this section shall be levied or assessed from any charitable, nonprofit or political organization selling alcoholic beverages at retail pursuant to a special occasion license. T.C.A. § 57-4-301 (e).

Collection: The state notifies the municipality when renewal is due, then the municipality sends a letter to the establishment, which sends the revenue to the municipality.

Use Restrictions: None.