State law regulates the manufacture, distribution, and retail sale of liquor including spirits, wine, and malt liquor.? The Liquor and Cannabis Board (LCB) issues various types of liquor licenses, including spirits retail and distribution licenses.? The Department of Revenue collects taxes related to sales of spirits in the state.

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Licenses and Fees.? A spirits retail license allows a licensee to, among other things, sell spirits in original containers for consumption off the licensed premises.? Each spirits retail licensee must pay a 17 percent license issuance fee on all spirit sales.? Fees are collected by LCB and deposited into the Liquor Revolving Fund.

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A spirits distributor license allows a licensee to, among other things, sell spirits purchased from certain spirits manufacturers, distillers, or suppliers to spirits retail licensees.? Each spirits distributor licensee must pay a specified license issuance fee to be deposited into the Liquor Revolving Fund.

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Taxes.? The sale of spirits is subject to taxes, including a sales tax and liter tax.? The sales tax is based on the selling price of spirits.? The liter tax is based on the volume of the spirits being sold.? The sales tax is applied in the following manner:

• the rate paid by the general public is 20.5 percent; and
• the rate paid by on-premises retailers on purchases from distributors and distillers is 13.7 percent.

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The liter tax is applied in the following manner:

• the rate paid by the general public is $3.7708 per liter; and
• the rate paid by on-premises retailers on purchases from distributors and distillers is $2.4408 per liter.

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Definitions.? The following definitions are made:

• "spirits" means any beverage which contains alcohol obtained by distillation, except flavored malt beverages, but including wines exceeding 24 percent of alcohol by volume (ABV);?
• "wine" means any alcoholic beverage obtained by fermentation of fruits, such as grapes, berries, or apples, or other agricultural product containing sugar, to which any saccharine substances may have been added before, during, or after fermentation, and containing no more than 24 percent ABV, including sweet wines fortified with wine spirits, such as port, sherry, muscatel, and angelica, not exceeding 24 percent and not less than 0.5 percent ABV;?and
• "malt beverage or malt liquor" means any beverage such as beer, ale, lager beer, stout, and porter obtained by the alcoholic fermentation of an infusion or decoction of pure hops, or pure extract of hops and pure barely malt or other wholesome grain or cereal in pure water containing no more than 8 percent of alcohol by weight, and no less than 0.5 percent ABV.

Licenses and Fees.? The sale of low-proof beverages is excluded from the license issuance fees for spirits retail licensees and spirits distributor licensees.

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Taxes.? The sale of low-proof beverages is excluded from specified taxes on the sale of spirits, including sales and liter taxes.

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A tax of $2.50 per gallon is imposed on the following sales of low-proof beverages:

• sales by a spirits distributor to a spirits retailer;
• sales by a distillery or craft distillery that self-distributes low proof beverages to a retailer; and
• sales by a distillery or craft distillery directly to consumers.

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Definitions.? "Low-proof beverage" means any beverage that is 16 ounces or less and that contains more than 0.5 percent ABV and less than 7 percent ABV, but does not include wine, malt beverages, or malt liquor.