AN ACT relating to regulated substances and declaring an emergency.

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AN ACT relating to regulated substances and declaring an emergency. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
SECTION 1. A NEW SECTION OF KRS CHAPTER 138 IS CREATED TO 3
READ AS FOLLOWS: 4
(1) As used in this section: 5
(a) "Alcoholic beverage" has the same meaning as in Section 6 of this Act: 6
(b) "Alcoholic beverage retailer" or "retailer" means a person who sells any 7
alcoholic beverage to a consumer in Kentucky for any purpose, including: 8
1. At a Kentucky retail location; 9
2. At premises as defined in Section 6 of this Act in Kentucky; 10
3. To a consumer at a Kentucky address by a direct shipper; 11
4. By any other direct-to-consumer seller; or 12
5. To a consumer through any other approved location or method 13
authorized by law; 14
(c) "Direct shipper" means a direct shipper licensed in KRS 243.027; 15
(d) "Gross receipts": 16
1. Means the total amount or consideration, including cash, credit, 17
property, and services, for which alcoholic beverages are sold, valued 18
in money, whether received in money or otherwise, without any 19
deduction for any of the following: 20
a. The alcoholic beverage retailer's cost of the alcoholic beverages; 21
b. Charges by the retailer for any services necessary to complete the 22
sale; and 23
c. Delivery charges by the retailer for the preparation and delivery 24
to a location designated by the purc haser, including 25
transportation, shipping, postage, handling, crating, and 26
packing; and 27
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2. Does not include: 1
a. Discounts, including cash, term, or coupons that are not 2
reimbursed by a third party and that are allowed by an alcoholic 3
beverage retailer and taken by a purchaser on a sale; 4
b. Interest, financing, and carrying charges from credit extended 5
on the sale of alcoholic beverages, if the amount is separately 6
stated on the invoice, bill of sale, or similar document given to 7
the purchaser; 8
c. Any state retail regulatory license fees or taxes legally imposed 9
directly on the purchaser that are separately stated on the 10
invoice, bill of sale, or similar document given to the purchaser, 11
including sales tax imposed by KRS 139.200; 12
d. Local alcohol regulatory l icense fees authorized in Section 16 of 13
this Act that are separately stated on the invoice, bill of sale, or 14
similar document given to the purchaser; or 15
e. Sales made by a direct shipper to a consumer located outside of 16
Kentucky; 17
(e) "Person" means an indi vidual, partnership, joint venture, committee, 18
association, corporation, governmental unit, nonprofit organization, or any 19
other organization or group of persons; 20
(f) "State retail regulatory license fee" includes interest accrued at the rate 21
provided by K RS 131.183, all applicable penalties imposed pursuant to this 22
chapter, and all applicable penalties and fees imposed pursuant to KRS 23
131.180, 131.410 to 131.445, and 131.990; and 24
(g) "Third party" means a person other than the purchaser. 25
(2) On or after Ju ly 1, 2027, a state retail regulatory license fee is imposed on all 26
alcoholic beverage retailers at the rate of four percent (4%) of the gross receipts 27
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derived from the sale of alcoholic beverages to consumers in this state. 1
(3) The state retail regulatory license fee shall be: 2
(a) Administered by the department; and 3
(b) Transferred to the general fund. 4
(4) The state retail regulatory license fee: 5
(a) May be added to the selling price charged by the alcoholic beverage retailer 6
on the alcoholic beverages, when stated separately; and 7
(b) Shall be paid by the alcoholic beverage retailer as prescribed in 8
administrative regu lations promulgated by the department in accordance 9
with KRS Chapter 13A. 10
(5) The alcoholic beverage retailer is liable for the state retail regulatory license fee. 11
(6) (a) Every alcoholic beverage retailer shall, by the twentieth day of each month, 12
transmit to the department reports, on the forms the department may 13
prescribe, on the total retail sales for the month and state retail regulatory 14
license fees due. 15
(b) For purposes of facilitating the administration, payment, or collection of the 16
state retail r egulatory license fees levied by this chapter, the department 17
may, within its discretion, permit or require returns or fee payments for 18
periods other than those prescribed in paragraph (a) of this subsection. 19
(7) Payment of the state retail regulatory license fee shall be due with the report. 20
(8) (a) For reimbursement of the cost of collecting and remitting the fee, the 21
alcoholic beverage retailer shall deduct on each return one -quarter of one 22
percent (0.25%) of the fee due, provided the amount due is not d elinquent at 23
the time of payment. 24
(b) The total reimbursement allowed for each alcohol beverage retailer shall 25
not exceed fifty dollars ($50) per return. 26
(c) For purposes of this subsection only, "alcoholic beverage retailer" shall not 27
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include a distiller. 1
(9) The alcoholic beverage retailer shall keep and preserve an accurate record of all 2
receipts of its alcoholic beverage products sold, and state retail regulatory license 3
fees due, together with invoices or other pertinent records and papers required by 4
the department for four (4) years. 5
(10) An alcoholic beverage retailer or other person shall not: 6
(a) Fail or refuse to make the returns and pay the state retail regulatory license 7
fee prescribed by this section; 8
(b) Refuse to permit the department or any representative appointed by the 9
commissioner in writing to examine his or her records, papers, files, and 10
equipment pertaining to the taxable business; 11
(c) Make an incomplete, false, or fraudulent return, or attempt to do anything 12
to avoid: 13
1. A full disclosure of the amount of business done; or 14
2. The payment of the whole or any part of the state retail regulatory 15
license fee or penalties due; or 16
(d) Fail to keep and preserve records of the alcoholic beverage products sold by 17
the alcoholic beverage retaile r to substantiate the reports required by this 18
section. 19
(11) Any person who violates any provision of this section shall be subject to the 20
uniform civil penalties imposed pursuant to KRS 131.180 and interest at the tax 21
interest rate as defined in KRS 131.183. 22
(12) (a) 1. Notwithstanding any other provision of this chapter to the contrary, 23
the president, vice president, secretary, treasurer, or any other person 24
holding any equivalent corporate office of any corporation subject to 25
this section shall be personally and individually liable, both jointly and 26
severally, for the state retail regulatory license fees imposed by this 27
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section, and neither the corporate dissolution nor withdrawal of the 1
corporation from the state nor the cessation of holding any corporat e 2
office shall discharge the foregoing liability of any person. 3
2. The personal and individual liability shall apply to each and every 4
person holding the corporate office at the time the state retail 5
regulatory license fees become or became due. 6
3. A perso n shall not be personally and individually liable pursuant to 7
this section who had no authority in the management of the business 8
or financial affairs of the corporation at the time that the state retail 9
regulatory license fees imposed by this section become or became due. 10
(b) 1. Notwithstanding any other provision of this chapter, KRS 275.150, 11
362.1-306(3) or predecessor law, or 362.2 -404(3) to the contrary, the 12
managers of a limited liability company, the partners of a limited 13
liability partnership, and t he general partners of a limited liability 14
limited partnership or any other person holding any equivalent office 15
of a limited liability company, limited liability partnership, or limited 16
liability limited partnership subject to this section shall be person ally 17
and individually liable, both jointly and severally, for the state retail 18
regulatory license fees imposed by this section. 19
2. Dissolution, withdrawal of the limited liability company, limited 20
liability partnership, or limited liability limited partner ship from the 21
state, or the cessation of holding any office shall not discharge the 22
liability of any person. The personal and individual liability shall 23
apply to every manager of a limited liability company, partner of a 24
limited liability partnership, or g eneral partner of a limited liability 25
limited partnership at the time the state retail regulatory license fees 26
become or became due. 27
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(13) The department may prescribe forms and promulgate administrative regulations 1
in accordance with KRS Chapter 13A to exe cute and administer this section. The 2
state retail regulatory license fee may be paid via electronic funds transfer. The 3
alcoholic beverage retailer shall provide the department with all protocol 4
documentation and electronic funds transfer data necessary t o facilitate the 5
timely transfer of funds. 6
SECTION 2. KRS CHAPTER 243A IS ESTABLISHED AND A NEW 7
SECTION THEREOF IS CREATED TO READ AS FOLLOWS: 8
(1) On or after July 1, 2027, a state wholesale regulatory license fee is imposed at a 9
rate of four-tenths of a cent ($0.004) for each milliliter of alcohol contained in an 10
alcoholic beverage for human consumption sold, used, or distributed by sale or 11
gift in the Commonwealth of Kentucky on every: 12
(a) Wholesaler; 13
(b) Distributor; 14
(c) Distiller that directly transfers products to its retail premises; 15
(d) Small farm winery that directly transfers products to its retail premises; 16
(e) Manufacturer permitted to self-distribute to retailers; and 17
(f) Direct shipper. 18
(2) (a) On or after July 1, 2027, a state wholesale regulatory license fee is imposed 19
on a microbrewery for its barrels directly transferred to a retailer or 20
consumer independent of a distributor at the fol lowing rates for each 21
milliliter of alcohol contained in an alcoholic beverage for human 22
consumption sold, used, or distributed by sale or gift in the Commonwealth 23
of Kentucky: 24
1. For the first fifteen thousand (15,000) taxable, directly transferred 25
barrels in a calendar year, at a rate of fourteen one -hundredths of a 26
cent ($0.0014) for each milliliter of alcohol contained in an alcoholic 27
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beverage sold; and 1
2. For any directly transferred barrels exceeding the first fifteen 2
thousand (15,000) taxable, direct ly transferred barrels in a calendar 3
year, at a rate of four -tenths of a cent ($0.004) for each milliliter of 4
alcohol contained in an alcoholic beverage sold for human 5
consumption in the Commonwealth of Kentucky. 6
(b) A microbrewery that directly transfers products to a retailer or consumer 7
independent of a distributor prior to July 1, 2027, and: 8
1. Directly transfers more than one thousand (1,000) barrels in calendar 9
year 2026 is subject to the state wholesale regulatory license fee in 10
paragraph (a) of this subsection; or 11
2. a. Directly transfers less than one thousand (1,000) barrels in 12
calendar year 2026 is exempt from the state wholesale regulatory 13
license fee in paragraph (a) of this subsection, subject to 14
subdivision b. of this subparagraph. 15
b. If the m icrobrewery directly transfers more than one thousand 16
(1,000) barrels in a calendar year after 2026, the state wholesale 17
regulatory license fee imposed by paragraph (a) of this 18
subsection shall apply to: 19
i. All directly transferred gallons exceeding the f irst one 20
thousand (1,000) barrels in that calendar year; and 21
ii. All directly transferred gallons in subsequent calendar 22
years. 23
(c) 1. A microbrewery that begins directly transferring products to a retailer 24
or consumer independent of a distributor on or a fter July 1, 2027, is 25
exempt from the state wholesale regulatory license fee levied in 26
paragraph (a) of this subsection on the first one thousand (1,000) 27
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barrels sold in a calendar year, subject to subparagraph 2. of this 1
paragraph. 2
2. If the microbrewery directly transfers more than one thousand (1,000) 3
barrels in a calendar year, the state wholesale regulatory license fee 4
imposed by paragraph (a) of this subsection shall apply to: 5
a. All directly transferred barrels exceeding the first one thousand 6
(1,000) barrels in that calendar year; and 7
b. All directly transferred barrels in subsequent calendar years. 8
(3) For timely filing and payment, the wholesaler, distributor, distiller, small farm 9
winery, manufacturer, direct shipper, or microbrewery shall deduct, for each 10
milliliter transferred or sold, seven-thousandths of a cent ($0.00007) per milliliter 11
of alcohol contained in an alcoholic beverage sold for human consumption in the 12
Commonwealth of Kentucky, provided the amount due is not delinquent at the 13
time of payment. 14
(4) (a) A wholesaler, distributor, distiller, small farm winery, manufacturer, direct 15
shipper, and microbrewery shall pay and report the state wholesale 16
regulatory license fee levied in subsections (1) and (2) of this section to the 17
Department of Revenue on or bef ore the twentieth day of the calendar 18
month next succeeding the month in which possession or title of the 19
alcoholic beverages is transferred from the wholesaler, distributor, distiller, 20
small farm winery, manufacturer, direct shipper, or microbrewery to 21
manufacturers, retailers, or consumers in this state, in accordance with 22
administrative regulations promulgated pursuant to KRS Chapter 13A 23
designed reasonably to protect the revenues of the Commonwealth. 24
(b) The report of the state wholesale regulatory lic ense fees shall be on the 25
forms the Department of Revenue prescribes and shall include: 26
1. Total milliliters of alcohol transferred or sold, with a listing 27
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containing the container size of each type of product transferred or 1
sold, the milliliters per conta iner, and how many products were sold; 2
and 3
2. The amount of state wholesale regulatory license fees due. 4
(5) (a) 1. Notwithstanding any other provision of this chapter to the contrary, 5
the president, vice president, secretary, treasurer, or any other perso n 6
holding any equivalent corporate office of any corporation subject to 7
this section shall be personally and individually liable, both jointly and 8
severally, for the state wholesale regulatory license fees imposed by 9
this section, and neither the corporate dissolution nor withdrawal of 10
the corporation from the state nor the cessation of holding any 11
corporate office shall discharge the foregoing liability of any person. 12
2. The personal and individual liability shall apply to each and every 13
person holding the corporate office at the time the state wholesale 14
regulatory license fees become or became due. 15
3. A person shall not be personally and individually liable pursuant to 16
this section who had no authority in the management of the business 17
or financial affairs of the corporation at the time that the state 18
wholesale regulatory license fees imposed by this section become or 19
became due. 20
(b) 1. Notwithstanding any other provision of this chapter, KRS 275.150, 21
362.1-306(3) or predecessor law, or 362.2 -404(3) to the contrary, the 22
managers of a limited liability company, the partners of a limited 23
liability partnership, and the general partners of a limited liability 24
limited partnership or any other person holding any equivalent office 25
of a limited liability company, li mited liability partnership, or limited 26
liability limited partnership subject to this section shall be personally 27
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and individually liable, both jointly and severally, for the state 1
wholesale regulatory license fees imposed by this section. 2
2. Dissolution, withdrawal of the limited liability company, limited 3
liability partnership, or limited liability limited partnership from the 4
state, or the cessation of holding any office shall not discharge the 5
liability of any person. The personal and individual liabili ty shall 6
apply to every manager of a limited liability company, partner of a 7
limited liability partnership, or general partner of a limited liability 8
limited partnership at the time the state wholesale regulatory license 9
fees become or became due. 10
SECTION 3. A NEW SECTION OF KRS CHAPTER 243A IS CREATED TO 11
READ AS FOLLOWS: 12
(1) As used in this section: 13
(a) "Food" has the same meaning as in KRS 217.2201; 14
(b) "Hemp" means the plant species Cannabis sativa L. and any part of t hat 15
plant, including the seeds thereof and all derivatives, extracts, 16
cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or 17
not, with a total delta -9 tetrahydrocannabinol concentration of not more 18
than three-tenths of one percent (0.3%) on a dry weight basis; 19
(c) "Hemp-derived cannabinoid product": 20
1. Means any intermediate or final product derived from hemp that: 21
a. Contains cannabinoids in any form; and 22
b. Is intended for human or animal use through any means of 23
application or admi nistration, such as inhalation, ingestion, or 24
topical application; and 25
2. Includes but is not limited to cannabis -infused beverages, as defined 26
in Section 6 of this Act, and any other edible or consumable product 27
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containing tetrahydrocannabinol, regardless of the extraction method 1
used to obtain the tetrahydrocannabinol; 2
(d) "Kratom" has the same meaning as in KRS 217.2201; 3
(e) "Kratom extract" has the same meaning as in KRS 217.2201; 4
(f) "Kratom product" has the same meaning as in KRS 217.2201; 5
(g) "Person" has the same meaning as in Section 36 of this Act; 6
(h) "Retailer" means any person that sells or ships hemp -derived cannabinoid 7
products, kratom extracts, or kratom products for any purpose other than 8
resale: 9
1. At a Kentucky retail location; or 10
2. To a Kentucky address; and 11
(i) "State retail regulatory licens e fee" includes interest accrued at the rate 12
provided by KRS 131.183, all applicable penalties imposed pursuant to this 13
