Tenn. Comp. R. & Regs. 1320-04-06-.07 - REGISTRATION AND TRANSFER OF BRANDS
(1) In addition to
paying applicable tax due each year, any manufacturer or importer distributing
brands of alcoholic beverages in this state shall file with the Department of
Revenue the following:
(a) Copies of all
written contracts or renewal agreements with Tennessee wholesalers making sales
of brands of alcoholic beverages distributed in this state by such manufacturer
or importer.
(b) Any report or
other forms required by the Commissioner of Revenue.
(c) A copy of the label from each brand of
alcoholic beverages distributed in this state and copies of the approved
ATF-Form 1649 of the Bureau of Alcohol, Tobacco and Firearms. Copies of the
labels or forms need not be filed each year but shall be filed upon initial
registration of such brand and at any time any change is made in such label or
an additional filing is made.
(2) If any manufacturer or importer fails to
register or registers improperly any brand, the Department of Revenue shall
notify the manufacturer or importer to cease distribution in this state until
such brand(s) is registered properly and also shall notify the Alcoholic
Beverage Commission to suspend any permit issued to any such manufacturer or
importer pursuant to the provisions of T.C.A. §
57-3-601 et seq. until such brand
is registered properly. The following goods are contraband and shall be seized
and sold by the Department of Revenue pursuant to the provisions of T.C.A.
§§
12-2-201 through
12-2-209 with applicable brand
registration tax added to the price of any such goods sold:
(a) Any products located in this state of any
manufacturer or importer who fails to register or registers improperly any
brand(s) that are not disposed of within 30 days of the date of notification as
provided above.
(b) Any products of
any manufacturer or importer who fails to register or registers improperly any
brand(s) that are shipped into this state after the date of notification as
provided above.
(3) No
manufacturer or importer or any successor to a manufacturer or importer shall
be permitted to transfer a brand from one wholesale distributor to another or
to terminate a contract prior to the expiration of its term without the written
approval of the Commissioner. Requests for approval of a transfer or
termination must be submitted in writing, and a copy of said request must at
the same time be sent to the wholesale distributor in whose name the brand is
then registered.
(a) Upon receipt from a
manufacturer or importer or successor of a request to terminate a contract or
to transfer a brand, the Department shall notify the requesting party and the
wholesale distributor in whose name the brand is then registered that the
parties have thirty (30) days from the date of receipt of the letter in which
to cure any deficiencies. The brand shall remain in status quo during the
thirty day period. If the manufacturer or importer or successor wishes to
pursue its request for a termination or transfer at the end of the thirty-day
period, it must notify the Department in writing that it wishes to proceed with
the termination or transfer request.
(b) Upon receipt of the request to proceed,
the Commissioner will make a preliminary determination as to whether sufficient
evidence has been offered to establish a prima facie case of good cause,
asserted in good faith, to terminate the contract or to transfer the brand.
1. Upon the Commissioner's preliminary
determination either to approve or disapprove the contract termination or brand
transfer, the Department shall so notify the manufacturer or importer or
successor, the wholesaler in whose name the brand is then registered, and all
other affected parties by letter. The parties shall then have an opportunity to
request a hearing before the Department's decision to approve the determination
or transfer becomes final. The parties shall have ten (10) days from the date
of receiving notice in which to request a hearing.
2.
(i) If a
hearing is requested and held, the termination of contract or transfer of brand
will not take effect unless and until a determination is made by the hearing
officer to approve the termination or transfer.
(ii) If determination is made by the hearing
officer to disapprove the termination or transfer, the brand shall remain in
status quo. Thereafter, failure on the part of any manufacturer or importer or
successor to ship his wholesale distributor a reasonable amount of the brand
sought to be terminated or transferred will be grounds for a revocation of that
manufacturer's or importer's or successor's nonresident seller's permit or
winery license.
(iii) Absent a
request for a hearing, the Commissioner's preliminary determination concerning
the termination of the contract or the transfer of the brand will become final
and will take effect when the ten (10) day period has elapsed.
(c) Approval for a
termination of contract or a transfer of brand shall be given by the
Commissioner only if it is found by him that the termination or transfer is
being proposed in good faith and for good cause and for no other reason.
1. "Good cause" means:
(i) Failure by a wholesale distributor to
comply substantially with the requirements imposed or sought to be imposed upon
him by the manufacturer, importer or successor, which requirements are not
discriminatory as compared with the requirements imposed on other similarly
situated wholesale distributors either by their terms or in the manner of their
enforcement, and which requirements are not in violation of any law or
regulation;
(ii) The failure by the
wholesale distributor to act in good faith and in a commercially reasonable
manner in carrying out the terms of the contract;
(iii) Voluntary abandonment of the
contract;
(iv) Conviction of the
wholesale distributor in a court of competent jurisdiction of an offense
punishable by a term of imprisonment in excess of one (1) year;
(v) Any act by a wholesale distributor which
substantially impairs the manufacturer's importers or successor's trademark or
trade name;
(vi) The institution of
insolvency or bankruptcy proceedings by or against a wholesale distributor, or
any assignment or attempted assignment by a wholesale distributor of the
contract or the assets of the distributorship for the benefit of
creditors;
(vii) Failure of the
wholesale distributor to pay to the manufacturer, importer or successor within
thirty (30) days after receipt of notice any uncontested sums past due the
manufacturer, importer or successor and relating to the contract; or
(viii) Failure of the wholesale distributor
to comply with federal, state or local law or regulations applicable and
material to the operation of the distributorship, which could reasonably impair
the wholesaler distributor's continued future performance.
2. "Good faith" means honesty in fact in the
conduct or transaction concerned.
Notes
Authority: T.C.A. §§ 47-25-1503, 57-3-301, 67-1-102, 67-1-107; Opinion of the Attorney General No. 90-65.
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