New Texas alcohol laws: How recent changes impact sellers

Three major changes affecting beverage alcohol sellers took effect in Texas September 1, 2021: The Texas Alcoholic Beverage Commission consolidated licenses and permits, changed the fee structure, and launched a new Alcohol Industry Management System (AIMS).

Texas used to have 75 different licenses for beverage alcohol sellers. Since that’s a lot even by Texas standards, the Texas Legislature directed the Texas Alcoholic Beverage Commission (TABC) to cut the number in half. As of September 1, 2021, there are 37 different Texas beverage alcohol licenses and permits — and most businesses can operate with just one.

Some licenses haven’t changed: The Bonded Warehouse Permit (J/JD), the Consumer Delivery Permit (CD), and the Out-of-State Winery Direct Shipper’s Permit (DS) have the same permit authority as before. However, many subordinate permits were consolidated into a primary permit (which may or may not have had its name changed). For example:

A single Nonresident Brewer’s License (BN) now authorizes out-of-state brewers to sell malt beverages to Texas-based TABC license holders authorized to import those beverages into Texas. It also authorizes transportation to those Texas importers.

The Private Carrier’s Permit (O), Private Storage Permit (L), and Public Storage Permit (K) were absorbed into the Wholesaler’s Permit (W), which now authorizes the distribution, import, storage, and transport of distilled spirits and wine.

For a complete view of the new license structure, check out TABC, License Consolidation Explained. It explains what’s new and lists licenses/permits in effect prior to September 1, 2021, consolidated licenses/permits, and new licenses/permits.

What do I do if my license has been discontinued?

In some cases, TABC is allowing businesses to continue to operate under an existing license that was discontinued on September 1, 2021. 

TABC explains, “Authorizations for certain license and permit types — like Nonresident Seller’s Permit (S) with a Nonresident Brewer’s Permit (U), Wholesaler’s Permit (W), or General Class B Wholesaler’s Permit (X) — changed on Sept. 1 due to consolidation of beer and ale to malt beverages. However, even if your license type lost its ale authorization on Sept. 1, you may continue to purchase, sell, transport, or store ale and malt liquor under that license until its expiration date.” Licenses are generally valid for two years.

You must apply for the appropriate new license before the existing license expires unless you hold another license authorizing the distribution or sale of your products.

Though most licenses and permits will continue to be valid for two years, fees for many state licenses and permits changed effective September 1, 2021.

The fees were due for an overhaul since Texas hadn’t altered its fee structure in about a decade. After studying the issue, TABC determined its fee structure no longer aligned with the cost to enforce alcohol laws. Furthermore, some businesses with similar functions were “paying drastically different fees.”

Most fees increased as of September 1, 2021, but there are a few outliers: The Distiller’s and Rectifier’s Permit (D), which was $3,350 prior to September 1, dropped to $3,000. Similarly, the Out-of-State Winery Direct Shipper’s Permit (DS) is now $500 instead of $526.

This short list of TABC Licensing Fees should tell you what you need to know and pay. For a more thorough understanding of how the new fee structure was created, check out TABC’s New Two-Year Licensing Fees.

Note: TABC plans to review the new fee structure in March or April 2022, after which some fees may decrease or increase. 

The new fee structure instituted by TABC is for state-imposed fees, not local fees. According to TABC, most local fees remain the same. See TABC’s Local Government Changes for a local fees chart and additional information.

Finally, TABC has created a new Alcohol Industry Management System (AIMS). If you haven’t already, you should create an AIMS account as directed by TABC.

Businesses that should complete onboarding in September 2021

The following license holders are instructed to sign in to AIMS and complete the onboarding process before the end of September 2021:

• Manufacturing tier (excise tax reports due in October must be filed via AIMS)

• Distribution tier (excise tax reports due in October must be filed via AIMS)

• Licenses that expire in September (regardless of expiration year)

• Licenses that expire in October (regardless of expiration year)

The above licensees/permittes should complete the onboarding process as soon as possible this month. Failure to do so could lead to penalties.

On its Alcohol Industry Management FAQs page, TABC highly recommends submitting excise tax through AIMS, as it “gives you the ability to submit and pay at once and will avoid any possible delays faced with submitting by mail. You’ll be able to submit excise tax reports in AIMS starting October 4, 2021.” That said, it has also updated its alcohol exise tax forms.

Businesses that should complete onboarding between October 2021 and August 2022

TABC expects all other businesses to complete their AIMS onboarding the month before their license is set to expire, regardless of the year it will expire.

For example, if your license expires in November 2021 or 2022, you should start learning about AIMS in September 2021 and complete your AIMS onboarding in October 2021. If your license expires in April 2022 or 2023, you should start learning about AIMS in February 2022 and complete your onboarding in March 2022. And so on.

Once onboarding is complete, you may file reports, renew licenses, and handle many other essential tasks through AIMS. TABC asks current license holders to print their license from AIMS and post it at their licensed location.

All businesses should be using AIMS by August 2022, though TABC will continue to accept paper applications, forms, and documents completed outside of AIMS. Businesses submitting paper documents should expect a slower response time. Additional details can be found at this TABC Technology Changes page.

The new license and permit structure in Texas will affect many beverage alcohol sellers. 

Avalara for Beverage Alcohol can help you manage a constantly changing web of state-by-state regulatory challenges. Learn how.