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Beer and Liquor Sales by Tennessee Convention Centers, Parks and Other Locations May Be Illegal
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Beer and Liquor Sales by Tennessee Convention Centers, Parks and Other Locations May Be Illegal

01.19.14
Last week, the Tennessee Attorney General released an opinion that says Tennessee cities cannot hold licenses to sell beer or alcoholic beverages.  The AG found that a municipality - fancy word for city - "is not a 'person, firm, corporation, partnership, or association' capable of obtaining a license under [the liquor laws]."  You can read the decision here.

Reasonable minds can differ, but we think the AG got it wrong.

A city is a "municipal corporation" under state law. Clearly a corporation qualifies for a liquor license.  Not sure why addition of the term "municipal" disqualifies a municipal corporation.  A "nonprofit" corporation qualifies for a liquor license.

Although an LLC is not listed as a form of entity that qualifies for a liquor license, hundreds if not thousands of LLCs hold liquor licenses in Tennessee.  If you strictly construe the liquor laws, like the AG did, LLCs would not qualify for liquor licenses.

There are a number of municipalities that hold liquor licenses.  According to a Tennessean story about Metro Nashville Parks, many of the Metro Parks golf courses have held liquor licenses since the 1970's.  The AG says this is illegal.

Perhaps the most significant impact of the AG opinion is whether municipal-owned convention centers and sports centers may share in the profit of liquor sales by private vendors that provide food and beverage service.  This is a common element of the economic relationship between private food and beverage vendors at multi-million dollar facilities constructed by cities.  The city receives a percentage of liquor sales.


The AG opinion did not address this issue.  Based on recent experience with the ABC, taking a percentage of liquor sales is definitely in question.

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