chapter, and all applicable penalties and fees imposed pursuant to KRS 14
131.180, 131.410 to 131.445, and 131.990. 15
(2) On or after July 1, 2027, a state retail regulatory license fee is levied on retailers 16
for the privilege of selling kratom extracts or kratom products in this state at the 17
rate of: 18
(a) Four cents ($0.04) per milligram of mitragynine in kratom product sold if 19
the concentration of kratom is two percent (2%) or less per serving; 20
(b) Four dollars ($4) per milligram of mitragynine in kratom product sold if the 21
concentration of kratom is more than two percent (2%) per serving; 22
(c) Forty cents ($0.40) per milligram of mitragynine i n kratom extract sold if 23
the concentration of kratom is two percent (2%) or less; and 24
(d) Eight dollars ($8) per milligram of mitragynine in kratom extract sold if the 25
concentration of kratom is more than two percent (2%) per serving. 26
(3) On or after July 1, 2027, a state retail regulatory license fee is levied on retailers 27
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for the privilege of selling hemp -derived cannabinoid products in this state at the 1
rate of sixteen cents ($0.16) per milligram or milliliter, as labeled on the product, 2
of delta -9 tetra hydrocannabinol or delta -8 tetrahydrocannabinol or any other 3
form of tetrahydrocannabinol sold. 4
(4) The state retail regulatory license fees shall be: 5
(a) Administered by the Department of Revenue; 6
(b) Transferred to the general fund; and 7
(c) Paid by the retailer as prescribed in administrative regulations promulgated 8
by the Department of Revenue in accordance with KRS Chapter 13A. 9
(5) The retailer is liable for the state retail regulatory license fee. 10
(6) Every retailer shall, by the twentieth day of each month, transmit reports to the 11
Department of Revenue, on the forms the Department of Revenue may prescribe, 12
on the: 13
(a) Total kratom products sold, with a listing containing the description of each 14
type of product sold, which contains the milligrams of mit ragynine per 15
serving and how many servings are in each product; 16
(b) Total mitragynine milligrams contained in the kratom products sold; 17
(c) Total hemp-derived cannabinoid products sold, with a listing containing the 18
description of each type of product sol d which contains the milligrams of 19
delta-9 tetrahydrocannabinol or delta -8 tetrahydrocannabinol or any other 20
form of tetrahydrocannabinol per serving and how many servings are in 21
each product; 22
(d) Total delta-9 tetrahydrocannabinol or delta -8 tetrahydrocannabinol or any 23
other form of tetrahydrocannabinol milligrams contained in the products 24
sold; and 25
(e) Amount of state retail regulatory license fees due. 26
(7) Payment of the state retail regulatory license fee shall be due with the report. 27
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(8) The retailer shall keep and preserve an accurate record of all receipts of its hemp-1
derived cannabinoid products, kratom extracts, and kratom products sold, and 2
state retail regulatory license fees due, together with invoices or other pertinent 3
records and papers required by the Department of Revenue for four (4) years. 4
(9) A retailer or other person shall not: 5
(a) Fail or refuse to make the returns and pay the state retail regulatory license 6
fee prescribed by this section; 7
(b) Refuse to permit the Department of Revenue or any representative 8
appointed by the commissioner of the Department of Revenue in writing to 9
examine his or her records, papers, files, and equipment pertaining to the 10
taxable business; 11
(c) Make an incomplete, false, or fraudulent return, or attempt to d o anything 12
to avoid: 13
1. A full disclosure of the amount of business done; or 14
2. The payment of the whole or any part of the state retail regulatory 15
license fee or penalties due; or 16
(d) Fail to keep and preserve records of the hemp-derived cannabinoid products 17
sold, kratom extracts, or kratom products sold by the retailer to substantia te 18
the reports required by this section. 19
(10) Any person who violates any provision of this section shall be subject to the 20
uniform civil penalties imposed pursuant to KRS 131.180 and interest at the tax 21
interest rate as defined in KRS 131.183. 22
(11) (a) 1. Notwithstanding any other provisions of this chapter to the contrary, 23
the president, vice president, secretary, treasurer, or any other person 24
holding any equivalent corporate office of any corporation subject to 25
this section shall be personally and individually liable, both jointly and 26
severally, for the state retail regulatory license fees imposed by this 27
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section, and neither the corporate dissolution nor withdrawal of the 1
corporation from the state nor the cessation of holding any corporate 2
office shall discharge the foregoing liability of any person. 3
2. The personal and individual liability shall apply to each and every 4
person holding the corporate office at the time the state retail 5
regulatory license fees become or became due. 6
3. A person shall not be personally and individually liable pursuant to 7
this section who had no authority in the management of the business 8
or financial affairs of the corporation at the time that the state retail 9
regulatory license fees imposed by this section become or became due. 10
(b) 1. Notwithstanding any other provision of this chapter, KRS 275.150, 11
362.1-306(3) or predecessor law, or 362.2 -404(3) to the contrary, the 12
managers of a limited liability company, the partners of a limited 13
liability partnership, and the general par tners of a limited liability 14
limited partnership or any other person holding any equivalent office 15
of a limited liability company, limited liability partnership, or limited 16
liability limited partnership subject to this section shall be personally 17
and indiv idually liable, both jointly and severally, for the state retail 18
regulatory license fees imposed by this section. 19
2. Dissolution, withdrawal of the limited liability company, limited 20
liability partnership, or limited liability limited partnership from the 21
state, or the cessation of holding any office shall not discharge the 22
liability of any person. The personal and individual liability shall 23
apply to every manager of a limited liability company, partner of a 24
limited liability partnership, or general partner of a limited liability 25
limited partnership at the time the state retail regulatory license fees 26
becomes or became due. 27
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(12) The Department of Revenue may prescribe forms and promulgate administrative 1
regulations in accordance with KRS Chapter 13A to execu te and administer this 2
section. The state retail regulatory license fee may be paid via electronic funds 3
transfer. The retailer shall provide the department with all protocol 4
documentation and electronic funds transfer data necessary to facilitate the 5
timely transfer of funds. 6
(13) It is the purpose and intent of the General Assembly to impose regulatory license 7
fees on retailers of substances that may have an intoxicating effect on users. It is 8
not the intent of the General Assembly to legalize such activi ties if not otherwise 9
legal. 10
SECTION 4. A NEW SECTION OF KRS CHAPTER 243A IS CREATED TO 11
READ AS FOLLOWS: 12
(1) Any person who violates any provision of Section 2 or 3 of this Act or any 13
administrative regulation promulgate d thereunder shall be guilty of a Class A 14
misdemeanor. 15
(2) Any person who violates any provision of Section 2 or 3 of this Act shall be 16
subject to the uniform civil penalties imposed pursuant to KRS 131.180. 17
(3) Any state wholesale regulatory license fee i mposed by Section 2 of this Act and 18
any state retail regulatory license fee imposed by Section 3 of this Act that is not 19
paid on or before the due date shall bear interest at the tax interest rate as defined 20
in KRS 131.010 from the due date until the date of payment. 21
Section 5. KRS 211.285 is amended to read as follows: 22
(1) There is hereby created the alcohol wellness and responsibility education fund, 23
which shall provide moneys on a matching basis for educational informa tion and 24
materials that deter or eliminate underage drinking. The fund shall consist of 25
moneys generated from: 26
(a) One percent (1%) of the excise tax collected from the sale and distribution of 27
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malt beverages under KRS 243.720 before July 1, 2027;[,] 1
(b) One percent (1%) of the wholesale tax collected from distributors of malt 2
beverages and microbreweries under KRS 243.884 before July 1, 2027; [, 3
and] 4
(c) One-half of one percent (0.5%) of the state retail regulatory license fee 5
collected from the sale of a lcoholic beverages pursuant to Section 1 of this 6
Act on or after July 1, 2027; and 7
(d) All proceeds from public auctions conducted by the Alcoholic Beverage 8
Control Board under KRS 241.060 and 243.540. 9
(2) The alcohol wellness and responsibility education fund shall be established in the 10
State Treasury as a trust and agency account under KRS 45.253. Moneys in the 11
account shall be distributed by the State Treasurer to the Alcohol Wellness and 12
Responsibility Education Corporation, a nonprofit organization tha t is organized 13
under the laws of this state, upon the authorization of the secretary of the Public 14
Protection Cabinet. The moneys shall be awarded to the corporation solely to fund 15
educational programs to deter or eliminate underage drinking and promote al cohol 16
responsibility measures. 17
(3) The secretary of the Public Protection Cabinet shall authorize that moneys from the 18
fund be disbursed to the corporation upon the secretary's receipt of a certification 19
from the corporation showing the moneys the corporat ion has received from malt 20
beverage distributors, microbreweries, auctions, and other private sources since the 21
last certification. The moneys disbursed from the fund shall be equal to the 22
contributions that the corporation has received from its members an d other private 23
sources during that period. The moneys in the fund shall be disbursed in accordance 24
with a schedule established by the secretary, and shall be disbursed until the 25
moneys in the fund are exhausted or until the moneys in the fund lapse in 26
accordance with subsection (4) of this section, whichever comes first. 27
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(4) Moneys that are credited to the fund and not issued to the corporation shall lapse at 1
the end of the fiscal year and shall be returned to the general fund. 2
(5) As a condition of receiving the governmental funds, the corporation's board of 3
directors shall include the following among its directors: 4
(a) All duly elected statewide constitutional officers or designees; 5
(b) The President of the Senate or designee, who shall serve as a nonvoting 6
member; 7
(c) The Speaker of the House or designee, who shall serve as a nonvoting 8
member; 9
(d) The secretary of the Public Protection Cabinet or designee; 10
(e) The commissioner of the Department of Alcoholic Beverage Control or 11
designee; 12
(f) A representative of the malt beverage industry submitted by the Kentucky 13
Beer Wholesalers' Association; 14
(g) A representative of the malt beverage industry submitted by the Kentucky 15
Malt Beverage Council; 16
(h) A representative of the Kentucky Guild of Brewers submitted by the 17
Kentucky Guild of Brewers; and 18
(i)[(h)] A representative of the distilled spirits industry submitted by the 19
Kentucky Distillers' Association. 20
(6) All expenditures of moneys from the fund shall be approved by a majority of those 21
persons set out in subsection (5)(a) and (d) to (h) of this section. If the moneys from 22
the fund are not expended in their entirety, any moneys that remain unused by the 23
corporation at the end of the fiscal year shall be returned to the general fund. 24
(7) Any moneys from the fund that are not expended shall be returned to the general 25
fund upon the dissolution of the corporation. 26
(8) The Alcohol Wellness and Responsibility Education Corporation may accept 27
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applications for grants by Kentucky high schools, col leges and universities, and 1
other entities that promote alcohol responsibility, and the board of directors shall 2
develop criteria for the awarding of any funds by application. 3
(9) Any high school in the Commonwealth of Kentucky that was registered with the 4
Department of Education as of July 1, 2024, may make an application to the 5
Alcohol Wellness and Responsibility Education Corporation by February 28 of 6
each year and shall be granted a minimum of one thousand dollars ($1,000) 7
annually from the funds contri buted by the alcohol wellness and responsibility 8
education fund for the single purpose of supporting "Project Graduation" events. 9
Section 6. KRS 241.010 is amended to read as follows: 10
As used in KRS Chapters 241 to 244, unless the context requires otherwise: 11
(1) "Alcohol" means ethyl alcohol, hydrated oxide of ethyl or spirit of wine, from 12
whatever source or by whatever process it is produced; 13
(2) "Alcoholic beverage" means every liquid, solid, powder, or crystal, whether 14
patented or not, containing alcohol in an amount in excess of more than one percent 15
(1%) of alcohol by volume, which is fit for beverage purposes. It includes distilled 16
spirits, wine, malt beverages, and every spurious or imitation liquor sold as, or 17
under any name commonly used for, alcoholic beverages containing alcohol in an 18
amount in excess of more than one percent (1%) of alcohol by volume [, whether 19
containing any alcohol or not]. It does not include the following products: 20
(a) Medicinal preparations manufactured in accordance with formulas prescribed 21
by the United States Pharmacopoeia, National Formulary, or the American 22
Institute of Homeopathy; 23
(b) Patented, patent, and proprietary medicines; 24
(c) Toilet, medicinal, and antiseptic preparations and solutions; 25
(d) Flavoring extracts and syrups; 26
(e) Denatured alcohol or denatured rum; 27
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(f) Vinegar and preserved sweet cider; 1
(g) Wine for sacramental purposes;[ and] 2
(h) Alcohol unfit fo r beverage purposes that is to be sold for legitimate external 3
use; and 4
(i) Products intended for human consumption containing cannabinoids that 5
have intoxicating properties that change the function of the nervous system 6
and result in alterations of perception, cognition, or behavior; 7
(3) (a) "Alcohol vaporizing device" or "AWOL device" means any device, machine, 8
or process that mixes liquor, spirits, or any other alcohol product with pure 9
oxygen or by any other means produces a vaporized alcoholic product used 10
for human consumption; 11
(b) "Alcohol vaporizing device" or "AWOL device" does not include an inhaler, 12
nebulizer, atomizer, or other device that is designed and intended by the 13
manufacturer to dispense a prescribed or over -the-counter medication or a 14
device installed and used by a licensee under this chapter to demonstrate the 15
aroma of an alcoholic beverage; 16
(4) "Automobile race track" means a facility primarily used for vehicle racing that has a 17
seating capacity of at least thirty thousand (30,000) people; 18
(5) "Barrel-aged and batched cocktail" means an alcoholic beverage that is: 19
(a) Composed of: 20
1. Distilled spirits that have been dispensed from their original sealed 21
container; and 22
2. Other ingredients or alcoholic beverages; 23
(b) Placed into a barrel or container on the premises of a retail licensee; and 24
(c) Dispensed from the barrel or container as a retail sale by the drink; 25
(6) "Bed and breakfast" means a one (1) family dwelling unit that: 26
(a) Has guest rooms or suites used, rented, or hired out for occupancy or that are 27
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occupied for sle eping purposes by persons not members of the single -family 1
unit; 2
(b) Holds a permit under KRS Chapter 219; and 3
(c) Has an innkeeper who resides on the premises or property adjacent to the 4
premises during periods of occupancy; 5
(7) "Board" means the State Al coholic Beverage Control Board created by KRS 6
241.030; 7
(8) "Bottle" means any container which is used for holding alcoholic beverages for the 8
use and sale of alcoholic beverages at retail; 9
(9) "Brewer" means any person who manufactures malt beverages or ow ns, occupies, 10
carries on, works, or conducts any brewery, either alone or through an agent; 11
(10) "Brewery" means any place or premises where malt beverages are manufactured for 12
sale, and includes all offices, granaries, mash rooms, cooling rooms, vaults, y ards, 13
and storerooms connected with the premises; or where any part of the process of the 14
manufacture of malt beverages is carried on; or where any apparatus connected with 15
manufacture is kept or used; or where any of the products of brewing or 16
fermentation are stored or kept; 17
(11) "Building containing licensed premises" means the licensed premises themselves 18
and includes the land, tract of land, or parking lot in which the premises are 19
contained, and any part of any building connected by direct access or b y an 20
entrance which is under the ownership or control of the licensee by lease holdings 21
or ownership; 22
(12) "Cannabinoid" means a compound found in the hemp plant Cannabis sativa L. from 23
a United States Department of Agriculture -sanctioned domestic hemp pro duction 24
program and does not include cannabinoids derived from any other substance; 25
(13) "Cannabis-infused beverage": 26
(a) Means a properly permitted adult -use cannabinoid liquid product intended for 27
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human consumption that has intoxicating properties that c hange the function 1
of the nervous system and results in alterations of perception, cognition, or 2
behavior and shall not contain more than five (5) milligrams of intoxicating 3
adult-use cannabinoids per twelve (12) ounce serving; and 4
(b) Shall not include: 5
1. Medicinal cannabis regulated under KRS Chapter 218B; 6
2. Any type of hemp tincture; and 7
3. Any product containing solely nonintoxicating cannabinoids; 8
(14) "Caterer" means a person operating a food service business that prepares food in a 9
licensed and ins pected commissary, transports the food and alcoholic beverages to 10
