Section 1320-04-06-.02 - TAX LIABILITY(1) The tax rates as set out at T.C.A. §57-131 shall, for the purpose of paying tax on alcoholic beverages measured by the metric system of capacity measurement, be as follows:(a) $.2906 per liter of wine.(b) $1.0567 per liter of spirits.(2) Tax liability shall be based upon adjusted gross sales, other than sales or returns to wholesalers and/or suppliers, for the preceding calendar month and payment thereof shall be made on or before the fifteenth (15th) day following such month.(3) Adjusted gross sales shall mean total disposition of alcoholic beverages, less the following: (a) Sales to other wholesalers.(b) Returns to distillers or other suppliers, or exports authorized by suppliers to other than distillers.(c) Damaged or deteriorated merchandise which has been destroyed as otherwise provided herein and house breakage on wines and on distilled spirits on which identification stamps remain identifiable and federal strip stamp is intact.(d) Sales, gifts or distribution of any wine used solely for sacramental purposes.(e) Beverages accidentally damaged or destroyed on business premises by fire or other acts of nature beyond his control or other accountable losses.(f) Sales to qualified military installations of the federal government.(4) Restrictions on classifying adjusted gross sales. The following procedure shall be observed in handling and accounting for tax exempt disposition of alcoholic beverages: (a) Before tax free sales to other wholesalers may be consummated, the consignor's records must properly indicate sales invoices and the consignee's records must indicate receipt of such merchandise.(b) Before a wholesaler may be relieved of tax liability for products returned to distillers or other suppliers, or exports authorized by suppliers, it shall be the responsibility of any such wholesaler to furnish the Department of Revenue with:1. documentary evidence of authorization from the supplier for return or export of the specific products by such wholesaler;2. a copy of the bill of lading or similar document regarding such products return or export;3. an affidavit from the person or firm receiving the returned or exported products which includes: (i) the kind, quality and size or the products received; and(ii) for distilled spirits, that the identification stamps upon those products have been or will be destroyed or obliterated.4. documentary evidence from the supplier that credit has been afforded the wholesaler for the products described in "3" above. The documentation for any returned products or exports for which tax relief is claimed, during any tax reporting month, shall be attached to a tax return and submitted to the Department of Revenue as part of that return. No wholesaler may be relieved of tax liability for any products returned or exported during any month until all required documentation applicable to such returns or exports is attached to a single tax return and received by the Department of Revenue.
(c) Before a wholesaler may be relieved of tax liability for house breakage, it shall be his responsibility to obtain the assistance of one Department of Revenue representative who will observe the broken containers for which exemption is being sought and furnish a certificate stating the quantity and size containers of distilled spirits on which the identification stamp remains identifiable with the federal strip stamp or manufacturer's seal intact, and, with reference to wine, furnish a certificate stating the quantity and size containers on which the crown, cap, seal or cork remain intact and unbroken. Under no conditions may credit be claimed or given for tax applicable to broken containers of distilled spirits when the identification stamp is not identifiable and the federal strip stamp or manufacturer's seal is not intact; nor shall credit be allowed in any instance when the size of the original container cannot be definitely determined. In the event the wholesaler shall have unsalable merchandise to remove from inventory, tax credit may be given only when one Department of Revenue representative witnesses the complete destruction of the contents and the bottles, and makes certification as required herein for other breakage.(d) Before tax-free sales of wine for sacramental purposes may be made, sales invoices applicable to such sales must be signed by an authorized person designated by a letter from an official of the church or synagogue receiving the wine and such authorized person's signature must be filed at the same time with the Department of Revenue as a matter of record.(e) Before a wholesaler may be relieved of tax liability for beverages accidentally damaged or destroyed on business premises by fire or other acts of nature beyond his control or other accountable losses, the wholesaler shall be required to furnish documentary evidence by which the Department of Revenue may reasonably determine that a specific loss has occurred.(f) Before a wholesaler may be relieved of tax liability for products sold to a fort, base, camp or post of the armed forces of the United States or post exchange, ship-service store, commissary or mess operated by the US. armed forces, the following conditions shall be required:1. The commanding officer of a qualified military installation has furnished the Commissioner of Revenue a letter designating an officer or civilian employee who possesses managerial authority over the post exchange, ship service store, commissary or mess as a person authorized to sign invoices acknowledging receipt of such products within the military installation with respect to which alcoholic beverages tax credit is being sought and such letter has been signed by the commanding officer. The signature of such designated officer or civilian employee shall be filed at the same time with the Department of Revenue as a matter of record;2. The officer or civilian employee designated in each instance, as provided in "1" above, has signed each invoice acknowledging receipt of the products and also signed a certificate as prescribed by the Commissioner of Revenue summarizing all receipts of such products during a given month and certifying that the products were sold to, and delivered to a post exchange, ship-service store, commissary, mess or other such exempt agency, by a Tennessee wholesaler and that said products will be sold by such instrumentality of the government for consumption within the geographical boundaries of the government installation subject to regulations by the commanding officer of such installation;3. A copy of all such sales invoices and the applicable certificate both duly signed as required in "2" above, shall accompany the monthly report to substantiate any credit being sought, otherwise the wholesaler shall be liable for tax applicable to such products.(5) Each Tennessee licensed wholesaler must include in his inventory merchandise in an amount equal only to that merchandise which was actually received. In such instances where a shipment received is less than the stated amounts on the invoice, an exception report from the common carrier shall be filed with the monthly report to substantiate any difference in actual receipt quantities and stated invoice quantities. Inventories may be adjusted accordingly contingent upon the wholesaler furnishing the department within ninety days from date of receipt of shipment evidence of payment for such shortage by the carrier or insurance company. Otherwise, the wholesaler shall be liable for tax applicable to total invoiced quantities.Tenn. Comp. R. & Regs. 1320-04-06-.02
Original rule certified June 7, 1974. Amendment filed June 4, 1974; effective July 4, 1974. Amendment filed November 2, 1978; effective January 1, 1979. Amendment filed August 31, 1979; effective October 15, 1979. Amendment filed January 29, 1985; effective April 16, 1985. Amendment filed June 27, 1990; effective August 11, 1990.Authority: T.C.A. §§ 57-3-303, 57-3-307 and 67-1-102.