Rules & Regulations of the State of Tennessee
Title 1320 - Revenue
Subtitle 1320-04 - Miscellaneous Tax Division
Chapter 1320-04-02 - Sales of Alcoholic Beverages for Consumption on the Premises
Section 1320-04-02-.02 - ANNUAL TAX AND BOND OF LICENSEE

Universal Citation: TN Comp Rules and Regs 1320-04-02-.02

Current through September 24, 2024

(1)

(a) Every licensee permitted to do business in the state shall, as a condition precedent to the granting of a license to sell alcoholic beverages for consumption on the premises, post security with the Commissioner of Revenue in the form of one of the following:
1. a corporate surety indemnity bond;

2. a cash deposit;

3. a bond properly secured by a certificate of deposit.

Such security shall be conditioned upon and be posted to insure the proper payment of all taxes administered by the commissioner of revenue and incurred in connection with the sale of alcoholic beverages for consumption on the premises for which the license applicant may become liable, including sales taxes on the sale of alcoholic beverages for consumption on the premises. All bonds must be filed on forms provided by the commissioner of revenue.

(b) For all licensees other than restaurants selling wine only the amount of such initial security shall be $10,000.

(c) For restaurants selling wine only the amount of such initial security shall be $2,000.

(2) After monthly reports pursuant to rule 1320-4-2-.05(2) have been received by the commissioner of revenue which cover the initial three (3) full months of a licensee's operating experience and upon request in writing by the licensee the required security will be adjusted to an amount equal to four (4) times the average monthly tax liability established during the initial three (3) full months operating experience of the licensee. The amount of security required may not be reduced to an amount which is less than $1,000.

(3) At any time following the completion of the licensee's initial three (3) months of operating experience, the commissioner may determine that the required security be adjusted to reflect four (4) times the average monthly tax liability. Additional security must then be posted in the form of a rider to a corporate surety bond, additional cash deposit or new or additional certificate of deposit, as may be appropriate.

(a) In the case of any such determination made based on the licensee's initial three (3) months of operating experience, any additional security required to be posted shall secure and be subject to any taxes, penalty and interest connected with the sale of alcoholic beverages for consumption on the premises, including applicable sales taxes, accruing against the principal(s) since the beginning of the effective period of the license.

(b) In all other cases, any additional security required to be posted shall secure and be subject to those taxes, penalty and interest connected with the sale of alcoholic beverages for consumption on the premises accruing against the principal(s) prospectively only.

(4) Any security posted with the commissioner shall not be released unless and until the commissioner has made a determination, through audit of the licensee, that all liability secured by the security has been paid or unless and until the applicable statute of limitations on the assessment of such liability has run, whichever occurs first.

(5) Failure to post security as required by the commissioner prior to any licensing period shall cause any application for a new or renewal license to be denied.

(6) The forfeiture or cancellation of all or any part of any security required to be posted, for any reason whatsoever, shall cause the license of a licensee to be automatically revoked.

(7)

(a) All the provisions of this rule shall apply to "wine only" restaurant licensees licensed under the provisions of T.C.A. § 57-4-101(n), except that after monthly reports pursuant to rule 1320-4-2-.05(2) have been received by the Commission of Revenue covering the initial three (3) full months of such licensees operating experience, a "wine only" restaurant licensee may request in writing that the required surety be adjusted to an amount equal to twenty percent of four (4) times the average monthly liability established during the initial three (3) full months operating experience of such licensee, if such average monthly tax liability is determined by the Commissioner of Revenue to warrant an adjustment to a maximum penal sum of less than $2,000.00. The amount of security required of a "wine only" restaurant licensee may not be reduced to an amount which is less than twenty percent of $1,000.00.

(b) At any time following the completion of the "wine only" restaurant licensees' initial three (3) months of operating experience, the commissioner may determine that the required security be adjusted to reflect twenty percent of four (4) times the average monthly tax liability. Financial security must than be posted in accordance with paragraph three (3) above.

Authority: T.C.A. §§ 67-1-102 and 57-4-302.

Disclaimer: These regulations may not be the most recent version. Tennessee may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.