the caterer's designated and inspected banquet hall or to an agreed location, and 11
serves the food and alcoholic beverages pursuant to an agreement with another 12
person; 13
(15) "Charitable organization" means a nonprofit entity recognized as exempt from 14
federal taxation under Section 501(c) of the Internal Revenue Code, 26 U.S.C. sec. 15
501(c), or any organization having been established and continuously operating 16
within the Common wealth of Kentucky for charitable purposes for three (3) years 17
and which expends at least sixty percent (60%) of its gross revenue exclusively for 18
religious, educational, literary, civic, fraternal, or patriotic purposes; 19
(16) "Cider" means any fermented f ruit-based beverage containing seven percent (7%) 20
or more alcohol by volume and includes hard cider and perry cider; 21
(17) "City administrator" means city alcoholic beverage control administrator; 22
(18) "Commercial airport" means an airport through which mor e than five hundred 23
thousand (500,000) passengers arrive or depart annually; 24
(19) (a) "Commercial quadricycle" means a vehicle equipped with a minimum of ten 25
(10) pairs of fully operative pedals for propulsion by means of human 26
muscular power and which: 27
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1. Has four (4) wheels; 1
2. Is operated in a manner similar to that of a bicycle; 2
3. Is equipped with a minimum of thirteen (13) seats for passengers; 3
4. Has a unibody design; 4
5. Is equipped with a minimum of four (4) hydraulically operated brakes; 5
6. Is used for commercial tour purposes; 6
7. Is operated by the vehicle owner or an employee of the owner; and 7
8. Has an electrical assist system that shall only be used when traveling to 8
or from its storage location while not carrying passengers. 9
(b) A "commercial quadricycle" is not a motor vehicle as defined in KRS 186.010 10
or 189.010; 11
(20) "Commissioner" means the commissioner of the Department of Alcoholic Beverage 12
Control; 13
(21) "Consumer" means a person, persons, or business organization who purchases 14
alcoholic beverages and who: 15
(a) Does not hold a license or permit issued by the department; 16
(b) Purchases the alcoholic beverages for personal consumption only and not for 17
resale; 18
(c) Is of lawful drinking age; and 19
(d) Receives the alcoholic beverages in territory w here the alcoholic beverages 20
may be lawfully sold or received; 21
(22) "Convention center" means any facility which, in its usual and customary business, 22
provides seating for a minimum of one thousand (1,000) people and offers 23
convention facilities and relate d services for seminars, training and educational 24
purposes, trade association meetings, conventions, or civic and community events 25
or for plays, theatrical productions, or cultural exhibitions; 26
(23) "Convicted" and "conviction" means a finding of guilt res ulting from a plea of 27
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guilty, the decision of a court, or the finding of a jury, irrespective of a 1
pronouncement of judgment or the suspension of the judgment; 2
(24) "County administrator" means county alcoholic beverage control administrator; 3
(25) "Department" means the Department of Alcoholic Beverage Control; 4
(26) "Dining car" means a railroad passenger car that serves meals to consumers on any 5
railroad or Pullman car company; 6
(27) "Discount in the usual course of business" means price reductions, rebates , refunds, 7
and discounts given by wholesalers to distilled spirits and wine retailers pursuant to 8
an agreement made at the time of the sale of the merchandise involved and are 9
considered a part of the sales transaction, constituting reductions in price pur suant 10
to the terms of the sale, irrespective of whether the quantity discount was: 11
(a) Prorated and allowed on each delivery; 12
(b) Given in a lump sum after the entire quantity of merchandise purchased had 13
been delivered; or 14
(c) Based on dollar volume or on the quantity of merchandise purchased; 15
(28) "Distilled spirits" or "spirits" means any product capable of being consumed by a 16
human being which contains alcohol obtained by distilling, mixed with water or 17
other substances in solution, except wine, hard cider, and malt beverages; 18
(29) "Distiller" means any person who is engaged in the business of manufacturing 19
distilled spirits at an y distillery in the state and is registered in the Office of the 20
Collector of Internal Revenue for the United States at Louisville, Kentucky; 21
(30) "Distillery" means any place or premises where distilled spirits are manufactured 22
for sale, and which are reg istered in the office of any collector of internal revenue 23
for the United States. It includes any United States government bonded warehouse; 24
(31) "Distributor" means any person who distributes malt beverages for the purpose of 25
being sold at retail; 26
(32) "Dry" means a territory in which a majority of the electorate voted to prohibit all 27
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forms of retail alcoholic beverage sales through a local option election held under 1
KRS Chapter 242; 2
(33) "Election" means: 3
(a) An election held for the purpose of taking the sense of the people as to the 4
application or discontinuance of alcoholic beverage sales under KRS Chapter 5
242; or 6
(b) Any other election not pertaining to alcoholic beverages; 7
(34) "Horse racetrack" means a facility licensed to conduct a horse race meetin g under 8
KRS Chapter 230; 9
(35) "Hotel" means a hotel, motel, or inn for accommodation of the traveling public, 10
designed primarily to serve transient patrons; 11
(36) "Investigator" means any employee or agent of the department who is regularly 12
employed and who se primary function is to travel from place to place for the 13
purpose of visiting licensees, and any employee or agent of the department who is 14
assigned, temporarily or permanently, by the commissioner to duty outside the main 15
office of the department at Fr ankfort, in connection with the administration of 16
alcoholic beverage statutes; 17
(37) "License" means any license issued pursuant to KRS Chapters 241 to 244; 18
(38) "Licensee" means any person to whom a license has been issued, pursuant to KRS 19
Chapters 241 to 244; 20
(39) "Limited restaurant" means: 21
(a) A facility where the usual and customary business is the preparation and 22
serving of meals to consumers, which has a bona fide kitchen facility, which 23
receives at least seventy percent (70%) of its food and alcoholi c beverage 24
receipts from the sale of food, which maintains a minimum seating capacity of 25
fifty (50) persons for dining, which has no open bar, which requires that 26
alcoholic beverages be sold in conjunction with the sale of a meal, and which 27
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is located in a wet or moist territory under KRS 242.1244; or 1
(b) A facility where the usual and customary business is the preparation and 2
serving of meals to consumers, which has a bona fide kitchen facility, which 3
receives at least seventy percent (70%) of its food and alcoholic beverage 4
receipts from the sale of food, which maintains a minimum seating capacity of 5
one hundred (100) persons of dining, and which is located in a wet or moist 6
territory under KRS 242.1244; 7
(40) "Local administrator" means a city alcoholic beverage control administrator, county 8
alcoholic beverage control administrator, or urban -county alcoholic beverage 9
control administrator; 10
(41) "Malt beverage" means any fermented undistilled alcoholic beverage of any name 11
or description, manufactured from malt wholly or in part, or from any substitute for 12
malt, and includes weak cider; 13
(42) "Manufacture" means distill, rectify, brew, bottle, and operate a winery; 14
(43) "Manufacturer" means a winery, distiller, rectifier, or brewer, and any other person 15
engaged in the production or bottling of alcoholic beverages; 16
(44) "Marina" means a dock or basin providing moorings for boats and offering supply, 17
repair, or other services for remuneration; 18
(45) "Minor" means any person who is not twenty-one (21) years of age or older; 19
(46) "Moist" means a territory in which a majority of the electorate voted to permit 20
limited alcoholic beverage sales by any one (1) or a combination of special limited 21
local option elections authorized by KRS Chapter 242; 22
(47) "Population" means the population figures established by the federal decennial 23
census for a census year or the current yearly population estimates prepared by the 24
Kentucky State Data Center, Urban Studies Center of the University of Louisville, 25
Louisville, Kentucky, for all other years; 26
(48) "Premises" means the land and building in and upon which any business regulated 27
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by alcoholic beverage statutes is operated or carried on. "Premises" shall not 1
include as a single unit two (2) or more separate businesses of one (1) owner on the 2
same lot or tract of land, in the same or in different buildings if physical and 3
permanent separation of the premises is maintained, excluding employee access by 4
keyed entry and emergency exits equipped with crash bars, and each has a separate 5
public entrance accessible directly from the sidewalk or parking lot. Any licensee 6
holding an alcoholic beverage license on July 15, 1998, shall not, by reason of this 7
subsection, be ineligible to continue to hold his or her license or obtain a renewal, 8
of the license; 9
(49) "Primary source of sup ply" or "supplier" means the distiller, winery, brewer, 10
producer, owner of the commodity at the time it becomes a marketable product, 11
bottler, or authorized agent of the brand owner. In the case of imported products, 12
the primary source of supply means eith er the foreign producer, owner, bottler, or 13
agent of the prime importer from, or the exclusive agent in, the United States of the 14
foreign distiller, producer, bottler, or owner; 15
(50) "Private club" means a nonprofit social, fraternal, military, or political organization, 16
club, or nonprofit or for -profit entity maintaining or operating a club room, club 17
rooms, or premises from which the general public is excluded; 18
(51) "Private selection event" means a private event with a licensed distiller during 19
which par ticipating consumers, retail licensees, wholesalers, distributors, or a 20
distillery's own representatives select a single barrel or a blend of barrels of the 21
distiller's products to be specially packaged for the participants; 22
(52) "Private selection package " means a bottle of distilled spirits sourced from the 23
barrel or barrels selected by participating consumers, retail licensees, wholesalers, 24
distributors, microbreweries that hold a quota retail drink or quota retail package 25
license, or a distillery's own representatives during a private selection event; 26
(53) "Public nuisance" means a condition that endangers safety or health, is offensive to 27
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the senses, or obstructs the free use of property so as to interfere with the 1
comfortable enjoyment of life or prope rty by a community or neighborhood or by 2
any considerable number of persons; 3
(54) "Qualified historic site" means: 4
(a) A contributing property with dining facilities for at least fifty (50) persons at 5
tables, booths, or bars where food may be served within a commercial district 6
listed in the National Register of Historic Places; 7
(b) A site that is listed as a National Historic Landmark or in the National 8
Register of Historic Places with dining facilities for at least fifty (50) persons 9
at tables, booths, or bars where food may be served; 10
(c) A distillery which is listed as a National Historic Landmark and which 11
conducts souvenir retail package sales under KRS 243.0305; or 12
(d) A not-for-profit or nonprofit facility listed on the National Register of Historic 13
Places; 14
(55) "Rectifier" means any person who rectifies, purifies, or refines distilled spirits, 15
malt, or wine by any process other than as provided for on distillery premises, and 16
every person who, without rectifying, purifying, or refining distilled spir its by 17
mixing alcoholic beverages with any materials, manufactures any imitations of or 18
compounds liquors for sale under the name of whiskey, brandy, gin, rum, wine, 19
spirits, cordials, bitters, or any other name; 20
(56) "Repackaging" means the placing of alc oholic beverages in any retail container 21
irrespective of the material from which the container is made; 22
(57) "Restaurant" means a facility where the usual and customary business is the 23
preparation and serving of meals to consumers, that has a bona fide kit chen facility, 24
and that receives at least fifty percent (50%) of its food and alcoholic beverage 25
receipts from the sale of food at the premises; 26
(58) "Retail container" means any bottle, can, barrel, or other container which, without a 27
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separable intermedia te container, holds alcoholic beverages and is suitable and 1
destined for sale to a retail outlet, whether it is suitable for delivery or shipment to 2
the consumer or not; 3
(59) "Retail sale" means any sale of alcoholic beverages to a consumer, including thos e 4
transactions taking place in person, electronically, online, by mail, or by telephone; 5
(60) "Retailer" means any licensee who sells and delivers any alcoholic beverage to 6
consumers, except for manufacturers with limited retail sale privileges and direct 7
shipper licensees; 8
(61) "Riverboat" means any boat or vessel with a regular place of mooring in this state 9
that is licensed by the United States Coast Guard to carry forty (40) or more 10
passengers for hire on navigable waters in or adjacent to this state; 11
(62) "Sale" means any transfer, exchange, or barter for consideration, and includes all 12
sales made by any person, whether principal, proprietor, agent, servant, or 13
employee, of any alcoholic beverage; 14
(63) "Service bar" means a bar, counter, shelving, or si milar structure used for storing or 15
stocking supplies of alcoholic beverages that is a workstation where employees 16
prepare alcoholic beverage drinks to be delivered to customers away from the 17
service bar; 18
(64) "Sell" includes solicit or receive an order fo r, keep or expose for sale, keep with 19
intent to sell, and the delivery of any alcoholic beverage; 20
(65) "Small farm winery" means a winery whose wine production is not less than two 21
hundred fifty (250) gallons and not greater than five hundred thousand (500 ,000) 22
gallons in a calendar year; 23
(66) "Souvenir package" means a special package of distilled spirits available from a 24
licensed retailer that is: 25
(a) Available for retail sale at a licensed Kentucky distillery where the distilled 26
spirits were produced or bottled; or 27
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(b) Available for retail sale at a licensed Kentucky distillery but produced or 1
bottled at another of that distiller's licensed distilleries in Kentucky; 2
(67) "State administrator" or "administrator" means the distilled spirits administrator or 3
the malt beverages administrator, or both, as the context requires; 4
(68) (a) "State or national conference" means a formal gathering for people from 5
across the country or across Kentucky intended for consultation, 6
deliberation, discussion, or interchange of opinions focusing on issues 7
relevant to the economy, culture, professional fields, or governance, which 8
takes place in the Commonwealth of Kentucky and is attended by no less 9
than three hundred (300) attendees. 10
(b) "State or national conference" does no t include a political campaign 11
fundraiser; 12
(69)[(68)] "State park" means a state park that has a: 13
(a) Nine (9) or eighteen (18) hole golf course; or 14
(b) Full-service lodge and dining room; 15
(70)[(69)] "Supplemental bar" means a bar, counter, shelving, or similar structure used 16
for serving and selling distilled spirits or wine by the drink for consumption on the 17
licensed premises to guests and patrons from additional locations other than the 18
main bar; 19
(71)[(70)] "Territory" means a county, city, district, or precinct; 20
(72)[(71)] "Urban-county administrator" means an urban -county alcoholic beverage 21
control administrator; 22
(73)[(72)] "Valid identification document" means an unexpired, government-issued form 23
of identification that contains the photograph and date of birth of the individual to 24
whom it is issued; 25
(74)[(73)] "Vehicle" means any device or animal used to carry, convey, transport, or 26
otherwise move alcoholic beverages or any products, equipment, or appurtenances 27
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used to manufacture, bottle, or sell these beverages; 1
(75)[(74)] "Vintage distilled spirit" means: 2
(a) A private selection package; or 3
(b) A package or packages of distilled spirits that: 4
1. Are in their original manufacturer's unopened container; 5
2. Are not owned by a distillery; and 6
3. Are not otherwise available for purchase from a licensed wholesaler 7
within the Commonwealth; 8
(76)[(75)] (a) "Vintage distilled spirits seller" means a nonlicensed person at least 9
twenty-one (21) years of age who is: 10
1. An administrator, executor, receiver, or other fiduciary who receives and 11
sells vintage distilled spirits in execution of the person's fiduciary 12
capacity; 13
2. A creditor who receives or takes possession of vintage distilled spirits as 14
security for, or in payment of, debt, in whole or in part; 15
3. A public officer or court official who levies on vintage distilled spirits 16
under order or process of any court or magistrate to sell the vintage 17
distilled spirits in satisfaction of the order or process; or 18
4. Any other person not engaged in the business of selling alcoholic 19
beverages. 20
(b) "Vintage distilled spirits seller" does not mean: 21
1. A person selling alcoholic beverages as part of an approved KRS 22
243.630 transfer; or 23
2. A person selling alcoholic beverages as authorized by KRS 243.540; 24
(77)[(76)] "Warehouse" means any place in which alcoholic beverages are housed or 25
stored; 26
(78)[(77)] "Weak cider" means any fermented fruit-based beverage containing more than 27
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one percent (1%) but less than seven percent (7%) alcohol by volume; 1
