Bill would allow seven-day spirits sales, reinstate cocktails to-go & lower taxes on spirits ready-to-drink cocktails

Yesterday, the Distilled Spirits Council of the United States (DISCUS) applauded the North Carolina House Committee on Alcoholic Beverage Control for passing SB 527, a bill that contains a number of consumer-friendly measures increasing convenience and supporting hospitality businesses throughout the state.

Included in the bill are measures to lower the tax rate for spirits ready-to-drink cocktails (RTDs), permit seven-day sales of distilled spirits as well as holiday sales, and allow cocktails to-go and delivery of mixed beverages.

“This bill is a significant step forward in modernizing North Carolina’s marketplace and bringing spirits consumers increased convenience,” said Amy Whited, DISCUS vice president of state public policy. “These measures will greatly support local hospitality businesses by allowing them to better serve their consumers including the many tourists who visit the state. We applaud Senators Tim Moffitt and Todd Johnson for introducing this forward-thinking legislation and the committee for passing it. We urge the General Assembly to do the same.”

Spirits-based RTDs

Despite many spirits RTDs having the same or lower alcohol-by-volume (ABV) than their beer- and wine-based counterparts, they are currently taxed at a much higher rate. SB 527 defines a “pre-mixed cocktail” and sets a maximum ABV of 13%. It exempts these low-ABV products from the state’s mixed beverage tax of $20 per four liters that is paid by the on-premises “mixed beverage permit” holders.

Seven-Day & Holiday Sales

North Carolina is one of six states in the country that prohibits the retail sale of distilled spirits on Sundays. SB 527 authorizes local ABC stores to sell on Sundays if they choose, provided the municipality acts to authorize it. The bill also authorizes local ABC stores to sell on New Year’s Day, July 4 and Labor Day.

Alabama, Mississippi, North Carolina, South Carolina, Texas and Utah are the only remaining states that prohibit seven-day spirits sales.

Cocktails To-Go

SB 527 authorizes cocktails to-go and delivery by mixed beverage permittees or delivery service permittees. Cocktails to-go orders must be made with a food purchase and placed in tamper-evident containers. Current law does not authorize cocktails to-go as a previous, temporary cocktails to-go measure sunset in June 2021.

Since the beginning of the pandemic, 23 states and the District of Columbia have enacted laws to permanently allow cocktails to-go, and 10 others have enacted laws that allow cocktails to-go on a temporary basis.