Indiana Augments 30,000 Barrel Limit for Non-Indiana-Ruled Brewers
30,000 barrels of beer is the present limit for a Brewer’s permit under the...
Category: Licensing and Permits
Classifying Your Beverage Isn’t a Matter of Taste – It’s About Money
Anyone who’s read Richard Unger’s wonderful work “Beer In the Middle Ages and the Renaissance” understands that the medieval history of beer isn’t just taste, quality, ingredients, and anecdotes about witches and overindulging monks – it’s money. Fermented beverages and laws involving them are inextricably linked with the government’s purse strings.
Alcohol production and taxes are fait accompli, which is the origin and explanation for the majority of regulatory structures and laws that control production, distribution, and consumption.
So when the Nebraska Supreme Court recently took up the question of whether a flavored malt beverage (think Mike’s Hard Lemonade or Smirnoff Ice) was a beer or a spirit, they weren’t indulging in the kind of philosophical exercise that you’d expect in the waning hours of a meeting at your local homebrewers’ association. The Nebraska Supreme Court was determining how much the state was going to make off a gallon of the stuff and noted the point in the first sentences of their opinion in Project Extra Mile v. The Nebraska Liquor Control Commission:
We are asked to decide whether a flavored malt beverage is a beer or spirit under the Nebraska Liquor Control Act. It makes a difference. Beer is taxed at 31 cents per gallon; spirits are taxed at $3.75 per gallon.
The debate about flavored malt beverages usually concerns whether they’re improperly aimed at the youth market and has been around for a while. In 2007 the New York Times wrote about them, and in 2009, the National Conference of State Legislatures posted a short article on the debate that’s a decent primer.
In Project Extra Mile, the Nebraska Supreme Court was faced with a few questions based on a lack of legislative action.
The Nebraska legislature hadn’t passed a bill on how to classify flavored malt beverages. In fact, a bill had been introduced to follow the federal regulations on the subject back in 2006 and it was never passed by the legislature. But, even though the legislature hadn’t decided, the Nebraska Liquor Control Commission still needed to determine how to tax FMBs under the Nebraska Liquor Control Act because they were served in, and imported to, Nebraska – they couldn’t hide their head in the sand. And the NLCC determined FMBs were beer by doing just what the legislature had attempted to do by statute, adopting a rule enacting the Tax and Trade Bureau’s regulations from 27 C.F.R. parts 7 and 25:
7th Circuit Upholds a Ban on In-State Retailers Shipping to In-State Customers via Third-Party Carrier
1850 Cowperthwait – Mitchell Map of IndianaSince Granholm v. Heald, we’ve seen a piecemeal erosion of state imposed restrictions on the interstate shipment of wine that hasn’t really found its way to an express inclusion of beer an liquor. People should be excited about these cases. Not just because they’re changing the way individuals have access to a new, freer, market for alcohol, but also because they’re consistently decided on grounds that represent a tour de force in Constitutional law pitting citizens utilizing the commerce clause or the supremacy clause against some state restriction grounded in the state’s rights under the 21st Amendment.
In one of these cases, the 7th Circuit recently found against Indiana wine retailers who wanted to ship directly to in-state customers in violation of an Indiana law stating that retailers needed to deliver the product themselves and couldn’t use a third-party carrier:
IC 7.1-3-10-7 Scope of permit Sec. 7. … (c) A liquor dealer may deliver liquor only in permissible containers to a customer’s residence or office in a quantity that does not exceed twelve (12) quarts at any one (1) time. However, a liquor dealer who is licensed under IC 7.1-3-10-4 may deliver liquor in permissible containers to a customer’s residence, office, or designated location. This delivery may only be performed by the permit holder or an employee who holds an employee permit. The permit holder shall maintain a written record of each delivery for at least one (1) year that shows the customer’s name, location of delivery, and quantity sold.
The case, Lebamoff Enterprises, Inc. v. The Indiana Alcohol and Tobacco Commission, upholds a district court ruling and finds that the proscription against retailers using third-party carriers is valid because the regulation on the delivery of alcohol and the regulations Indiana put in place regarding that delivery represent a strong state interest in alcohol policy that falls within the state’s 21st Amendment powers