(79)[(78)] "Wet" means a territory in which a majority of the electorate voted to permit 2
all forms of retail alcoholic beverage sales by a local option election under KRS 3
242.050 or 242.125 on the following question: "Are you in f avor of the sale of 4
alcoholic beverages in (name of territory)?"; 5
(80)[(79)] "Wholesale sale" means a sale to any person for the purpose of resale; 6
(81)[(80)] "Wholesaler" means any person who distributes alcoholic beverages for the 7
purpose of being sold at retail, but it shall not include a subsidiary of a 8
manufacturer or cooperative of a retail outlet; 9
(82) (a)[(81)] "Wine" means the product of the normal alco holic fermentation of the 10
juices of fruits, with the usual processes of manufacture and normal additions, 11
and includes champagne and sparkling and fortified wine of an alcoholic 12
content not to exceed twenty-four percent (24%) by volume. 13
(b) "Wine"[It] includes: 14
1. Sake, cider, hard cider, and perry cider; and[ also includes] 15
2. Preparations or mixtures vended in retail containers if these preparations 16
or mixtures contain not more than fifteen percent (15%) of alcohol by 17
volume.[ It] 18
(c) "Wine" does not include weak cider; and 19
(83)[(82)] "Winery" means any place or premises in which wine is manufactured from 20
any fruit, or brandies are distilled as a by -product of wine or other fruit, or cordials 21
are compounded, except a place or premises that manufactures wine for sacramental 22
purposes exclusively. 23
Section 7. KRS 241.069 is amended to read as follows: 24
(1) Any city, including any city located in a wet or dry county, county, or urban -county 25
government may petition the board: 26
(a) For an increase in the number of quota retail package licenses available in its 27
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jurisdiction; or 1
(b) For an increase in the number o f quota retail package licenses available in the 2
county, if the number of quota retail package licenses is governed by KRS 3
241.066. 4
A request for an increase shall not exceed the ratio of one (1) per every one 5
thousand five hundred (1,500) residents. 6
(2) The board shall consider the following factors when deciding whether to grant the 7
increase: 8
(a) Population served by the city, county, or urban-county government; 9
(b) Estimated total retail sales of the city, county, or urban-county government for 10
the most recent past fiscal year; 11
(c) Estimated retail sales per capita for the most recent past fiscal year; 12
(d) Estimated total alcohol sales in the city, county, or urban -county government 13
for the most recent past fiscal year; 14
(e) Tourist destinations in the area, if applicable; and 15
(f) Other economic and commercial data offered to show the capacity to support 16
additional licenses. 17
(3) The board shall grant the request if the information supplied supports the requested 18
increase[, and shall begin the process of fi ling an amendment to its administrative 19
regulation to register the increase. Additional licenses shall not be issued until the 20
administrative regulation process is complete and the amendment is adopted]. 21
(4) If the board determines the information supplied does not support a quota increase, 22
it shall notify the city, county, or urban -county government of its decision by 23
registered mail at the address given in the request. The city, county, or urban-county 24
government shall have thirty (30) days from the date of the mailing to file a written 25
request for a hearing before the board regarding its request for an increase. 26
Section 8. KRS 243.020 is amended to read as follows: 27
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(1) A person shall not do any act authorized by any kin d of license with respect to the 1
manufacture, storage, sale, purchase, transporting, or other traffic in alcoholic 2
beverages or the distribution, retail sale, or transportation of cannabis -infused 3
beverages unless the person holds or is an independent contractor, agent, servant, or 4
employee of a person who holds the kind of license that authorizes the act, or is a 5
third party utilized by a direct shipper licensee as set forth in KRS 243.027. 6
(2) The holding of any permit from the United States government to traffic in alcoholic 7
beverages without the corresponding requisite state and local licenses shall in all 8
cases raise a rebuttable presumption that the holder of the United States permit is 9
unlawfully trafficking in alcoholic beverages. 10
(3) Except as permi tted by KRS 243.033, 243.036, 243.155, 243.157, and 243.260, a 11
person, conducting a place of business patronized by the public, who is not a 12
licensee authorized to sell alcoholic beverages, shall not permit any person to sell, 13
barter, loan, give away, or drink alcoholic beverages on the premises of the place of 14
business. 15
(4) A licensee shall not permit any consumer to possess, give away, or drink alcoholic 16
beverages or cannabis -infused beverages on the licensed premises that are not 17
purchased from the licensee. 18
(5) In a moist territory, the only types of licenses that may be i ssued are those that 19
directly correspond with the types of sales approved by the voters through moist 20
elections within the territory, unless otherwise specifically authorized by statute. 21
(6) If a licensee holds two (2) or more licenses, only the specific l icense for which the 22
licensee has violated the terms shall be subject to suspension or revocation. 23
(7) Notwithstanding subsections (3) and (4) of this section, with the written permission 24
of a licensed entertainment destination center: 25
(a) A retail drink l icensee located wholly within a licensed entertainment 26
destination center or that has a storefront sharing a physical boundary with 27
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that licensed entertainment destination center may allow persons on the 1
licensee's premises to possess and drink alcoholic b everages that were 2
purchased from another retail drink licensee located wholly within, or that has 3
a storefront sharing a physical boundary with, the licensed entertainment 4
destination center; and 5
(b) A nonlicensed place of business that is located wholly within a licensed 6
entertainment destination center or that has a storefront sharing a physical 7
boundary with that licensed entertainment destination center may allow 8
persons on its property to possess and drink alcoholic beverages that were 9
purchased from a retail drink licensee located wholly within, or that has a 10
storefront sharing a physical boundary with, the licensed entertainment 11
destination center. 12
Section 9. KRS 243.030 is amended to read as follows: 13
The following licenses that authorize traffic in distilled spirits and wine and in cannabis -14
infused beverages may be issued by the distilled spirits administrator. Licenses that 15
authorize traffic in all alcoholic beverages may be issued by both the distilled spirits 16
administrator and malt beverages administrator. The licenses and their accompanying 17
fees are as follows: 18
(1) Distiller's license: 19
(a) Class A, per annum .......................................................... $2,980.00[$3,090.00] 20
(b) Class B (craft distillery), per annum .................................... $890.00[$1,000.00] 21
(c) Off-premises retail sales outlet, per annum ............................................$300.00 22
(2) Rectifier's license: 23
(a) Class A, per annum .............................................................................$2,580.00 24
(b) Class B (craft rectifier), per annum ........................................................$825.00 25
(3) Winery license, per annum ..........................................................................$1,030.00 26
(4) Small farm winery license, per annum ...........................................................$110.00 27
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(a) Small farm winery off-premises retail license, per annum ......................$30.00 1
(5) Wholesaler's license, per annum ..................................................................$2,060.00 2
(6) Quota retail package license, per annum .........................................................$570.00 3
(7) Quota retail drink license, per annum ..............................................................$620.00 4
(8) Transporter's license, per annum ....................................................................$210.00 5
(9) Special nonbeverage alcohol license, per annum .............................................$60.00 6
(10) Special agent's or solicitor's license, per annum ...............................................$30.00 7
(11) Bottling house or bottling house storage license, per annum ......... .............$1,030.00 8
(12) Special temporary license, per event ..............................................................$100.00 9
(13) Special Sunday retail drink license, per annum ...............................................$520.00 10
(14) Caterer's license, per annum ...........................................................................$830.00 11
(15) Special temporary alcoholic beverage auction license, per event ...................$100.00 12
(16) Extended hours supplemental license, per annum .......................................$2,060.00 13
(17) Hotel in-room license, per annum ...................................................................$210.00 14
(18) Air transporter license, per annum ..................................................................$520.00 15
(19) Sampling license, per annum ...........................................................................$110.00 16
(20) Replacement or duplicate license ......................................................................$25.00 17
(21) Entertainment destination center license: 18
(a) When the licensee is a city, county, urban-county government, 19
consolidated local government, charter county government, or 20
unified local government, per annum .................................................$2,577.00 21
(b) All other licensees, per annum ............................................................$7,730.00 22
(22) Limited restaurant license, per annum .............................................................$780.00 23
(23) Limited golf course license, per annum ...........................................................$720.00 24
(24) Small farm winery wholesaler's license, per annum .......................................$110.00 25
(25) Qualified historic site license, per annum ....................................................$1,030.00 26
(26) Nonquota type 1 license, per annum ........................ ...................................$4,120.00 27
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(27) Nonquota type 2 license, per annum ................................................................$830.00 1
(28) Nonquota type 3 license, per annum ................................................................$310.00 2
(29) Distilled spirits and wine storage license, per annum ..................................$620.00 3
(30) Out-of-state distilled spirits and wine supplier's license, per annum ...........$1,550.00 4
(31) Limited out-of-state distilled spirits and wine supplier's 5
license, per annum ..........................................................................................$260.00 6
(32) Authorized public consumption license, per annum ........................................$250.00 7
(33) Direct shipper Type A license, per annum.......................................................$100.00 8
(34) Limited nonquota package license, per annum ................................................$300.00 9
(35) Vintage distilled spirits license, per annum .....................................................$300.00 10
(36) Cannabis-infused beverage retail package license, per annum .....................$2,000.00 11
(37) Cannabis-infused beverage distributor's license, per annum ........................$1,000.00 12
(38) Cannabis-infused beverage distributor's license, 13
supplemental, per annum ..............................................................................$1,000.00 14
(39) Direct shipper Type B license, per annum ....................................................$1,000.00 15
(40) Souvenir package sales license, per annum ...................................................$110.00 16
(41) A nonrefundable fee of sixty dollars ($60) shall be charged to process each new 17
transitional license pursuant to KRS 243.045. 18
(42)[(41)] Other special licenses th e board finds necessary for the proper regulation and 19
control of the traffic in distilled spirits and wine and provides for by administrative 20
regulation. In establishing the amount of license taxes that are required to be fixed 21
by the board, it shall have regard for the value of the privilege granted. 22
(43)[(42)] The fee for each of the first five (5) supplemental bar licenses shall be the 23
same as the fee for the primary retail drink license. There shall be no charge for 24
each supplemental license issued in e xcess of five (5) to the same licensee at the 25
same premises. 26
A nonrefundable application fee of fifty dollars ($50) shall be charged to process each 27
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new application under this section, except for subsections (4), (8), (9), (10), (12), (15), 1
(19), and (20) of this section. The application fee shall be applied to the licensing fee if 2
the license is issued; otherwise it shall be retained by the department. 3
Section 10. KRS 243.0305 is amended to read as follows: 4
(1) Any licensed Kentucky distiller that is located in wet territory or in any precinct 5
that has authorized the limited sale of alcoholic beverages at distilleries under KRS 6
242.1243 and that has a gift shop or other retail outlet on its premises may conduct 7
the activities permitted under this section as a part of its distiller's license. 8
(2) (a) For purposes of all retail drink and package sales that occur pursuant to 9
subsection (3), (4), (7), (9), (10), (12), or (13) of this section, the distillery 10
shall: 11
1. Be permit ted to transfer its products from the distillery proper to the 12
location where those retail sales occur without having to transfer 13
physical possession of those distilled spirits to a licensed wholesaler; 14
and 15
2. Without otherwise reporting those distilled sp irits to a licensed 16
wholesaler, report those retail sales and pay all taxes required to the 17
Department of Revenue at the time and in the manner required by the 18
Department of Revenue in accordance with its powers under KRS 19
131.130(3). 20
(b)[ 1.] A distiller s elling distilled spirits in accordance with this 21
subsection shall pay all state regulatory license fees [wholesale sales 22
taxes] due under Sections 1 and 2 of this Act [KRS 243.884] . For the 23
purposes of this subsection, "selling"["wholesale sales"] means a sa le 24
of distilled spirits made by a distiller under subsection (3)(b), (4), (7), 25
(9), (10), (12), and (13) of this section, if required by Section 1 or 26
Section 2 of this Act [KRS 243.884], excluding sales made by a distiller 27
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under subsection (4)(a)3. and (b) of this section that utilize a licensed 1
wholesaler.[ 2
2. A distiller shall pay the excise tax on distilled spirits in accordance with 3
KRS 243.720 and 243.730.] 4
(c) All other distilled spirits that are produced by the distillery shall be sold and 5
physically transferred in compliance with all other relevant provisions of KRS 6
Chapters 241 to 244. 7
(3) If a distiller holds a souvenir package sales license, it may sell its own private 8
selection packages and souvenir packages at retail: 9
(a) To consumers in accordance with KRS 243.027 to 243.029 if it holds a direct 10
shipper license; and 11
(b) To distillery visitors of legal drinking age, in quantities not to exceed an 12
aggregate of nine (9) liters per purchaser per day. 13
(4) If a distiller holds a souvenir package sales license, it may conduct private 14
selection events and sell private selection packages at retail, as follows: 15
(a) Distillers may sell private selection packages to consumers who participated 16
in a private selection event only by: 17
1. Shipping the private selec tion packages in accordance with KRS 18
243.027 to 243.029 if the distiller holds a direct shipper license, but 19
these sales and shipments shall be exempt from the quantity limitations 20
established in KRS 243.028(1); 21
2. Selling the private selection packages to the participating consumers 22
directly from the distillery premises, but these sales shall be exempt 23
from the quantity limitations established in subsection (3)(b) of this 24
section; or 25
3. Selling the private selection packages through a wholesaler and to a 26
licensed retailer of the consumer's choice. The distillery and 27
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wholesaler's cooperation in facilitating the sale of the private selection 1
packages to the retailer of the consumer's choice shall not be deemed a 2
violation of KRS 244.240. 3
(b) Except as provided in KRS 243.036, distillers may sell private selection 4
packages to retail licensees that participated in a private selection event only 5
through a licensed wholesaler. 6
(c) A distillery shall make available for purch ase not less than seventy percent 7
(70%) of its annual private selection packages to licensed wholesalers and 8
shall maintain records of such transactions in accordance with KRS 244.150. 9
(d) Distillers may sell private selection packages to wine and distille d spirits 10
wholesalers, malt beverage distributors, and microbreweries that hold a quota 11
retail drink or quota retail package license that participated in a private 12
selection event if the private selection packages resulting from the event are 13
sold only through a licensed retailer. 14
(5) Hours of sale for souvenir packages sold at retail and private selection packages 15
sold at retail shall be in conformity with KRS 244.290(3). 16
(6) Except as provided in this section, souvenir package and private selection packag e 17
sales to distillery visitors shall be governed by all the statutes and administrative 18
regulations governing the retail sale of distilled spirits by the package. 19
(7) Souvenir packages sold to distillery visitors under subsection (3)(b) of this section, 20
which are not made available to wholesalers licensed in Kentucky or elsewhere, 21
