SC Department of Revenue
 
 
 
 
 
 
 
 
 
 
 
 
FAQs - Liquor By The Drink

 

Frequently Asked Questions:  Liquor By the Drink

 

  1. What is the effective date of being able to pour from "big" bottles?
    Sunday, January 1, 2006.

  2. Will I need to reapply for a new type license?
    No.  If you currently have a minibottle license, it will automatically convert to a liquor by the drink license on January 1, 2006.  When it is time to renew your license, your renewal application form will indicate that the license is for liquor by the drink.

  3. May I still sell minibottles after January 1, 2006? 
    Yes.  Your current minibottle license will authorize you to sell liquor by the drink in minibottles, and to pour from "big" bottles.  You may have both on your premises as long as you have a current minibottle or liquor by the drink license.  It is no longer mandatory that you break the seal in the presence of the customer, or deliver the minibottle to the customer.  It is also legal to use only a portion of a minibottle in a drink.  However, you may still continue to deliver sealed minibottles to the customer, if so requested by the customer or if you wish to do so.

  4. What can I do with my left over minibottles after January 1, 2006? 
    You can continue to use them in drinks.  If the retail dealer that sold them to you wants to take them back, he may.  If you have other licensed locations in S.C., you may transfer the minibottles there.  You may not sell them to another liquor by the drink licensee.

  5. May I stock my bar with liquor in big bottles before January 1, 2006?
    Yes, as long as you have a current minibottle license.  In order to allow for a smooth transition, you can begin stocking your bar with big bottles on Thursday, December 1, 2005.  However, under no circumstances should you sell from "big" bottles prior to January 1, 2006.  If during an inspection, SLED discovers liquor in big bottles with seals broken prior to January 1, 2006, the liquor will be confiscated, and an administrative citation will be written.

  6. What is the tax on liquor by the drink?
    The tax on minibottles was $0.25 per minibottle, and was collected and remitted to the S.C. Department of Revenue by the wholesale liquor dealer.  Beginning January 1, 2006, this special tax on minibottles will no longer exist.  The liquor by the drink licensee must collect and remit to the S.C. Department of Revenue an excise tax equal to five percent of the gross proceeds of the sales of liquor by the drink.  It does not matter if the liquor is poured from a minibottle or from a big bottle the liquor by the drink tax is five percent of the gross proceeds of the cost of the drink.  Sales tax, which must also be collected and remitted to the S.C. Department of Revenue, is not part of the gross proceeds.  For example, on a $5.00 drink in a county with a 6% sales tax:  $5.00 x .06 = .30 sales tax; $5.00 x 5% liquor by the drink tax = .25.  Total cost to the customer = $5.55.  If the operator wishes to sell the drink for $5.00 total, the taxes can be backed out as follows:  6% sales tax + 5% liquor by the drink tax = 11% total tax.  $5.00 / 1.11 x 11% = $0.50 total tax.  This would be allocated as follows:  5/11 x .50 = $0.23 for liquor by the drink tax; 6/11 x .50 = $0.27 for sales tax.  However, if you decide to include the sales tax and excise tax in the listed price of the drink, you must advise the patron on your signs and menus.  In addition, as is the case with sales tax, "gross proceeds" would include any mandatory gratuity, and you must include that amount when computing the sales tax and the liquor by the drink tax.  Liquor by the drink tax remittance forms are under development and will be made available on the department's website (
    www.sctax.org) by October 1, 2005.  The completed forms and taxes are due to the department on the twentieth of each month.  The new law does not provide for quarterly or annual filing, and specifically states that these taxes must be remitted to the S.C. Department of Revenue by the twentieth of each month.

  7. If I don't have the brand of liquor the customer ordered, can I substitute another brand?
    No.  It is a crime to substitute brands without customer approval.

  8. Does the state regulate the amount of liquor I must or can pour into a drink (does the law state how much liquor must be in a "shot")?
    No.

