Rules & Regulations of the State of Tennessee
Title 1320 - Revenue
Subtitle 1320-04 - Miscellaneous Tax Division
Chapter 1320-04-06 - Local Option Liquor Rules
Section 1320-04-06-.07 - REGISTRATION AND TRANSFER OF BRANDS

Universal Citation: TN Comp Rules and Regs 1320-04-06-.07

Current through September 24, 2024

(1) In addition to paying applicable tax due each year, any manufacturer or importer distributing brands of alcoholic beverages in this state shall file with the Department of Revenue the following:

(a) Copies of all written contracts or renewal agreements with Tennessee wholesalers making sales of brands of alcoholic beverages distributed in this state by such manufacturer or importer.

(b) Any report or other forms required by the Commissioner of Revenue.

(c) A copy of the label from each brand of alcoholic beverages distributed in this state and copies of the approved ATF-Form 1649 of the Bureau of Alcohol, Tobacco and Firearms. Copies of the labels or forms need not be filed each year but shall be filed upon initial registration of such brand and at any time any change is made in such label or an additional filing is made.

(2) If any manufacturer or importer fails to register or registers improperly any brand, the Department of Revenue shall notify the manufacturer or importer to cease distribution in this state until such brand(s) is registered properly and also shall notify the Alcoholic Beverage Commission to suspend any permit issued to any such manufacturer or importer pursuant to the provisions of T.C.A. § 57-3-601 et seq. until such brand is registered properly. The following goods are contraband and shall be seized and sold by the Department of Revenue pursuant to the provisions of T.C.A. §§ 12-2-201 through 12-2-209 with applicable brand registration tax added to the price of any such goods sold:

(a) Any products located in this state of any manufacturer or importer who fails to register or registers improperly any brand(s) that are not disposed of within 30 days of the date of notification as provided above.

(b) Any products of any manufacturer or importer who fails to register or registers improperly any brand(s) that are shipped into this state after the date of notification as provided above.

(3) No manufacturer or importer or any successor to a manufacturer or importer shall be permitted to transfer a brand from one wholesale distributor to another or to terminate a contract prior to the expiration of its term without the written approval of the Commissioner. Requests for approval of a transfer or termination must be submitted in writing, and a copy of said request must at the same time be sent to the wholesale distributor in whose name the brand is then registered.

(a) Upon receipt from a manufacturer or importer or successor of a request to terminate a contract or to transfer a brand, the Department shall notify the requesting party and the wholesale distributor in whose name the brand is then registered that the parties have thirty (30) days from the date of receipt of the letter in which to cure any deficiencies. The brand shall remain in status quo during the thirty day period. If the manufacturer or importer or successor wishes to pursue its request for a termination or transfer at the end of the thirty-day period, it must notify the Department in writing that it wishes to proceed with the termination or transfer request.

(b) Upon receipt of the request to proceed, the Commissioner will make a preliminary determination as to whether sufficient evidence has been offered to establish a prima facie case of good cause, asserted in good faith, to terminate the contract or to transfer the brand.
1. Upon the Commissioner's preliminary determination either to approve or disapprove the contract termination or brand transfer, the Department shall so notify the manufacturer or importer or successor, the wholesaler in whose name the brand is then registered, and all other affected parties by letter. The parties shall then have an opportunity to request a hearing before the Department's decision to approve the determination or transfer becomes final. The parties shall have ten (10) days from the date of receiving notice in which to request a hearing.

2.
(i) If a hearing is requested and held, the termination of contract or transfer of brand will not take effect unless and until a determination is made by the hearing officer to approve the termination or transfer.

(ii) If determination is made by the hearing officer to disapprove the termination or transfer, the brand shall remain in status quo. Thereafter, failure on the part of any manufacturer or importer or successor to ship his wholesale distributor a reasonable amount of the brand sought to be terminated or transferred will be grounds for a revocation of that manufacturer's or importer's or successor's nonresident seller's permit or winery license.

(iii) Absent a request for a hearing, the Commissioner's preliminary determination concerning the termination of the contract or the transfer of the brand will become final and will take effect when the ten (10) day period has elapsed.

(c) Approval for a termination of contract or a transfer of brand shall be given by the Commissioner only if it is found by him that the termination or transfer is being proposed in good faith and for good cause and for no other reason.
1. "Good cause" means:
(i) Failure by a wholesale distributor to comply substantially with the requirements imposed or sought to be imposed upon him by the manufacturer, importer or successor, which requirements are not discriminatory as compared with the requirements imposed on other similarly situated wholesale distributors either by their terms or in the manner of their enforcement, and which requirements are not in violation of any law or regulation;

(ii) The failure by the wholesale distributor to act in good faith and in a commercially reasonable manner in carrying out the terms of the contract;

(iii) Voluntary abandonment of the contract;

(iv) Conviction of the wholesale distributor in a court of competent jurisdiction of an offense punishable by a term of imprisonment in excess of one (1) year;

(v) Any act by a wholesale distributor which substantially impairs the manufacturer's importers or successor's trademark or trade name;

(vi) The institution of insolvency or bankruptcy proceedings by or against a wholesale distributor, or any assignment or attempted assignment by a wholesale distributor of the contract or the assets of the distributorship for the benefit of creditors;

(vii) Failure of the wholesale distributor to pay to the manufacturer, importer or successor within thirty (30) days after receipt of notice any uncontested sums past due the manufacturer, importer or successor and relating to the contract; or

(viii) Failure of the wholesale distributor to comply with federal, state or local law or regulations applicable and material to the operation of the distributorship, which could reasonably impair the wholesaler distributor's continued future performance.

2. "Good faith" means honesty in fact in the conduct or transaction concerned.

Authority: T.C.A. §§ 47-25-1503, 57-3-301, 67-1-102, 67-1-107; Opinion of the Attorney General No. 90-65.

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.
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