shall be registered by the licensed distiller with the department and shall be sold 22
exclusively to in-person distillery visitors in quantities not to exceed three (3) liters 23
per person per day. 24
(8) Notwithstanding any provision of KRS 244.050 to the contrary, a distillery holding 25
a sampling license may allow visitors to sample distilled spirits under the following 26
conditions: 27
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(a) Sampling shall be permitted only on the licensed pre mises during regular 1
business hours; 2
(b) A distillery shall not charge for the samples; and 3
(c) A distillery shall not provide more than one and three -fourths (1-3/4) ounces 4
of samples per visitor per day, except in connection with a private selection 5
event. 6
(9) Notwithstanding the provisions of KRS 243.110, in accordance with this section, a 7
distillery located in wet territory or in any territory that has authorized the limited 8
sale of alcoholic beverages under an election held pursuant to KRS 242.1243 may: 9
(a) Hold an NQ2 retail drink license for the sale of alcoholic beverages on the 10
distillery premises; and 11
(b) Employ persons to engage in the sale or service of alcohol under an NQ2 12
license, if each employee completes the department's Server Training in 13
Alcohol Regulations program within thirty (30) days of beginning 14
employment. 15
(10) A distiller may sell to consumers at fairs, festivals, and other similar types of events 16
located in wet territory. A distiller may: 17
(a) Sell alcoholic beverages by the drink, containing spirits distilled or bottled on 18
the premises of the distillery; 19
(b) Sell by the package in quantities not to exceed nine (9) liters per person, per 20
day; and 21
(c) Serve complimentary samples not to exceed one and three -fourths (1 -3/4) 22
ounces per person, per day. 23
(11) A distiller may offer for sale in its gift shop products that were produced in 24
collaboration with a brewer or microbrewer, except that: 25
(a) These packages shall not be exclusive to the distiller's gift shop; and 26
(b) The distiller shall purchase the jointly branded souvenir package only from a 27
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licensed malt beverage distributor or a microbrewery pursuant to KRS 1
243.157(1)(f). A microbrewery selling and delivering the jointly branded 2
souvenir package directly to a distiller under this sub section shall provide 3
notice to the distributor of any self -distribution delivery by electronic or other 4
means. 5
(12) (a) A distiller that holds a Class B distiller's license but does not hold a Class A 6
distiller's license under KRS 243.030 may sell and del iver to any licensed 7
retailer up to five thousand (5,000) gallons of distilled spirits annually, sold 8
under a brand name owned or exclusively licensed to the distillery, provided 9
the distilled spirits were: 10
1. Produced by the distillery; 11
2. Produced for the distillery under a written contract with another licensed 12
manufacturer; or 13
3. Bottled for or by the distillery. 14
(b) Any products sold and delivered under this subsection that are not otherwise 15
registered by a licensed wholesaler shall be registered by the distillery with 16
the department. 17
(c) Any products sold and delivered under this subsection shall be delivered by 18
the distillery in vehicles owned and operated by the distillery, displaying the 19
distillery's name and license number. 20
(d) The distillery is responsible for payment of all applicable taxes and reporting 21
of self-distributed distilled spirits. 22
(e) The distillery may extend credit on distilled spirits sold to retail licensees for a 23
period not to exceed thirty (30) days from the date of invoice, with the date of 24
invoice included in the total number of days. 25
(f) A distillery shall report self-distribution sales under this subsection as follows: 26
1. For a sale of in excess of nine (9) liters to any given retailer on any 27
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given day, the distillery shall provide at least twenty -four (24) hours 1
advance written or electronic notice to wholesalers that have an existing 2
business relationship with the distillery and that distribute the products 3
the distillery is self-distributing. If advance notice is not practicable, the 4
distillery shall notify the wholesaler within one (1) business day of 5
delivery; 6
2. A distillery shall submit a quarterly report of its self -distribution sales 7
under this subsection to wholesalers that have an existing business 8
relationship with the distillery and that distribute the products the 9
distillery is self-distributing. The quarterly report shall describe the type, 10
quantity, and price of the product that was self -distributed, the retail 11
delivery location, and the date of delivery of the self-distribution sales in 12
the most recently completed quarter preceding the due date of the report; 13
and 14
3. Each distillery engaging in self -distribution sales under this subsection 15
shall report to the department the total number of gallons self-distributed 16
annually at the time of the renewal of its Class B distiller's license. 17
(13) A distiller that sells souvenir packages and serves complimentary samples in 18
accordance with this section at any of its licensed premises may, for each such 19
premises, maintain one (1) separately licensed off -premises retail sales outlet and 20
engage in the activities and hold the licenses authorize d in subsections (3), (4), (8), 21
(9), (11), and (12) of this section if the off -premises retail sales outlet premises are 22
located in wet territory or in a precinct that has authorized alcoholic beverage sales 23
by the distillery under KRS 242.1243. The distil ler shall pay the fee required under 24
KRS 243.030 for each off-premises retail sales outlet it maintains. 25
(14) Except as expressly stated in this section, this section does not exempt the holder of 26
a distiller's license from: 27
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(a) The provisions of KRS Chapters 241 to 244; 1
(b) The administrative regulations of the board;[ and] 2
(c) Regulation by the board at all the distiller's licensed premises; and 3
(d) The state regulatory license fees imposed by Sections 1 and 2 of this Act. 4
(15) A distiller shall only sell souvenir packages pursuant to this section if it also 5
holds a souvenir package sales license. 6
(16) Nothing in this section shall be construed to vit iate the policy of this 7
Commonwealth supporting an orderly three (3) tier system for the production and 8
sale of alcoholic beverages. 9
(17) A distiller may permit leashed dogs on its premises, consistent with any applicable 10
health or safety codes. 11
Section 11. KRS 243.033 is amended to read as follows: 12
(1) A caterer's license may be issued as a supplementary license to a caterer that holds a 13
quota retail package license, a quota retail drink license, an NQ1 license, an NQ2 14
license, or a limited restaurant license. 15
(2) The caterer's license may be issued as a primary license to a caterer in any wet 16
territory or in any moist territory under KRS 242.1244 for the premises that serves 17
as the caterer's commissary and designated ban quet hall. A[No] primary caterer's 18
license shall not authorize alcoholic beverage sales at a premises that operates as a 19
restaurant. The alcoholic beverage stock of the caterer shall be kept under lock and 20
key at the licensed premises during the time that the alcoholic beverages are not 21
being used in conjunction with a catered function. 22
(3) The caterer's license shall authorize the caterer to: 23
(a) Purchase and store alcoholic beverages in the manner prescribed in KRS 24
243.088, 243.250, and 244.260; 25
(b) Transport, sell, serve, and deliver alcoholic beverages by the drink at locations 26
away from the licensed premises or at the caterer's designated banquet hall in 27
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conjunction with the catering of food and alcoholic beverages for a customer 1
and the customer's guests, in: 2
1. Cities and counties established as moist territory under KRS 242.1244 if 3
the receipts from the catering of food at any catered event are at least 4
seventy percent (70%) of the gross receipts from the catering of both 5
food and alcoholic beverages; 6
2. Precincts established as moist territory if the receipts from the catering 7
of food at any catered event are at least ten percent (10%) of the gross 8
receipts from the catering of both food and alcoholic beverages. This 9
subparagraph shall supersede any c onflicting provisions of KRS 10
Chapters 241 to 244; 11
3. Wet cities and counties in which quota retail drink licenses are not 12
available if the receipts from the catering of food at any catered event 13
are at least fifty percent (50%) of the gross receipts from t he catering of 14
both food and alcoholic beverages; or 15
4. All other wet territory if the receipts from the catering of food at any 16
catered event are at least thirty -five percent (35%) of the gross receipts 17
from the catering of both food and alcoholic beverages; 18
(c) Receive and fill telephone orders for alcoholic beverages in conjunction with 19
the ordering of food for a catered event; and 20
(d) Receive payment for alcoholic beverages served at a catered event on a by -21
the-drink, cash bar, or by -the-event basis. The caterer may bill the customer 22
for by -the-function sale s of alcoholic beverages in the usual course of the 23
caterer's business. 24
(4) A caterer licensee shall not cater alcoholic beverages at locations for which retail 25
alcoholic beverage licenses or special temporary licenses have been issued. A 26
caterer licensee may cater a charitable or nonprofit fundraising event or a state or 27
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national conference for which a special temporary alcoholic beverage auction 1
license has been issued under KRS 243.036. 2
(5) A caterer licensee shall not cater alcoholic beverages on Sunday except in territory 3
in which the Sunday sale of alcoholic beverages is permitted under the provisions 4
of KRS 244.290 and 244.480. 5
(6) The location at which alcoholic beverages are sold, served, and delivered by a 6
caterer, pursuant to this section, shall not constitute a public place for the purpose of 7
KRS Chapter 222. If the location is a multi -unit structure, only the unit or units at 8
which the function being catered is held shall be excluded from the public place 9
provisions of KRS Chapter 222. 10
(7) The ca terer licensee shall post a copy of the licensee's caterer's license at the 11
location of the function for which alcoholic beverages are catered. 12
(8) All restrictions and prohibitions applying to a quota retail drink licensee and an 13
NQ4 retail malt beverage drink licensee not inconsistent with this section shall 14
apply to the caterer licensee. 15
(9) The caterer licensee shall maintain records as set forth in KRS 244.150 and in 16
administrative regulations promulgated by the board. 17
(10) Notwithstanding subsection ( 3)(b) of this section, a caterer may serve alcoholic 18
beverages to guests who are twenty-one (21) years of age or older at a private event 19
in dry territory if: 20
(a) The alcoholic beverages were lawfully purchased in a wet or moist territory: 21
1. By an individual; or 22
2. At the caterer's licensed premises in wet or moist territory; and 23
(b) The alcoholic beverages are not sold in dry territory to guests at the private 24
residence or private event regardless of whether the venue is a public place. 25
Section 12. KRS 243.036 is amended to read as follows: 26
(1) A special temporary alcoholic beverage auction license may be issued to: 27
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(a) An auctioneer licensed under KRS Chapter 330;[ or to ] 1
(b) A charitable organization;[ or ] 2
(c) A nonprofit organization; or 3
(d) The organizer or sponsor of a state or national conference. 4
(2) A special temporary alcoholic beverage auction license issued to a charitable or 5
nonprofit organization or to the organizer or sponsor of a state or national 6
conference shall authorize the holder to: 7
(a) Purchase, transport, receive, possess, store, sell, and deliver alcoholic 8
beverages by the package or by the drink to be sold by auction or raffle or 9
given away or served or consumed at charity or nonprofit events or at state or 10
national conferences; 11
(b) Purchase, transport, receive, possess, store, sell, and deliver limited specially 12
labeled bottles of alcoholic beverages to be sold or given away at charity or 13
nonprofit events or state or national conferences; 14
(c) Obtain alcoholic beverages from distillers, rectifiers, wineries, small farm 15
wineries, brewers, microbreweries, wholesalers, distributors, retailers, or any 16
other person, by gift or donation, for the purpose of charity or nonprofit 17
events or state or national conferences; and 18
(d) Receive payment for alcoholic beverages sold at events. 19
(3) For a charitable or nonprofit organization or a state or national conference -20
sponsored auction: 21
(a) Each alcoholic beverage auction or raffle [ conducted by a charitable 22
organization] shall be subject to all restrictions and limitations contained in 23
KRS Chapters 241 to 244 and the administrative regulations issued under 24
those chapters and shall be authori zed only on the days and only during the 25
hours that the sale of alcoholic beverages is otherwise authorized in the 26
county or municipality; and 27
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(b) The location at which the alcoholic beverages are auctioned, raffled, or 1
consumed under this section shall not constitute a public place for the purpose 2
of KRS Chapter 222. Charitable ,[ or] nonprofit, or state or national 3
conference-sponsored events may be conducted on licensed or unlicensed 4
premises. The [ charitable] organization possessing a special temporary 5
alcoholic beverage auction license shall post a copy of the license at the 6
location of the event. 7
(4) An auctioneer holding a special temporary alcoholic beverage auction license may: 8
(a) Transport, receive, possess, store, advertise, auction, sell, deliver, and ship 9
alcoholic beverages either sold or intended for sale at auction by the licensee; 10
(b) Sell only alcoholic beverages at auction that: 11
1. Were previously lawfully sold at retail; and 12
2. Are in their original manufacturer's unopened container; 13
(c) Deliver and ship any alcoholic beverages sold at an auction directly to the 14
consumer who purchased the alcoholic beverages. Any shipme nt to a 15
consumer outside of this state is subject to all applicable laws of the 16
jurisdiction in which that consumer is located. When shipping alcoholic 17
beverages directly to a consumer in this state, the auctioneer holder of the 18
license shall: 19
1. Ensure that the shipping label on each container containing the alcoholic 20
beverages conspicuously states the following: "CONTAINS 21
ALCOHOL: SIGNATURE OF PERSON AGE 21 OR OLDER 22
REQUIRED FOR DELIVERY"; 23
2. Obtain the signature of a person who is at least twenty -one (21) years of 24
age at the delivery address prior to delivery, after requiring that person 25
to demonstrate that he or she is at least twenty -one (21) years of age by 26
providing a valid identification document; and 27
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3. Not ship the alcoholic beverages to any addres s in this state located in 1
dry territory; and 2
(d) Conduct the auction on premises licensed by the department, unlicensed 3
premises, or online. 4
(5) A special temporary alcoholic beverage auction conducted by an auctioneer shall 5
be: 6
(a) Subject to all restric tions and limitations contained in KRS Chapters 241 to 7
244 and the administrative regulations issued under those chapters; 8
(b) Separate from any other type of alcoholic beverage auction authorized under 9
KRS Chapters 241 to 244, but may be combined with oth er types of auctions 10
authorized under KRS Chapter 330; 11
(c) Authorized for in-person live auctions and online auction closings only on the 12
days and only during the hours that the sale of alcoholic beverages is 13
otherwise authorized in the county or municipal ity where the live auction is 14
held or, for an online auction, the physical location of the alcoholic beverages 15
being sold; and 16
(d) Subject to the auction and auctioneer requirements of KRS Chapter 330. 17
(6) An auctioneer conducting a special temporary alcoholic beverage auction shall: 18
(a) Post a copy of its special temporary alcoholic beverage auction license and 19
auctioneer license at the location of the event for in -person auctions and on 20
the auction website for online auctions; and 21
(b) Not hold any other type of alcoholic beverage license. 22
(7) Alcoholic beverages shall only be sold by an auctioneer under a special temporary 23
alcoholic beverage auction license if the alcoholic beverages were not purchased or 24
attained for the purpose of resale at auction and in the following circumstances: 25
(a) As an "Estate Auction," or included in such auction where the alcoholic 26
beverages being offered at auction are the property belonging to the estate of 27
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one (1) or more deceased persons and are being offered by: 1
1. The direction and authority of the authorized executor or administrator; 2
2. Court order; or 3
3. The direction or on behalf of a surviving spouse or direct heirs; 4
(b) As a "Living Estate Auction" or "Downsizing Auction" or included in such 5
auction where the alcohol ic beverages being offered at auction are the 6
property belonging to a person or persons of a household that is in transition 7
due to one (1) of the following life-changing situations: 8
1. One (1) or more members of the household moving into a retirement 9
home, nursing home, assisted living home, or a smaller residence; or 10
2. Combining one (1) household with another; or 11
(c) As a partial or comp lete disbursement of an alcoholic beverage collection 12
consisting of more than one (1) package that has been collected by the same 13
individual or household. An individual or household shall not sell collections 14
at auction more than once every three (3) years. 15
(8) (a) A person shall not purchase alcoholic beverages from an auctioneer at a 16
special temporary alcoholic beverage auction unless that person may lawfully 17
receive or possess the alcoholic beverages. 18
(b) Nothing in this section shall prevent a vintage d istilled spirits licensee from 19