  9. May I have liquor in any size bottle on my premises after January 1, 2006?
    No.  The new law specifically states that liquor by the drink locations may not have liquor in 1.75 liter bottles on the premises.  Liquor by the drink locations may have liquor in any other size container.

  10. May I pre-mix cocktails such as frozen margaritas in quantity prior to the ordering of the cocktail by the customer?
    Yes.

  11. I currently have a PAL license which authorizes me to cook with liquor in "big"bottles, and a liquor by the drink license.  Do I need both licenses?
    After January 1, 2006, you will no longer need both licenses.  Your liquor by the drink license also authorizes you to use liquor in your cooking.

  12. I operate a restaurant with a minibottle license and cater private functions.  Can I sell full big bottles to my customers after January 1, 2006?
    No.  Your liquor by the drink license only allows you to sell liquor by the drink to your customers on your licensed premises.  S.C. law also does not allow you to deliver liquor, or to operate a cash bar for your customers off your licensed premises unless the customer has obtained a temporary license.  Organizations with temporary liquor licenses must purchase the liquor they intend to sell from Retail Liquor Dealers with a Wholesaler's Basic Permit issued under the Federal Alcohol Administration Act.

  13. Does my liquor by the drink license authorize me to sell sealed or unsealed bottles of liquor to my customers?
    No.  Your license only authorizes you to sell liquor by the drink. of liquor.  It does not matter if the customer intends to consume the liquor on the premises or intends toremove the liquor from the premises.  A liquor by the drink license only authorizes the sale of liquor by the drink not by the bottle.

  14. I currently have a stock of minibottles on hand that have already been taxed at .25 cents per container.  Will there be a refund of that tax?
    Yes, based on the minibottles you have on hand on January 1, 2006.  On January 1, 2006, each licensee must conduct an inventory of all minibottles on hand.  No later than March 2, 2006, a certified copy of that inventory, and a request for refund must be submitted to the S.C. Department of Revenue.  The department will refund the minibottle tax, minus the January 1, 2006, increase on the tax on liquor.  Forms and information on how to do this will be available on the department's website (
    www.sctax.org) by December 1, 2005.  You can expect to receive your refund in three to six weeks from the date you file all necessary forms with the department.  IMPORTANT NOTICE:  IF YOU DO NOT CONDUCT THE INVENTORY OF ALL MINIBOTTLES THAT YOU HAVE ON HAND ON JANUARY 1, 2006, AND IF A CERTIFIED COPY OF THAT INVENTORY IS NOT SENT TO THE DEPARTMENT WITHIN 60 DAYS OF THE INVENTORY, YOUR REFUND REQUEST WILL BE DENIED.

  15. I currently operate a retail liquor store.  What type of license do I need to sell liquor to liquor by the drink locations?
    You need only obtain a Wholesaler's Basic Permit under the Federal Alcohol Administration Act.  Currently there is no charge for this permit.  One can obtain the necessary form at: 
    http://www.ttb.gov/forms/pdfs/5100/f510024.pdf.  Mail the original application to the Department of the Treasury as shown on the form.  Mail a copy of the form to: S.C. Department of Revenue, ATTN:  Alcoholic Beverage Licensing, PO Box 125, Columbia, SC 29214.  Keep a copy of the application on your premises.  After mailing the forms, you may begin selling liquor to liquor by the drink locations.

  16. I operate a retail liquor store, and have filed the application for a Wholesaler's Basic Permit under the Federal Alcohol Administration Act with the U.S. Department of the Treasury and have sent a copy of that application to the S.C. Department of Revenue.  Can I now deliver liquor to liquor by the drink locations?
    Yes.  However, you are responsible for insuring the location has a current liquor by the drink license.

  17. May wholesale liquor dealers offer quantity discounts?
    Yes.  However, the discount must be on price only for each location, must appear on the sales records, and must be available to all licensed retail dealers.  While wholesalers are not required to offer any particular type of deal, the new law does not prohibit a wholesaler from allowing a retailer to accumulate purchases over a period of time to qualify for a deal.

