Temporary Liquor License Privileges.
The Liquor and Cannabis Board (LCB) is currently providing certain liquor licensees with temporary alcohol sales privileges during the COVID-19 pandemic.
Curbside Service, Takeout, and Delivery. Temporary privileges include privileges related to curbside service, takeout, and delivery of liquor products by certain licensees. For example, among other temporary privileges, restaurant licensees may temporarily sell factory sealed bottles and cans of beer, wine, and spirits to customers in combination with the sale of to-go food or by delivery with a food order. Under the LCB's guidance, spirits sold by a restaurant licensee for curbside service, takeout, or delivery must be in factory sealed bottles or meet the requirements for premixed cocktails, and must be sold in combination with food.
Premixed Alcoholic Drinks. In accordance with the LCB's guidance, restaurants with a spirits, beer, and wine license may temporarily sell premixed alcoholic drinks (cocktails) for consumption off the licensed premises, subject to requirements. Among the requirements is that the licensee must ensure a complete meal is ordered with the premixed cocktail order and prepared on the licensed premises. Also, premixed cocktails must be packaged in a container with a secure lid or cap and in a manner designed to prevent consumption without removal of the lid or cap. Under the LCB's guidance, additional requirements apply to deliveries of premixed cocktails.
Food Service Requirements for Certain Liquor Licensees.
Certain liquor licensees including restaurants, certain theaters, and hotels are required in statute to have food service in combination with alcohol sales. The LCB's rules establishing food service requirements require certain licensees like spirits, beer, and wine restaurants, hotels, and certain theaters to serve eight complete meals. The LCB's rules define a "complete meal" as an entree and at least one side dish.
For restaurants that sell only beer and/or wine but not spirits, they are required to offer "minimum food service" to customers instead of the complete meal requirements. For distilleries and craft distilleries, they must provide, for free or for a charge, food offerings to customers consisting of a combination of small serving food items to include a mix of hors d'oeuvre-type foods, cheeses, fruits, vegetables, deli-style meats, chips, pretzels, nuts, popcorn, crackers, or similar items.
Required Signature for Home Deliveries.
The LCB's rules predating the COVID-19 pandemic authorize certain licensees to sell and make home deliveries of liquor to customers, subject to a variety of requirements. One requirement is that a private carrier must obtain the signature of the person who receives liquor upon delivery. However, the LCB's guidance during the COVID-19 pandemic provides that the LCB is temporarily relaxing enforcement of the signature requirement. The guidance provides that licensees with a delivery endorsement may choose to photograph the customer's identification, or use other devices such as an application scanning the identification, in lieu of gaining a physical signature to document delivery to the customer.
Beer and Wine Sampling at Farmers Markets.
If a qualifying farmers market and participating winery or microbrewery both hold the appropriate endorsements, the winery or microbrewery may offer samples to customers under a variety of conditions and limitations. One of the requirements is that a winery or microbrewery must have food available for customers to consume while sampling beer or wine, or must be adjacent to a vendor offering prepared food. During the COVID-19 pandemic, the LCB is temporarily relaxing enforcement of food-related requirements associated with alcohol sampling at farmers markets.
Spirits Taxes.
Taxes on retail sales of bottled or packaged spirits sold for off-premises consumption include a spirits sales tax of 20.5 percent of the selling price and a spirits liter tax of $3.7708 per liter, both paid by the consumer. When retailers purchase spirits for later resale to consumers for consumption on the retail premises, the retailer pays a spirits sales tax of 13.7 percent of the purchase price paid by the retailer and a spirits liter tax of $2.4408 per liter.
Temporary Liquor License Privileges.
Several liquor license privileges similar to privileges the Liquor and Cannabis Board (LCB) is temporarily providing to liquor licensees during the COVID-19 pandemic are added to law through July 1, 2023. Licensees must generally obtain an endorsement at no cost from the LCB to engage in the authorized activities, but licensees are not required to wait for the LCB to finalize rules and other actions, such as the completion of information systems changes, to engage in the authorized activities.
Curbside Service, Takeout, and Delivery. The following liquor licensees may sell alcohol products at retail for curbside service, takeout, and delivery:
Premixed Alcoholic Drinks and Kits. Spirits, beer, and wine restaurant licensees may also sell premixed servings of spirits containing other alcohol authorized to be sold under the terms of their license or nonalcoholic mixers, or both, for curbside service, takeout, and for delivery, pursuant to rules the LCB may adopt regulating these sales. Spirits, beer, and wine restaurant licensees may also sell kits containing bottled or packaged spirits, other alcohol authorized to be sold under the terms of their license, or nonalcoholic mixers, or both, for takeout, curbside service, and for delivery. It is provided that this new authorization does not allow the sale of full bottles of spirits by restaurant licensees for off-premises consumption, with the exception of mini-bottles as part of kits.
Mini-bottle sales as part of kits sold by restaurants are exempted from the spirits license issuance fee and spirits taxes, and an explicit exemption from the requirements for tax preference performance statements is included. "Mini-bottles" are defined as original factory sealed containers holding not more than 50 milliliters of a spirituous beverage.
Distillery and craft distillery licensees may sell premixed servings of spirits containing other alcohol authorized to be sold under the terms of their license or nonalcoholic mixers, or both, for takeout, curbside service, and for delivery. Distillery and craft distillery licensees may also sell kits containing bottled or packaged spirits, other alcohol authorized to be sold under the terms of their license or nonalcoholic mixers, or both, for takeout, curbside service, and for delivery. The LCB may establish by rule the manner in which spirits, other alcohol, and nonalcoholic mixers sold for off-premises consumption must be provided by distillers and craft distillers, so long as the requirements do not increase the underlying food service obligations for distillers and craft distillers provided in law.