purchasing alcoholic beverages at auction if the alcoholic beverages qualify as 20
vintage distilled spirits. 21
(9) All advertising for an auctioneer special temporary alcoholic beverage auction 22
shall: 23
(a) Show the name and licens e number for the special temporary alcoholic 24
beverage auction license and the auctioneer license; and 25
(b) Conform to all advertising requirements and restrictions for auctions 26
contained in KRS Chapter 330 and any administrative regulations 27
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promulgated under that chapter. 1
(10) If a person ceases to be licensed as an auctioneer under KRS Chapter 330, the 2
person's special temporary alcoholic beverage auction license shall be automatically 3
suspended until the person reestablishes licensure as an auctioneer. 4
(11) An auctioneer holding a special temporary alcoholic beverage auction license shall 5
file a quarterly report with the department, which shall be established and 6
maintained by the department, utilizing a form prescribed by the department that 7
includes the following information: 8
(a) The number of alcoholic beverage packages auctioned in the preceding three 9
(3) months in total, with each purchase matched to the individuals who both 10
sold and purchased the alcoholic beverages; 11
(b) The date of each purchase; 12
(c) The name, address, and phone number of each individual who sold and 13
purchased the alcoholic beverages; 14
(d) A detailed description of the alcoholic beverages purchased, including the 15
brand name, number of packages, and the size of the packages; and 16
(e) Whether each alcoholic beverage package was purchased in -person, delivered 17
in-person, or shipped. 18
(12) A special temporary alcoholic beverage auction license shall not be issued for any 19
period longer than thirty (30) days. 20
(13) Notwithstanding any other provis ion of KRS Chapters 241 to 244, a distiller, 21
rectifier, winery, small farm winery, brewer, microbrewery, wholesaler, distributor, 22
or retailer may donate, give away, or deliver any of its products to a charitable or 23
nonprofit organization or the organizer o r sponsor of a state or national 24
conference possessing a special temporary alcoholic beverage auction license under 25
this section. 26
(14) All restrictions and prohibitions applying to an alcoholic beverage retail package 27
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and alcoholic beverage by the drink li cense, not inconsistent with this section, shall 1
apply to a special temporary alcoholic beverage auction license. 2
Section 13. KRS 243.039 is amended to read as follows: 3
(1) A limited golf course license may be issued to an establishment that is a nine (9) or 4
an eighteen (18) hole golf course that meets United States Golf Association criteria 5
as a regulation golf course as long as the establishment is within: 6
(a) Any wet territory;[ or] 7
(b) Any territory where the sale of alcoholic beverages is lawful; or 8
(c) Any moist precinct that has specifically authorized the sale of distilled spirits, 9
wine, and malt beverages at that establishment under KRS 242.123. 10
(2) A limited golf course license shall authorize the licensee to pur chase, receive, 11
possess, and sell distilled spirits, wine, and malt beverages at retail by the drink for 12
consumption on the licensed premises. The licensee shall purchase distilled spirits, 13
wine, and malt beverages only from licensed wholesalers or distrib utors. The 14
license shall not authorize the licensee to sell distilled spirits, wine, and malt 15
beverages by the package. 16
Section 14. KRS 243.040 is amended to read as follows: 17
The following kinds of malt beverage licenses may be issued by the malt beverages 18
administrator, the fees for which shall be: 19
(1) Brewer's license, per annum ........................................................................$2,580.00 20
(2) Microbrewery license, per annum ...................................................................$520.00 21
(3) Distributor's license, per annum ......................................................................$520.00 22
(4) Nonquota retail malt beverage package license, per annum ............ $570.00[$210.00] 23
(5) Out-of-state malt beverage supplier's license, 24
per annum ....................................................................................................$1,550.00 25
(6) Malt beverage storage license, per annum ......................................................$260.00 26
(7) Replacement or duplicate license, per annum ...................................................$25.00 27
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(8) Limited out-of-state malt beverage supplier's license, 1
per annum .......................................................................................................$260.00 2
(9) Nonquota type 4 malt beverage drink license, 3
per annum .......................................................................................................$210.00 4
(10) Direct shipper Type A license, per annum.......................................................$100.00 5
(11) The holder of a nonquota retail malt beverage package license may obtain a 6
Nonquota type 4 malt beverage drink license for a fee of fifty dollars ($50). The 7
holder of a Nonquota type 4 malt beverage drink license may obtain a nonquota 8
retail malt beverage package license for a fee of fifty dollars ($50). 9
(12) A nonrefundable fee of sixty dollars ($60) shall be charged to process each new 10
transitional license pursuant to KRS 243.045. 11
(13) Other special licenses as the state board finds to be necessary for th e administration 12
of KRS Chapters 241 to 244 and for the proper regulation and control of the 13
trafficking in malt beverages, as provided for by administrative regulations 14
promulgated by the state board. 15
A nonrefundable application fee of fifty dollars ($50) shall be charged to process each 16
new application for a license under this section. The application fee shall be applied to 17
the licensing fee if the license is issued, or otherwise the fee shall be retained by the 18
department. 19
Section 15. KRS 243.042 is amended to read as follows: 20
(1) A qualified historic site license may be issued to any establishment meeting the 21
criteria established in KRS 241.010 as long as the establishment is within: 22
(a) Any wet territory; or 23
(b) Any precinct that has authorized the sale of alcoholic beverages under KRS 24
242.1242. 25
(2) A qualified historic site license shall authorize the licensee to: 26
(a) Sell alcoholic beverages by the drink at one (1) or more permanent or 27
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nonpermanent locations on the premises over which the licensee, by lease or 1
ownership, has exclusive control without obtaining additional supplemental 2
bar licenses prescribed by KRS 243.037; 3
(b) Sell alcoholic beverages by the drink to patrons at public or private functions 4
held on the premises;[ and] 5
(c) Sell alcoholic beverages by the package under a limited nonquota package 6
license to patrons at public or private functions held on the premises in a 7
jurisdiction that has authorized the sale of distilled spirits and wine by the 8
package; and 9
(d) Purchase and store alcoholic beverages in the manner prescribed in KRS 10
243.088, 243.250, and 244.260. 11
SECTION 16. KRS 243.075 IS REPEALED AND REENACTED TO READ 12
AS FOLLOWS: 13
(1) As used in this section: 14
(a) "City or county" means a city, including a city recognized under KRS 15
67C.111; county; urban -county government; consolidated local 16
government; charter county government; or unified local government; 17
(b) "Gross receipts" has the same meaning as in Section 1 of this Act; and 18
(c) "Regulatory license fee" means a local fee imposed by a city or county 19
pursuant to this section. 20
(2) (a) The legislative body of a city or c ounty may by ordinance impose a 21
regulatory license fee upon the gross receipts of the sale of alcoholic 22
beverages and cannabis -infused beverages of each establishment where 23
alcoholic beverage sales or cannabis-infused beverage sales are lawful. 24
(b) The reg ulatory license fee may be levied at the beginning of each budget 25
period to support local emergency services within the city's or county's 26
jurisdiction or to reimburse the local government for the estimated costs of 27
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any additional policing, regulatory, or administrative expenses related to the 1
sale of alcoholic beverages or cannabis -infused beverages in the city or 2
county. 3
(c) The regulatory license fee shall be in addition to any other taxes, fees, or 4
licenses permitted by law, except: 5
1. A credit against a regulatory license fee shall be allowed in an amount 6
equal to any licenses or fees imposed by the city or county pursuant to 7
KRS 243.060 or 243.070; 8
2. In a county in which the city and county both levy a regulatory license 9
fee, the county license fee sh all only be applicable outside the 10
jurisdictional boundaries of those cities which levy a license fee; and 11
3. In any consolidated local government in which the local regulatory 12
license fee is levied on or after July 1, 2026, and in which there are 13
cities r ecognized under KRS 67C.111 within the jurisdictional 14
boundaries of the consolidated local government which assess a local 15
regulatory license fee as of January 1, 2026, the consolidated local 16
government fee shall only be applicable outside the boundaries o f 17
those cities recognized under KRS 67C.111 that levy a fee. 18
(3) (a) For any election held after one (1) year prior to the effective date of this Act, 19
any new fee authorized by subsection (2) of this section shall be enacted by 20
the city or county no later than one (1) year from the date of the local option 21
election held pursuant to KRS Chapter 242. 22
(b) For any election held one (1) year or more prior to the effective date of this 23
Act, the city or county may enact a regulatory license fee based on that 24
election no later than one (1) year after the effective date of this Act. 25
(4) Subject to the restrictions in subsection (7) of this section, the Alcoholic Beverage 26
Control Board shall promulgate administrative regulations in accordance with 27
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KRS Chapter 13A that set forth the process by which a city or county, in the first 1
year following the discontinuance of prohibition, may estimate any additional 2
emergency services funding within its jurisdiction and policing, regulation, and 3
administrative expenses by a city or county directly and solely related to the 4
discontinuance of prohibition. This subsection shall apply to any discontinuance 5
of prohibition occurring after the promulgation of administrative regulations 6
required by this subsection. 7
(5) (a) The revenue rec eived from the imposition of the regulatory license fee 8
authorized by subsection (2) of this section shall be: 9
1. Deposited into a segregated fund of the city or county; 10
2. Spent only in accordance with the requirements of subsection (2) of 11
this section; and 12
3. Audited in accordance with subsection (6) of this section. 13
(6) (a) By January 1, 2028, the Auditor of Public Accounts shall conduct audits of 14
each local government imposing the regulatory license fee authorized by 15
subsection (2) of this section for a full audit of the segregated fund 16
established in subsection (5) of this section for the most recently completed 17
ten (10) fiscal years. The local government shall retain all documentation 18
relating to the segregated fund for the audited years. 19
(b) If the lo cal government fails to substantially comply with the requirements 20
of this section, the local government shall: 21
1. Forfeit all revenue it collected through the regulatory license fee 22
during the audited years; 23
2. Reimburse the regulatory license fee audit f und established in 24
subsection (10) of this section for the cost of the audit with funds from 25
an account other than the segregated regulatory license fee fund; and 26
3. Be prohibited from imposing the regulatory license fee for ten (10) 27
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years. 1
(c) Any protest or appeal by a local government related to the findings of an 2
audit completed pursuant to paragraph (a) of this subsection shall be 3
conducted within the administrative procedures of the Auditor of Public 4
Accounts. 5
(d) The cost of all audits conducted purs uant to this subsection shall be paid 6
from the regulatory license fee audit fund established in subsection (10) of 7
this section. 8
(e) The Auditor of Public Accounts may contract with other auditing entities to 9
assist in the completion of audits required by this subsection. 10
(7) (a) Any city or county that was authorized to impose the regulatory license fee 11
by this section prior to the effective date of this Act shall: 12
1. Not impose the regulatory license fee at a rate greater than the rate it 13
imposed on January 1, 2026, at any time during the four (4) years 14
after the effective date of this Act; and 15
2. Impose the fee at a rate of no more than three p ercent (3%) within 16
four (4) years after the effective date of this Act. 17
(b) Any city or county that initially begins to impose the regulatory license fee 18
on or after the effective date of this Act shall impose the fee at a rate of no 19
more than one percent (1%). 20
(8) A direct shipper licensee shall be subject to and remit the regulatory license fee 21
imposed by this section as though it were an establishment located in a city or 22
county licensed to sell alcoholic beverages or cannabis -infused beverages. Any 23
regulatory license fee imposed pursuant to this section shall be considered a tax 24
as defined in KRS 243.029. 25
(9) Any city or county imposing a regulatory license fee pursuant to this section shall 26
file with the: 27
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(a) Department a report showing the applicable f ee amount and remittance 1
address for each affected license type in its jurisdiction. Any adoption of this 2
fee or modification of the applicable fee amount or remittance address for 3
each affected licensee shall be reported to the department within thirty (3 0) 4
days of adoption by the city or county imposing the fee. Within twenty (20) 5
days after receipt of the information, the department shall compile and 6
publish the information so that it is readily available to the public; and 7
(b) Department for Local Gover nment an annual report on or before 8
September 30 of each year that shows the actual expenses incurred and paid 9
and the receipts taken in relating to the regulatory license fee. If the city or 10
county fails to file this report within fifteen (15) days after its due date, the 11
city's or county's funds for the previous year taken in through the 12
regulatory license fee shall be forfeited to the Auditor of Public Accounts. 13
(10) (a) There is hereby established in the State Treasury a trust and agency 14
account to be known as the regulatory license fee audit fund. The fund shall 15
consist of moneys received pursuant to subsection (6) of this section, state 16
appropriations, gifts, grants, and federal funds. 17
(b) The fund shall be administered by the Auditor of Public Accounts. 18
(c) Amounts deposited in the fund shall be used to pay all expenses accruing 19
from audits conducted pursuant to subsection (6) of this section and for no 20
other purpose. 21
(d) Notwithstanding KRS 45.229, fund amounts not expended at the close of a 22
fiscal year shall not lapse but shall be carried forward into the next fiscal 23
year. 24
Section 17. KRS 243.110 is amended to read as follows: 25
(1) Except as provided in subsection (3) of this section, each kind of license listed in 26
KRS 243.030 shall be incompatible with every other kind listed in that section and 27
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no person or entity holding a license of any of those kinds shall apply for or hold a 1
license of another kind listed in KRS 243.030. 2
(2) (a) Each kind of license listed in KR S 243.040(1), (3), or (4) shall be 3
incompatible with every other kind listed in KRS 243.040(1), (3), or (4), and 4
no person holding a license of any of those kinds shall apply for or hold a 5
license of any other kind listed in KRS 243.040(1), (3), or (4). 6
(b) A brewery holding a license listed in KRS 243.040(5) or (8) shall not apply 7
for or hold a license listed in KRS 243.040(3) or (4). 8
(3) (a) The holder of a quota retail package license may also hold a quota retail drink 9
license, an NQ1 retail drink license, an NQ2 retail drink license, an NQ3 retail 10
drink license, a cannabis -infused beverage retail package license, or a special 11
nonbeverage alcohol license. 12
(b) The holder of a transporter's license may also hold a distilled spirits and wine 13
storage license. 14
(c) The holder of a distiller's license may also hold a rectifier's license, a special 15
nonbeverage alcohol license, a winery license, or a small farm winery license. 16
(d) A commercial airline system or charter flight system retail license, a 17
commercial airline system or charter flight system transporter's license, and a 18
retail drink license if held by a commercial airline or charter flight system 19
may be held by the same licensee. 20
(e) A Sunday retail drink license, vintage distilled spirits license, and 21
supplemental license may be held by the holder of a primary license. 22
(f) The holder of a distiller's, winery, small farm winery, brewer, microbrewery, 23
distilled spirits and wine supplier's, or malt beverage supplier's license may 24
also hold a direct shipper license. 25
(g) The holder of an NQ1 retail drink license, an NQ2 retail drink license, an 26
NQ3 retail drink license, a quota retail drink license, a qualified historic site 27
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license, or a limited restaurant license may also hold a limited nonquota 1
package license. 2
(4) (a) The holder of a cannabis -infused beverage retail package license shall not 3
apply for or hold the license listed in KRS 243.030(5) or 243.040(3). 4
(b) The holder of a cannabis -infused beverage retail package license shall also 5
hold a quota retail package license. 6
(c) The holder of a cannabis -infused beverage distributor's license may hold it as 7
a primary license or as a supplemental license to a distribu tor's license or a 8