  18. May liquor by the drink locations continue to send employees to pick up liquor at retail liquor stores with a Wholesaler's Basic Permit under the Federal Alcohol Administration Act as is the current practice?
    Yes.

  19. I operate a retail liquor store with a Wholesaler's Basic Permit under the Federal Alcohol Administration Act.  May I have an agent deliver the liquor for me?
    No.  The law only authorizes licensed retail dealers to deliver.  This would include the dealer's employees.  It does not include agents, or anyone else that is not an employee of the licensed retail liquor store.

  20. How old must my delivery person be?
    Twenty-one years of age, just like all the other employees in your retail liquor store.

  21. As a retail liquor store with a Wholesaler's Basic Permit under the Federal Alcohol Administration Act, what type of records must I keep of sales to liquor by the drink locations?
    You must maintain a record that shows the name of the liquor by the drink licensee, date of sale, and quantity sold by brand and bottle size.  The necessary form will be posted on the department's website (
    www.sctax.org) no later than December 1, 2005.  These completed forms need not be submitted to the department, but must be kept on your premises for at least three years, and must be made available for inspection upon demand of agents of the department.

  22. May retail liquor dealers with a wholesaler's basic permit issued pursuant to the Federal Alcohol Administration Act offer special prices, free goods, or other incentives to liquor by the drink licensees?
    Yes.  However, retail liquor dealers are prohibited by Section 61-6-1540 from having any goods on their premises other than wine or liquor except:  drinking glassware packed together with alcoholic liquors if the glassware and alcoholic liquors are packaged together by the wholesaler or producer, and nonalcoholic items other than beer or wine, packaged together with alcoholic liquors if the nonalcoholic items and alcoholic liquors are in sealed packages and are packaged together by the alcoholic liquor producer at its place of business.

  23. May liquor manufacturers or liquor wholesaler dealers provide rebates or other incentives directly to liquor by the drink licensees?
    Yes, but they cannot give or sell any liquor directly to the liquor by the drink licensees.

  24. I operate a retail liquor store with a wholesaler's basic permit issued pursuant to the Federal Alcohol Administration Act.  Does the State regulate what I can charge for liquor, or what I can charge for deliveries to liquor by the drink licensees?
    No.

  25. I operate a retail liquor store with a wholesaler's basic permit issued pursuant to the Federal Alcohol Administration Act.  Are there restrictions on when I can deliver liquor to liquor by the drink licensees?
    Yes.  You may only deliver during those hours you can sell liquor in your store - Monday through Saturday, between the hours of 9:00 a.m. and 7:00 p.m.  Deliveries may not be made on Statewide elections days, or on those periods proclaimed by the Governor in the interest of law and order or public morals. (Currently Thanksgiving Day and Christmas Day).

  26. Is there any prohibition against a liquor by the drink licensee owning an interest in a retail liquor store that also has a wholesaler's basic permit issued pursuant to the Federal Alcohol Administration Act?
    No.

  27. I operate a retail liquor store.  After January 1, 2006, may I sell minibottles to the general public?
    Yes.  With or without a wholesaler's basic permit issued pursuant to the Federal Alcohol Administration Act, you may sell minibottles to the general public.  After January 1, 2006, there will no longer be any limitation on the size bottles that you can sell to the public.  Of course, you may not sell 1.75 liter bottles to liquor by the drink locations.

  28. I hear people refer to Class A wholesalers and Class B wholesalers.  What do those terms mean?
    The source of these terms is lost in antiquity.  The terms are not to be found anywhere in state or federal law.  We have wholesaler liquor dealers (which some call Class A dealers), and we have retail liquor dealers with a Wholesaler's Basic Permit issued under the Federal Alcohol Administration Act (which some people call Class B dealers).

 

NOTE:  These answers address issues of S.C. law only.  They do not attempt to address federal law, federal regulations, or local ordinances.

 

 

Page Last Updated: 21 November 2005



 
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