Wine Drinks. Restaurant licensees are temporarily also authorized to sell wine by the glass and premixed wine drinks for takeout or curbside service and for delivery. Restaurant licensees who may sell spirits may also sell premixed wine and spirits drinks for takeout or curbside service and for delivery. The LCB is granted rulemaking authority to establish the manner in which wine by the glass for off-premises consumption must be provided.
Growlers. Licensees that were authorized by statute or rule before January 1, 2020, to sell growlers for on-premises consumption may sell growlers for off-premises consumption through curbside, takeout, or delivery service. Sales of growlers must meet federal Alcohol and Tobacco Tax and Trade Bureau requirements.
Without obtaining an endorsement, beer and wine specialty shops and domestic breweries and microbreweries may sell prefilled growlers for off-premises consumption through takeout, curbside service, and for delivery, if prefilled growlers are sold the same day they are prepared for sale and not stored overnight for sale on future days. "Growler" is defined as a sanitary container brought to the premises by the purchaser or furnished by the licensee and filled by the retailer at the time of sale.
Temporary Rulemaking Authority. The LCB may adopt rules governing the manner in which the new activities must be conducted. The LCB must adopt or revise current rules to allow for outdoor service of alcohol by on-premises licensees holding the following liquor licenses:
Signature Upon Delivery. Upon delivery of any alcohol product authorized to be delivered under the temporary liquor privileges, the signature of the person age 21 or over receiving the delivery must be obtained. It is specified that any temporary authorization or relaxation of requirements provided by the LCB, in effect on the effective date of the act, related to authorizing the photographing or scanning of customer identification in lieu of obtaining a physical signature to document liquor product delivery or verify the age of customers, expires at the end of the Governor's proclamation of emergency related to COVID-19.
All of the above new authorizations and endorsements expire on July 1, 2023.
Additional Rulemaking by the Liquor and Cannabis Board, Revisiting Food Service Requirements.
The LCB must consider revising current rules in order to provide greater flexibility regarding food service menu requirements that businesses holding a liquor license issued by the LCB must provide in conjunction with alcohol sales. It is specified that the scope of the rules does not apply to licensees that were not required to provide food service under rules in effect on January 1, 2020.
Beer and Wine Sampling at Farmers Markets.
It is specified that any temporary authorization or relaxation of statutory requirements provided by the LCB related to food requirements associated with wine and beer sampling at farmers markets expires at the end of the Governor's proclamation of emergency related to COVID-19.
Contract for Independent Study of Impacts.
The LCB must contract with an independent entity to conduct a study of the impacts of the new privileges granted to businesses with liquor licenses. The study must examine relevant issues including, but not limited to, the following:
The study must be started by January 1, 2022. A report with findings and any recommendations must be provided to the Legislature and the Governor by December 1, 2022.
The amended bill makes the following changes to the substitute bill:
(In support) This is an important bill for restaurants and the hospitality industry. The temporary privileges, such as for alcohol sales to-go and for outdoor dining, are a lifeline. These allowances have been safely used while protecting the community. Recovery will take several years and allowances for takeout and delivery will continue to be instrumental. The study required by the bill will provide operators, communities, and the Legislature with tools to make decisions about the temporary allowances. So far, there are not problems with the allowances. Wineries and breweries strongly support the temporary allowances. Wineries, breweries, and distilleries have been disproportionately negatively impacted by the pandemic, and this bill is a small step toward recovery and provides certainty to businesses. Breweries appreciate the allowances around growlers, which are helping breweries survive the pandemic. The reasoning behind removing the existing food requirement associated with wine and beer sampling at farmers markets is there are usually numerous food vendors at farmers markets and the amount of beer or wine tasted is small. The Liquor and Cannabis Board believes the need for this bill is critical. The Department of Commerce reported a 63 percent decline in the leisure and hospitality sector during the pandemic. The two-year duration of the temporary privileges results from extensive discussion and debate, and is a balanced approach. Limiting the allowances to one year in duration would undermine the study included in the bill, which is important to the proposal. The two-year timeframe allows for the gathering of data and a credible, valid review of the activities. The details of the study originated within the prevention community. There are local governments in strong support of this bill. Local governments have worked on increasing opportunities for sidewalk cafes and eateries, and see that the current temporary allowances have unleashed the entrepreneurial spirit of local operators and been critical to saving jobs and local businesses.
(Opposed) The last sentence of the intent section, referencing the promotion "of an orderly market for liquor sales," is objectionable and should be removed. This phrase has been intentionally removed from the law over the years because it is used to interfere with and prevent competition in the industry by smaller businesses. The liquor initiative that passed in 2011 directed the regulatory focus to be on public safety considerations, not orderly market considerations. There is disappointment this "orderly market" phrase is now reappearing. Regarding the issue of removing food requirements associated with wine and beer sampling at farmers markets, there are many vendors offering food for sale at farmers markets and they would prefer that wineries or breweries not give away free food as part of sampling.
(Other) Distillers support aspects of the bill but ask that the bill be amended to also provide distillers with a temporary privilege to sell mixed drinks to-go, like is included for restaurants. There should be parity in providing the temporary privileges. Distillers are hard hit by the pandemic and a number have closed within the last year. Distillers should not be left out of this temporary privilege. Mixed drinks can be sealed in secure containers for off-premises consumption and could be offered in conjunction with food. The bill uses the term "cocktail," which should be defined. The prevention community sees the need for this bill and is not opposed. But the prevention community recommends moving the sunset of the temporary privileges to 2022 from 2023. It is hard to predict the future, but there have recently been positive developments within a short time. The vaccine situation is more promising than previously expected. Also, the recently passed federal COVID-19 relief package will benefit businesses. Reconsider the sunset and if the need to continue the temporary allowances exists next year, the allowances can be extended at that time.