wholesaler's license. 9
(5) Any person may hold two (2) or more licenses of the same kind. 10
(6) A person or entity shall not evade the prohibition against applying for or holding 11
licenses of two (2) kinds by applying for a second license th rough or under the 12
name of a different person or entity. The state administrator shall examine the 13
ownership, membership, and management of applicants, and shall deny the 14
application for a license if the applicant is substantially interested in a person or 15
entity that holds an incompatible license. 16
Section 18. KRS 243.120 is amended to read as follows: 17
(1) A distiller's, rectifier's, or winery license shall authorize the licensee to engage in 18
the business of distiller, re ctifier, or winery at the premises specifically designated 19
in the license, to maintain aging warehouses, to bottle products manufactured for 20
itself, and to transport for itself[himself or herself] only any alcoholic beverage 21
which the licensee[he or she] is authorized under the license to manufacture or sell. 22
The licensee shall transport alcoholic beverages only by a vehicle operated by 23
itself[himself or herself] , which has affixed to its sides at all times a sign of form 24
and size prescribed by the state board, containing among other things the name and 25
license number of the licensee. 26
(2) (a) 1. A licensee holding a distiller's license, Class A license, or Class B 27
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license shall distill no less than six hundred (600) gallons in one (1) year 1
at the distillery's licensed premises. Documentation of production shall 2
be: 3
a. Provided by each licensee to the department upon the renewal of 4
its distiller's license; and 5
b. Considered confidential tax information pursuant to KRS 6
131.190 and excepted from public inspect ion pursuant to KRS 7
61.878(1)(l), except as authorized by court order. 8
2. A licensee that engages in the distilling process for the exclusive 9
purpose of providing training and education, conducting research, or 10
teaching about the distilling process, aging, or bottling of distilled spirits 11
shall be exempt from subparagraph 1. of this paragraph, so long as the 12
licensee does not produce spirits for sale to the general public. 13
(b) Distillers that produce more than fifty thousand (50,000) gallons of distilled 14
spirits per calendar year at the premises shall obtain a distiller's license, Class 15
A. 16
(c) Distillers that produce fifty thousand (50,000) gallons or less of distilled 17
spirits per calendar year at the premises shall obtain a distiller's license, Class 18
B (craft distillery). 19
(3) (a) Rectifiers that rectify more than fifty thousand (50,000) gallons of distilled 20
spirits per calendar year at the premises shall obtain a rectifier's license, Class 21
A. 22
(b) Rectifiers that rectify fifty thousand (50,000) gallons or les s of distilled spirits 23
per calendar year at the premises shall obtain a rectifier's license, Class B 24
(craft rectifier). 25
(4) (a) A distiller that is located in wet territory, or in any precinct that has authorized 26
the limited sale of alcoholic beverages at distilleries under KRS 242.1243, 27
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may sell distilled spirits by the drink or by the package at retail to consumers 1
in accordance with KRS 243.0305. 2
(b) Any distilled spirits sold under this subsection shall be taxed and distributed 3
in the same manner as sales under KRS 243.0305(2). 4
(c) Except as provided in this subsection, sales under this subsection shall be 5
governed by all of the statutes and administrative regulations governing the 6
retail sale of distilled spirits by the drink. 7
(5) Nothing in this section shall be construed to: 8
(a) Vitiate the policy of this Commonwealth supporting an orderly three (3) tier 9
system for the production and sale of alcoholic beverages; or 10
(b) Allow delivery or shipment of alcohol into dry or moist territory. 11
Section 19. KRS 243.155 is amended to read as follows: 12
(1) A small farm winery may apply for a small farm winery license. In addition to all 13
other licensing requirements, an applicant for a small farm winery license shall 14
submit with its application a copy of the small farm winery's federal basic permit 15
and proof documenting its annual wine production. The board shall promulgate 16
administrative regulations establishing the form the documentation of proof of 17
production shall take. 18
(2) A small farm winery license shall authorize the licensee to perform the following 19
functions without having to obtain separate licenses, except that each small farm 20
winery off-premises retail site shall be separately licensed and the state regulatory 21
license fees imposed by Sections 1 and 2 of this Act shall be paid by the licensee: 22
(a) Engage in the business of a winery under the terms and conditions of KRS 23
243.120 and 243.130, except that a small farm winery may sell and deliver 24
wine produced by it to a retaile r as authorized by this section. The 25
manufacture of wine at the small farm winery shall not be less than two 26
hundred fifty (250) gallons, and shall not exceed five hundred thousand 27
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(500,000) gallons, in one (1) year; 1
(b) Bottle wines produced by that small farm winery and other licensed small 2
farm wineries; 3
(c) Enter into an agreement with another licensed small farm winery under which 4
it crushes, processes, ferments, bottles, or any combination of these services, 5
the grapes, fruits, or other agricultural products of the other small farm winery 6
for a production year. The resulting wine shall be considered the product of 7
the small farm winery that provides the fruit. The small farm winery 8
providing the custom crushing services may exclude the wine produced under 9
this paragraph from its annual production gallonage; 10
(d) If the licensed small farm winery or off-premises retail site premises is located 11
in wet territory or in a precinct that has authorized alcoholic beverage sales by 12
the small farm winery under KRS 242.124: 13
1. Serve complimentary samples of wine produced by it in amounts not to 14
exceed six (6) ounces per patron per day; and 15
2. Sell by the drink for on -premises consumption or off -premises 16
consumption pursuant to KRS 243.08 1, or by the package wine 17
produced by it or by another licensed small farm winery, at retail to 18
consumers; 19
(e) Sell by the drink or by the package, at fairs, festivals, and other similar types 20
of events, wine produced by it or by another licensed small far m winery, at 21
retail to consumers if all sales occur in a wet territory; 22
(f) Sell and transport wine produced by it to consumers, licensed small farm 23
winery off -premises retail sites, wholesale license holders, and small farm 24
winery license holders, except that wine purchased between small farm 25
wineries shall not exceed five hundred (500) gallons per year per small farm 26
winery; 27
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(g) Consume on the premises wine produced by the small farm winery or a 1
licensed small farm winery and purchased by the drink or by the package at 2
the licensed premises, if the small farm winery is located in wet territory; 3
(h) Sell wine at retail to consumers in accordance with KRS 243.027 to 243.029 4
if it holds a direct shipper license; and 5
(i) Sell and deliver, in accordance with KR S 243.120(1), up to twelve thousand 6
(12,000) gallons of wine produced by it annually to any retail license holder 7
as long as: 8
1. Any products sold and delivered under this paragraph that are not 9
otherwise registered by a licensed wholesaler shall be registered with the 10
department by the small farm winery; 11
2. The small farm winery is responsible for payment of wine state 12
wholesale regulatory license fees [wholesale sales taxes] and reporting 13
of self-distributed wines in accordance with Section 2 of this Act [KRS 14
243.884]; and 15
3. The small farm winery may extend credit on wine sold to retail licensees 16
for a period not to exceed thirty (30) days from the date of invoice, with 17
the date of invoice included in the total number of days. 18
This paragraph shall not appl y to small farm winery wholesalers licensed 19
under KRS 243.154. 20
(3) If the requirements of KRS 242.1241 or 244.290(5) relating to Sunday sales on the 21
licensed premises of a small farm winery are met, a small farm winery within that 22
territory may sell alcoho lic beverages on Sunday only in accordance with this 23
section during the hours and times as permitted in the local ordinance for that 24
locality. 25
(4) A small farm winery license holder may also hold an NQ2 retail drink license or an 26
NQ4 retail malt beverage drink license if: 27
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(a) The small farm winery is located in wet territory or in a precinct that has 1
authorized alcoholic beverage sales by the small farm winery under KRS 2
242.124; and 3
(b) The issuance of these licenses is in connection with the establishment and 4
operation of a restaurant, hotel, inn, bed and breakfast, conference center, or 5
any similar business enterprise designed to promote viticulture, enology, and 6
tourism. 7
(5) This section shall not exempt the holder of a small farm winery license from the 8
provisions of KRS Chapters 241 to 244, nor from the administrative regulations of 9
the board, nor from regulation by the board at all premises licensed by the small 10
farm winery, except as expressly stated in this section. 11
(6) Nothing contained in this secti on shall exempt a licensed out -of-state winery from 12
obeying the laws of its resident state. 13
(7) Upon the approval of the department, a small farm winery license may be renewed 14
after the licensee submits to the department the winery's federal basic permit a nd 15
proof of its annual wine production. Documentation of production shall be: 16
(a) Provided by each licensee to the department upon the renewal of its small 17
farm winery license; and 18
(b) Considered confidential tax information pursuant to KRS 131.190 and 19
excepted from public inspection pursuant to KRS 61.878(1)(l), except as 20
authorized by court order. 21
(8) An employee of a small farm winery may sample the products produced by that 22
small farm winery for purposes of education, quality control, and product 23
development. 24
(9) A small farm winery may permit leashed dogs on its premises, consistent with any 25
applicable health or safety codes. 26
Section 20. KRS 243.157 is amended to read as follows: 27
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(1) A microbrewery license shall authorize the licensee to perform the following 1
functions: 2
(a) Engage in the business of a brewer under the terms and conditions of KRS 3
243.150, provided that production of malt beverages at the microbrewery shall 4
not exceed fifty thousand (50,000) barrels in one (1) year; 5
(b) Serve[ on the premises] complimentary samples of malt beverages produced 6
by the microbrewery in amounts not to exceed sixteen (16) ounces per patron, 7
provided the microbrewery is located in wet territory o r a precinct that has 8
authorized the sale of alcoholic beverages at microbreweries under KRS 9
242.1239; 10
(c) Sell malt beverages produced on the premises of the microbrewery to licensed 11
distributors; 12
(d) Sell malt beverages produced on the premises of the microbrewery for on- and 13
off-premises purposes in accordance with subsection (3)(b) and (c) of this 14
section, pursuant to the following: 15
1. Without restriction on the amount of malt beverages sold by the drink 16
for on -premises consumption provided the microbre wery is located in 17
wet territory or a precinct that has authorized the sale of alcoholic 18
beverages at microbreweries under KRS 242.1239; and 19
2. With a restriction on the amount of malt beverages sold for off -premises 20
consumption, in an aggregate amount not to exceed thirty -one (31) 21
gallons per person per day that shall not include more than three (3) 22
cases in case format; 23
(e) Sell: 24
1. Unlimited amounts of malt beverages by the drink; and 25
2. Not more than one (1) case of packaged malt beverages; 26
produced on the premises of the microbrewery to consumers at fairs, festivals, 27
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and other similar types of events located in wet territory, in accordance with 1
subsection (3)(b)2. and (c)2. of this section; and 2
(f) Sell and deliver up to two thousand five hundred (2,5 00) barrels of malt 3
beverages annually to any retail license holder, provided that [: 4
1. ]any products sold and delivered under this paragraph that are not 5
otherwise registered by a licensed distributor shall be registered with the 6
department by the microbrewery[; and 7
2. The microbrewer notifies the distributor of any self -distribution delivery 8
by electronic or other means]. 9
(2) A microbrewery license shall not be deemed to be incompatible with any other 10
license except for a distributor's license under the provisions of KRS 243.180. 11
(3) In accordance with the provisions of this section, a microbrewery license holder 12
may: 13
(a) Hold retail drink and package licenses both on and off the premises of the 14
microbrewery. The holder of a microbrewery license is exempt from the 15
provisions of KRS 244.570 and 244.590 as applied to any retail licenses held 16
by the microbrewery license holder, and from any other sections which would 17
restrict the co -ownership of the microbrewery license and any retail licenses 18
described in this section; 19
(b) Sell malt beverages produced on the premises of the microbrewery for on -20
premises purposes without having to transfer physical possession of those 21
malt beverages to a licensed distributor provided: 22
1. The microbrewery possesses a retail drin k license for those premises; 23
and 24
2. The microbrewery reports and pays all taxes and state regulatory 25
license fees required by Sections 1 and 2 of this Act [subsection (5)(a) 26
and (b) of this section] to the Department of Revenue at the time and in 27
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the manner required by the Department of Revenue in accordance with 1
its powers under KRS 131.130(3); and 2
(c) Sell malt beverages produced on the premises of the microbrewery for off -3
premises purposes without having to transfer physical possession of those 4
malt beverages to a licensed distributor provided that: 5
1. The microbrewery possesses a retail package license for those premises; 6
and 7
2. The microbrewery reports and pays all taxes and state regulatory 8
license fees required by Sections 1 and 2 of this Act [subsection (5)(a) 9
and (b) of this section] to the Department of Revenue at the time and in 10
the manner required by the Department of Revenue in accordance with 11
its powers under KRS 131.130(3). 12
(4) The provisions of subsection (3)(b) and (c) of this section shall ap ply only to malt 13
beverages that are produced by the microbrewery at its licensed premises and: 14
(a) Offered for sale by the microbrewery at that same premises under the 15
microbrewery's retail drink or package license; or 16
(b) Offered for sale by the microbrewery at a fair, festival, or other similar type of 17
event as authorized under subsection (1)(e) of this section. 18
All other malt beverages produced by the microbrewery which are offered for retail 19
sale shall be sold and physically transferred to a licensed distributor in compliance 20
with all other relevant provisions of KRS Chapters 241 to 244, and a licensed 21
microbrewery shall not otherwise affect sales of malt beverages directly to retail 22
customers except as provided in subsection (3)(b) and (c) of this section under KRS 23
243.027 to 243.029 if the microbrewery holds a direct shipper license. 24
(5) (a) A microbrewery selling malt beverages in accordance with subsection (1) (d), 25
(e), or (f)[ or (3)(b) and (c)] of this section shall pay all [ wholesale sales] 26
taxes and state regulatory license fees due under Sections 1 and 2 of this 27
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Act[KRS 243.884]. For the purposes of this s ubsection, "selling"["wholesale 1
sales"] means a sale of malt beverages made by a microbrewery under 2
subsection (1)(d), (e), or (f)[ or (3)(b) and (c)] of this section, as applicable. 3
(b) A microbrewery [ shall pay the excise tax on malt beverages in accordance 4
with KRS 243.720(3) and 243.730 and] shall be entitled to the credit set forth 5
in Section 2 of this Act[KRS 243.720(3)(b)]. 6
(6) A microbrewery shall not be located in dry territory. 7
(7) An employee of a microbrewery may sample the products produced by that 8
microbrewery for purposes of education, quality control, and product development. 9
(8) This section does not exempt the holder of a microbrewery license from the 10
provisions of KRS Chapters 241 to 2 44, nor from any rules of the board as 11
established by administrative regulations, nor from regulation by the board, except 12
as expressly stated in this section. The provisions of this section shall not be 13
deemed inconsistent with the provisions of KRS 244.602. 14
(9) Nothing in this section shall be construed to vitiate the policy of this 15
Commonwealth, as set forth in KRS 244.167 and 244.602, supporting an orderly 16
three (3) tier system for the production and sale of malt beverages. 17
(10) Documentation of production shall be: 18
(a) Provided by each licensee to the department upon the renewal of its 19
microbrewery license; and 20
(b) Considered confidential tax information pursuant to KRS 131.190 and 21
excepted from public inspection pursuant to KRS 61.878(1)(l), except as 22
authorized by court order. 23
(11) A microbrewery may permit leashed dogs on its premises, consistent with any 24
applicable health or safety codes. 25
Section 21. KRS 243.160 is amended to read as follows: 26
(1) A licensed wholesa ler may purchase, receive, store, or possess distilled spirits and 27
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wine to sell at wholesale, from the licensed premises only, and to transport to and 1
from the licensed premises only alcoholic beverages that the wholesaler's license 2
authorizes the licensee to sell. The wholesaler may transport: 3
(a) Beverages in the manner provided for manufacturers in KRS 243.120; and 4
(b) Distilled spirits and wine from a manufacturer's warehouse or from another 5
licensed wholesaler's premises to the licensed wholesaler premises. 6
