In 2021, the South Carolina General Assembly passed a few bills pertaining to alcohol. Below are a few highlights from each bill. If you have any questions, please contact the SCDOR ABL Section at 803-898-5864.
Certain License or Permit Applications – New Electronic Filing Option under Penalties of Perjury |
House Bill 4100, Part IB, Section 109, Proviso 109.17 (Act No. 94)
Effective Date: This temporary proviso is effective for State fiscal year July 1, 2021 through June 30, 2022. It will expire June 30, 2022, unless reenacted by the General Assembly in the next legislative session.
This temporary proviso provides that the Department may require a statement subject to penalties of perjury instead of a statement under oath for the purpose of allowing certain applications for licenses or permits to be filed electronically.
Advance Referendum Notification by Election Commission to SCDOR | House Bill 4100, Part IB, Section 109, Proviso 109.18 (Act No. 94)
Effective Date: This temporary proviso is effective for State fiscal year July 1, 2021 through June 30, 2022. It will expire June 30, 2022, unless reenacted by the General Assembly in the next legislative session.
This temporary proviso provides that a county or municipal election commission must notify the Department 60 days prior to a referendum on the imposition of a local sales tax or local option permit.
Winery Satellite Tasting Rooms | Senate Bill 619, Section 3 (Act No. 60)
Effective Date: May 17, 2021
Overview. Code Section 61-4-748 was added and provides that notwithstanding any other provision of law, a holder of a winery license, who meets certain investment and job creation requirements, is eligible for a manufacturer’s satellite certificate. A manufacturer’s satellite certificate allows a winery to establish up to three wholly-owned satellite locations for the tasting and sale of wine produced by the winery, or imported by the winery as the primary American source of supply.
Before operating a satellite tasting room, a winery must, on or after January 1, 2021, invest $400 million in South Carolina in a Tier III or Tier IV county, as determined by Code Section 12-6-3360(B), and create at least 300 new jobs in South Carolina. The number of satellite tasting rooms a winery may operate is limited by the number of gallons of wine and alcoholic beverages the winery produces or bottles in South Carolina per calendar year: one satellite tasting room for 10 million gallons produced or bottled; two satellite tasting rooms for 20 million gallons produced or bottled; and three satellite tasting rooms for 30 million gallons produced or bottled.
The winery must submit to the Department separate applications for each tasting-room premises, as provided by Code Sections 61-2-90 and 61-2-140(C), and pay a biennial permit fee of $5,000 per permitted tasting-room premises. No more than one tasting-room premises may be permitted in any one county, and each permit application is subject to protest as provided for in Code Section 61-4-525 for beer and wine permit applications.
Operational Requirements. On a satellite tasting-room premises, the winery may conduct tastings of or sell only wine that is produced or bottled by the winery, produced and packaged for the winery within or outside of South Carolina, or for which the winery is the exclusive agent in the United States of an out-of-state vintner. Winery satellite tasting-rooms must:
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Charge a consumer a tasting fee to participate in a tasting, or the customer may not purchase any wine for off-premises consumption;
- Not provide more than 10 ounces of wine per day to an individual for on-premises consumption, or sell more than the equivalent of six 750 milliliter bottles of wine per calendar month to an individual for off-premises consumption;
- Sell wine for off-premises consumption at a price approximating retail prices generally charged for identical wine in the county where the tasting room premises is located;
- Remit applicable sales, use, and other state and local taxes for each of the licensed tasting-room premises;
- Ensure that all wine handled, tasted, or sold in a satellite tasting-room premises is purchased and delivered only from licensed wholesalers;
- Maintain all liability insurance required by Code Section 61-2-145;
- Not provide tastings to, or sell wine to, an intoxicated person or a person under the age of 21; and
- Open to the public not before 8:00 a.m. and close to the public at 5:30 p.m.
Penalties for any violations are specified in Code Section 61-4-250.
Other Licenses Held by Winery Satellite Tasting Rooms. Tastings and sales of wine under a permit for a satellite tasting-room premises do not prohibit a winery that also holds a brewery, micro-distillery, or liquor manufacturer license from applying for or holding any permit or license available to other breweries, micro-distilleries, or liquor manufacturers that allow the tasting or sale of beer or alcoholic liquor.
