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Subcommittee advances bill to remove 'liquor by the drink' tax on winery tastings to match distilleries
Summary
The subcommittee approved a bill to exempt small wineries from the liquor-by-the-drink tax when selling a glass onsite; winery owner testimony said the tax creates a competitive disadvantage relative to craft distilleries.
The Department and Agency Subcommittee approved House Bill 160, which would remove the liquor-by-the-drink (LBD) tax for small wineries when they serve a glass of wine at their tasting rooms, aligning treatment with craft distilleries and breweries.
Representative McCallman, sponsor of the bill, said the change would level the playing field for small, local wine producers who operate tasting rooms and sell glasses of wine to visitors. He introduced Kip Summers, president and co-owner of Arrington Vineyards, who testified in support.
"By law, [distilleries] can serve a beverage made with their product without having to charge the 15% liquor by the drink tax... All we're asking with this bill is that you would give us the opportunity to compete fairly with other small businesses that produce and market their product locally," Summers told the committee.
Summers said Tennessee wineries face unique challenges and that parity with distilleries and breweries would help local agricultural producers and tourism efforts. The sponsor asked the committee for a favorable recommendation and the subcommittee voted to send the bill to the full committee.
The measure is intended to remove the additional tax layer which, sponsors argued, imposes a competitive disadvantage on wineries that sell by-the-glass on-premises.