Tours, Tastings, and Retail Sales at Micro-Distilleries and Manufacturers | Senate Bill 619, Section 10 (Act No. 60)
Effective Date: May 17, 2021
Code Sections 61-6-1140 and 61-6-1150, concerning tours, tastings and retail sales at micro-distilleries and manufacturing facilities, have been amended to make the following changes:
Tours and Tastings. Code Section 61-6-1140 has been amended to provide that a micro-distillery or manufacturer of alcoholic liquor may not charge for alcoholic liquors consumed at a tasting, but may charge for the tour that is required in conjunction with the tasting. The amount charged for a tour must be on a scale that accords with the amount of alcoholic liquors for on-premises consumption that is dispensed to consumers, beginning with a base tour price that corresponds with a tasting of one ounce of alcoholic liquor and increases incrementally by one-half ounce. Liquor-by-the-drink excise tax is not assessed on the tour or the tasting of alcoholic liquors in conjunction with the tour. Additionally, the maximum amount of alcoholic liquors that may be dispensed in a tasting has been increased from three ounces to four and one-half ounces per customer per day. Previously, a micro-distillery or manufacturer was permitted to charge for alcoholic liquors consumed at a tasting and was required to collect and remit the liquor-by-the-drink excise tax.
Code Section 61-6-1150(10) has been amended for a licensed micro-distillery or manufacturer that does not have a restaurant operation to allow minors into a tasting area, provided that the minor is accompanied by an adult. Previously, minors were not allowed in a tasting area.
Micro-Distillery or Manufacturer with Restaurant Operations. Code Section 61-6-1140 has been amended to add subsection (9), which provides that a licensed micro-distillery or manufacturer that is to have an area physically partitioned so as to be bona fide engaged primarily and substantially in the preparation and serving of meals, (restaurant operation) as allowed by new Code Section 61-6-1155 (Act No. 60, Section 9), must comply with the discount pricing provisions of Code Section 61-6-4550, and may not dispense alcoholic liquors for free at a tasting. The prohibition against tastings occurring in conjunction with the service of food in a restaurant setting, which was previously contained in Code Section 61-6-1140(7), has been removed.
Specified provisions contained in Code Section 61-6-1150 are inapplicable to a micro-distillery or manufacturer with a restaurant operation. These provisions include:
- Sell of promotional items. Code Section 61-6-1150(7);
- Sell or storage of other merchandise in or from the room in which alcoholic liquors are sold or tasted. Code Section 61-6-1150(8);
- Sell of mixers. Code Section 61-6-1150(9); and
- Allowance of minors in the portion of the facility where tastings are occurring. Code Section 61-6-1150(10).
Retail Sales. Code Section 61-6-1150 has been amended to increase the maximum amount of alcoholic liquors that may be sold by a micro-distillery or manufacturer to a consumer for off-premises consumption from the equivalent of three 750 milliliter bottles per day to the equivalent of six 750 milliliter bottles per day.
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Alcoholic Liquor Producer or Manufacturer – On Premises Consumption of Alcohol | Senate Bill 619, Section 9 (Act No. 60)
Effective Date: May 17, 2021
Code Section 61-6-1155 was added and provides that, in addition to production or manufacture of alcoholic liquor for sale to a wholesaler, a holder of a valid micro-distillery or manufacturer license is authorized to sell alcoholic liquors distilled at the licensed premises to consumers for on-premises consumption, provided that it is served within an area that is bona fide engaged primarily and substantially in the preparation and serving of meals, as required by Code Section 61-6-1610.
Food Establishment Operations.
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Designated Area. Sales for on-premises consumption of alcohol liquor by the drink in an alcoholic liquor producer’s or manufacturer’s premises must be in an area for food establishment operation that is physically partitioned from the distilling and manufacturing operation. The physical partition may be a wall or a permanent divider that prevents the general public from freely entering the distilling and manufacturing operation area. The micro-distillery or manufacturer may not sell or allow the consumption of alcoholic liquor by the drink in that part of the premises designated and permitted for distilling and manufacturing operation.
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Allowance for Other Licenses. The restaurant operation may apply for separate beer and wine licenses, on-premises consumption of alcoholic liquor by the drink, and local option permits authorizing the purchase for resale of beer, wine, and alcoholic liquors from wholesalers through the three-tier distribution chain.
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Sale of Bottles of Alcoholic Liquor. The restaurant operation may sell bottles of alcoholic liquor produced on the licensed premises, subject to the limitations provided in Code Sections 61-6-1140 and 61-6-1150. Such sales of alcoholic liquor for off-premises consumption are not considered in determining whether the restaurant operation is bona fide engaged primarily and substantially in the preparation and serving of meals.
Operational Requirements. A micro-distillery or manufacturer with a restaurant operation is subject to inspection, determination and reporting by the South Carolina Law Enforcement Division, and must meet the following operational requirements:
- Remit the appropriate amount of excise taxes for alcoholic liquor distilled and sold at retail;
- Post information at each entrance, each exit, and in places in a micro-distillery or manufacturer seen during a tour that states the alcoholic content by volume of the various types of alcoholic liquors available in the micro-distillery or manufacturer and the penalties for convictions for driving under the influence, unlawful transport of an alcoholic container, and unlawful transfer of alcohol to minors;
- Sell its alcoholic liquors at a price approximating retail prices generally charged for identical beverages in the county where the permitted premises are located;
- Maintain the books, records, and bank accounts of the restaurant operation separately from the books, records, and bank accounts of the distilling and manufacturing operations, and allocate expenses common to both operations in a reasonable manner;
- Maintain a physical partition between the distilling and manufacturing operation and the restaurant operation; establish appropriate protocols to ensure that a consumer sold or served alcoholic liquors pursuant to this section is not intoxicated and is not under 21 years of age;
- Remit to the Department the appropriate amount of sales, use, and other state and local taxes applicable to retail sales of beer, wine, and liquor;
- Provide approved alcohol enforcement training for employees who serve alcoholic liquors;
- Maintain all liability insurance as required under Code Section 61-2-145;
- Comply with all state and local laws concerning the hours of operation applicable to eating and drinking establishments and other food service establishments holding permits to sell alcoholic liquors by the drink; and
- Comply with the discount pricing provisions of Code Sections 61-4-160 and 61-6-4550, as applicable.
If a micro-distillery or a manufacturer ceases distilling or manufacturing on the permitted premises, the Department shall terminate each permit and license issued in connection with the on-premises consumption of beer, wine, or alcoholic liquor. The micro-distillery or manufacturer may re-apply for the permits and licenses if they resume distilling or manufacturing operations.
Alcohol Content Restriction for Wines Increased from 16% to 16.5% | Senate Bill 619, Sections 4 through 8 (Act No. 60)
Effective Date: May 17, 2021
Act 60, Sections 4 through 8, amend certain code sections relating to wines by increasing the stated percent alcohol from 16% to 16.5%. The amended code sections are summarized below.
Location of Certain Wines Sales. As amended, Code Sections 61-4-770 and 61-6-1540 require wines containing more than 16.5% alcohol by volume to be sold only in licensed alcoholic liquor stores or in establishments licensed to sell and permit consumption of alcoholic liquors by the drink. Previously, these code sections applied to wines containing more than 16% alcohol by volume.
Sampling of Wines. Code Sections 61-6-1035 and 61-6-1640, concerning sampling of wines by customers in a retail alcoholic liquor store or an establishment licensed to sell alcoholic liquor by the drink, have been amended to increase the threshold percent alcohol for samples from 16% to 16.5%.
Sample of Wines to Retailers by Manufacturers and Wholesalers. Code Section 61-6-1650, concerning the provision of samples of wine to retailers by manufacturers and wholesalers, has been amended to increase the percent alcohol for samples from 16% to 16.5%.
Wine Sold at Wineries – New Category of Winery and Increased Alcohol Content | Senate Bill 619, Section 2 (Act No. 60)
Effective Date: May 17, 2021
Code Section 61-4-720, which concern sales of wine by a licensed winery located in South Carolina, has been amended and subdivided into new subsections (A), (B), and (C). Subsection (A) increases the maximum allowable percent alcohol from 16% to 16.5% for wines sold on the winery premises, or shipped and delivered to consumers’ homes, provided that the licensed winery is the primary American source of supply for the wine sold, or the wine is produced on the licensed premises. Previously, the wine was required to be made on the premises, and the maximum allowable percent alcohol was 16%.
New subsection (B) provides that if the wine is not produced on the winery’s licensed premises in South Carolina, but the winery is the primary American source of supply for the wine, then the winery may sell up to 24 bottles of wine each month directly to a South Carolina resident for personal use and not resale.
A provision allowing a winery to provide wine tasting samples, with or without cost, is unchanged and is now contained in subsection (C).
Brewery Sales for Off-Premises Consumption – Volume Restriction Increase Extended | House Bill 4006 (Act No. 81)
Effective Date: May 17, 2021
Code Section 61-4-1515(E) authorizes a brewery to sell beer brewed on premises to individuals for off-premises consumption. Act No. 167 of 2020 amended Code Section 61-4-1515(E) to increase the restriction on the quantity of beer that may be sold per day for off-premises consumption from the equivalent of 288 ounces in total to the equivalent of 576 ounces in total. The volume restriction increase was originally scheduled to be repealed on May 31, 2021. Act No. 81 postpones the repeal until May 31, 2022.