(2) The holder of a wholesaler's license may sell and transport its products to the holder 7
of a special nonbeverage alcohol license. 8
(3) The holder of a wholesaler's license shall: 9
(a) Have exclusive control over the licensed premises and its contents; and 10
(b) Ensure distilled spirits, wine, and business records stored on the premises 11
are adequately secured. 12
Section 22. KRS 243.238 is amended to read as follows: 13
(1) A limited nonquota package license may be issued a s a supplementary license to a 14
licensee that holds an NQ1 retail drink license, an NQ2 retail drink license, an NQ3 15
retail drink license, a quota retail drink license, a qualified historic site license, or a 16
limited restaurant license in a jurisdiction tha t has authorized the sale of distilled 17
spirits and wine by the package. 18
(2) The limited nonquota package license shall authorize the licensee to: 19
(a) Purchase private selection packages in the original manufacturer's unopened 20
containers; and 21
(b) Sell priva te selection packages at retail in the original manufacturer's 22
unopened containers, and only for consumption off the licensed premises. 23
(3) The licensee shall purchase private selection packages in accordance with KRS 24
243.0305(4). 25
Section 23. KRS 243.280 is amended to read as follows: 26
(1) A nonquota retail malt beverage package license shall authorize the licensee to: 27
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(a) Sell malt beverages at retail by the package from the licensed premises only 1
for consumption off the licensed premises only; and 2
(b) Purchase malt beverages only from a distributor. 3
(2) The holder of a quota retail package license under KRS 243.240 may als o obtain a 4
license under this section. 5
(3) The holder of a nonquota retail malt beverage package license may also hold a NQ4 6
retail malt beverage drink license. 7
(4) A nonquota retail malt beverage package license shall not be issued to sell malt 8
beverages at retail for any premises from which gasoline and lubricating oil are sold 9
or from which the servicing and repair of motor vehicles is conducted, unless there 10
is maintained in inventory on the premises for sale at retail not less than five 11
thousand dollars ($5,000) of food, groceries, and related products valued at cost. 12
(5) The term "food and groceries" means: 13
(a) Any food or food product intended for human consumption except alcoholic 14
beverages, tobacco, hot foods, and hot food products prepared for imme diate 15
consumption; and 16
(b) Seeds and plants to grow food for personal consumption. 17
(6) The provisions of this section shall not apply to any licensed premises which sells 18
no fuel other than marine fuel. 19
Section 24. KRS 243.340 is amended to read as follows: 20
(1) A special agent's or solicitor's license may be issued to a duly authorized 21
representative, employee, or agent of, or solicitor for a distiller, rectifier, winery, or 22
wholesaler licensed in Kentucky or by the state of his or her residence and by the 23
United States if a resident therein. The license shall authorize the licensee to offer 24
for sale and to solicit orders for the sale of any alcoholic beverage sold by a 25
distiller, rectifier, winery, or wholesaler who is li censed in Kentucky or who is a 26
nonresident. The licensee shall only offer for sale or solicit orders from those 27
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wholesale or retail licensees legally authorized to buy and receive the alcoholic 1
beverages of the distiller, rectifier, winery, or wholesaler l icensed in Kentucky. 2
The license shall set forth the name, address, and, unless the vendor is a 3
nonresident, the license numbers of the vendors the agent or solicitor represents, as 4
well as the name, address, and license number of the agent or solicitor. A n agent or 5
solicitor shall not represent any vendor or licensee whose name does not appear 6
upon the license or the application for the license. 7
(2) A special agent's or solicitor's license may be issued to a nonresident of this state. 8
The license shall aut horize the nonresident to represent a manufacturer, winery, or 9
wholesaler who is licensed by another state and by the federal government, if the 10
nonresident has been issued a license by another state conferring privileges similar 11
to a special agent's or solicitor's license authorized by subsection (1) of this section. 12
If the state of residence of the applicant does not issue a similar license, the 13
application filed with the department shall not be accepted without the approval of 14
the alcoholic beverage control agency of the state of the applicant's residence. 15
Section 25. KRS 243.360 is amended to read as follows: 16
(1) (a) For each application for any new or transitional license issued by the 17
department, the department shall provide public notice by listing the 18
application on a dedicated public website space controlled by the department 19
for fourteen (14) days, beginning on the day the application is submitted[All 20
persons shall, before applying for a license, advertise by publ ication their 21
intention to apply for a license in the newspaper for legal notices for the 22
county or city whose local administrator has jurisdiction over the proposed 23
premises]. 24
(b) For each application for any new or transitional license that also requires a 25
license issued by a local administrator, the local administrator may publish 26
a public notice by listing the application in the same manner that public 27
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meeting notices are published on a dedicated public website space 1
controlled by the local administrato r or the legislative body of the affiliated 2
city or county for fourteen (14) days, beginning on the day the application is 3
submitted to the department [An advertisement under this subsection may be 4
made online or in print]. 5
(c) The department shall[may] prescribe the form and content of the public 6
website space described in paragraph (a) of this subsection [advertisement] 7
by an administrative regulation[ that is] promulgated in accordance with KRS 8
Chapter 13A. 9
(2) The public notice and website requirements of subsection (1) of this section shall 10
not apply to an applicant for the same license for the same premises, or an applicant 11
for any of the following licenses: 12
(a) Out-of-state malt beverage supplier's license; 13
(b) Limited out-of-state malt beverage supplier's license; 14
(c) Out-of-state distilled spirits and wine supplier's license; 15
(d) Limited out-of-state distilled spirits and wine supplier's license; 16
(e) Supplemental bar license; 17
(f) Extended hours supplemental license; 18
(g) Special agent or solicitor's license; 19
(h) Special nonbeverage alcohol license; 20
(i) Transporter's license; 21
(j) Special Sunday drink license; 22
(k) Hotel in-room license; 23
(l) Sampling license; 24
(m) Direct shipper license; 25
(n) Special temporary drink license; or 26
(o) Vintage distilled spirits license. 27
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(3) The department's or local administrator's application listing under subsection (1) 1
of this section[notice] shall state[contain] the following[ information]: 2
(a) The[ notice shall state: the] name and address of the applicant and the name [ 3
and address] of each principal owner, partner, member, officer, and director if 4
the applicant is a partnership, limited partnership, limited liability company, 5
corporation, governmental agency, or other business entity recognized by law; 6
(b) The[ notice shall specifically state the] location of the premises for which the 7
license is sought, the type of business, and the type of license being requested; 8
and 9
(c) The[ notice shall state the] date the application was[will be] filed and shall 10
contain the following statement: 11
1. For a listing published by the department: "Any person may protest the 12
approval of the license by writing the Department of Alcoholic 13
Beverage Control within fourteen (14)[thirty (30)] days of the date the 14
application was submitted to the department[of legal publication]."; or 15
2. For a listing published by a local administrator: "Any person may 16
protest the approval of the license by writing to the local administrator 17
within fourteen (14) days of the date the application was submitted to 18
the department." 19
(4) Any protest received after the fourteen (14) [thirty (30)] day period has expired 20
shall not be considered a valid legal protest by the local administrator or the board. 21
(5) Substantial compliance with the information listed in subsection (3) of this section 22
shall be sufficient to comply with this section. 23
Section 26. KRS 243.630 is amended to read as follows: 24
(1) For purpose of this section, "transfer" means: 25
(a) The transfer to a new person or entity of ten percent (10%) or more ownership 26
interest in any licensed business or license; 27
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(b) The transfer in bulk, and not in the ordinary course of business, of a major 1
part of the fixtures, materials , supplies, merchandise, or other inventory of a 2
licensee's business; or 3
(c) The transfer of a business or license to a different premises. 4
(2) Any license issued to any person for any licensed premises shall not be transferable 5
or assignable to any other person or to any other premises or to any other part of the 6
building containing the licensed premises, unless a transfer or assignment is 7
authorized by the state administrator in the exercise of sound discretion. 8
(3) A licensee shall not acquire or otherwi se dispose of any interest in a licensed 9
premises or any license issued by the department, by sale of assets, stock, 10
inventory, control or right of control, or activities on the licensed premises without 11
prior approval of the state administrator. The state administrator shall treat a 12
transfer applicant as a new applicant for qualification and discretion purposes. 13
(4) Any acquisition of interest in a license without prior authorization shall be void. 14
(5) All applications for approval of a transfer shall be m ade in writing to the state 15
administrator having jurisdiction over the license. 16
(6) Applications for approval of a transfer shall be made under oath or affirmation, 17
shall be signed by both the transferor and the transferee, and shall contain any other 18
information prescribed by the department. 19
(7) The appropriate state administrator shall deny or approve the application when, in 20
the sound discretion of the administrator, all of the necessary information has been 21
obtained or the applicant has refused to provi de requested information, but it shall 22
not be acted upon before the end of the public protest period outlined in KRS 23
243.360. 24
(8) A[No] licensee or other person seeking to acquire an interest in an existing license 25
shall not transfer control or assume control of any licensed premises by agreement 26
or otherwise without the written consent of the state administrator of malt beverages 27
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or the state administrator of distilled spirits or both. 1
(9) A licensee shall not transfer its license or any interest in the license while any 2
proceedings against the license or the licensee for a violation of any statute or 3
administrative regulation which may r esult in the suspension or revocation of the 4
license are pending. 5
(10) (a) A licensee shall not transfer its license or any interest it has in the license if 6
the licensee owes a debt on the inventory to a wholesaler responsible for the 7
collection and payme nt of the state wholesale regulatory license fee [tax] 8
imposed under Section 2 of this Act. 9
(b) A transfer shall not take place until the department is notified that the 10
licensee's indebtedness has been paid or resolved to all wholesalers. 11
(c) If a licensee owes debt on the inventory to a wholesaler and the licensee 12
surrenders its license, or its license otherwise becomes inactive, a new 13
license shall not be issued on the same premises unless the new license 14
applicant signs an affidavit swearing that a transfer is not taking place[KRS 15
243.884]. 16
(11) A licensee shall not transfer its license or any interest in the license if the licensee 17
owes the Commonwealth of Kentucky for taxes as defined in KRS 243.500(4). A 18
transfer shall not take place until the departme nt is notified by the Kentucky 19
Department of Revenue that the licensee's indebtedness has been paid or resolved to 20
the satisfaction of the Department of Revenue. This section shall not prohibit a 21
transfer of a license or an interest in a license by a trust ee in bankruptcy if all other 22
requirements of this section are met. 23
Section 27. KRS 243.710 is amended to read as follows: 24
(1) Each wholesaler or self -distributing distiller shall pay to the Department of 25
Revenue five ce nts ($0.05) per case on each case of distilled spirits sold by the 26
wholesaler or self-distributing distiller in the state. This tax shall be computed each 27
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month according to the report required to be filed by KRS 243.850 and shall be paid 1
on or before the date in each succeeding month when reports are required to be 2
filed. 3
(2) This section shall expire on July 1, 2027. 4
Section 28. KRS 243.720 is amended to read as follows: 5
(1) (a) There is levied upon the use, sale, or distribution by sale or gift of distilled 6
spirits a tax of one dollar and ninety -two cents ($1.92) on each wine gallon of 7
distilled spirits, and a proportional rate per gallon on all distilled spirits used, 8
sold, or d istributed in any container of more or less than one (1) gallon, but 9
the rate of the excise tax on spirits in retail containers of one -half (1/2) pint 10
shall be twelve cents ($0.12); and 11
(b) Notwithstanding the provisions of paragraph (a) of this subsection , distilled 12
spirits placed in containers for sale at retail, where the distilled spirits 13
represent six percent (6%) or less of the total volume of the contents of the 14
containers, shall be taxed at the rate of twenty-five cents ($0.25) per gallon. 15
(2) There is levied upon the use, sale, or distribution by sale or gift of wine, a tax of 16
fifty cents ($0.50) on each gallon of wine, and a proportional rate per gallon on the 17
wine used, sold, or distributed in any container of more or less than one (1) gallon, 18
but the tax shall not be less than four cents ($0.04) on the sale or distribution of any 19
retail container of wine. 20
(3) (a) There is levied upon the sale or distribution by sale or gift of malt beverages 21
an excise tax of two dollars and fifty cents ($2.50) on each barrel of thirty-one 22
(31) gallons and a proportional rate per gallon on malt beverages sold or 23
distributed in any container of more or less than thirty-one (31) gallons; 24
(b) Each brewer producing malt beverages in this state shall be entitled to a cre dit 25
of fifty percent (50%) of the tax levied on each barrel of malt beverages sold 26
in this state, up to three hundred thousand (300,000) barrels per annum. 27
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(4) There is levied upon the use, sale, or distribution by sale or gift of cannabis -infused 1
beverages a tax of one dollar and ninety -two cents ($1.92) on each gallon of a 2
cannabis-infused beverage, and a proportional rate per gallon on all cannabis -3
infused beverages used, sold, or distributed in any container of more or less than 4
one (1) gallon. 5
(5) This section shall not apply to: 6
(a) Wine manufactured, sold, given away, or distributed and used solely for 7
sacramental purposes; or 8
(b) Distilled spirits and wine purchased by holders of special licenses provided 9
for in KRS 243.320 and purchased and used in the manner authorized by 10
those licenses. 11
(6) Subsections (1), (2), (3), and (5) of this section shall expire on July 1, 2027. 12
Section 29. KRS 243.730 is amended to read as follows: 13
(1) (a) Wholesalers of distilled spirit s and wine shall pay and report the tax and fees 14
levied by Sections 1 and 2 of this Act [KRS 243.720(1) and (2)] on or before 15
the twentieth day of the calendar month next succeeding the month in which 16
possession or title of the distilled spirits and wine is transferred from the 17
wholesaler to retailers or consumers in this state, in accordance with 18
administrative regulations promulgated under KRS Chapter 13A designed 19
reasonably to protect the revenues of the Commonwealth. 20
(b) 1. Distributors or retailers of malt beverages, who purchase malt beverages 21
directly from a brewer, shall pay and report the tax and fees levied by 22
Sections 1 and 2 of this Act[KRS 243.720(3)] on or before the twentieth 23
day of the calendar month next succeeding the month in which the 24
brewer sells, transfers, or passes title of the malt beverage to the 25
distributor or retailer, in accordance with administrative regulations 26
promulgated under KRS Chapter 13A designed reasonably to protect the 27
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revenues of the Commonwealth. 1
2.[ The credit allowe d brewers in this state, under the provisions of KRS 2
243.720(3)(b), shall flow through to the distributor or retailer who 3
purchases malt beverages directly from the brewer. 4
3.] If a brewer sells, transfers, or passes title to malt beverages to any of its 5
employees for home consumption or to any charitable or fraternal 6
organization pursuant to the provisions of KRS 243.150, the brewer 7
shall be responsible for paying and reporting the tax and fees levied by 8
Sections 1 and 2 of this Act [KRS 243.720(3)] in accordance with the 9
provisions of paragraph (d) of this subsection. 10
(c) Cannabis-infused beverage distributors shall pay and report the tax levied by 11
KRS 243.720(4) on or before the twentieth day of the calendar month next 12
succeeding the month in which possession or title of the cannabis -infused 13
beverages are transferred from the cannabis -infused beverage distributor to 14
retailers or consumers in this state, in accordance with administrative 15
regulations promulgate d under KRS Chapter 13A designed reasonably to 16
protect the revenues of the Commonwealth. 17
(d) 1. Every brewer selling, transferring, or passing title to malt beverages to 18
any person in this state other than a distributor or retailer; 19
2. Every manufacturer o f cannabis -infused beverages permitted by the 20
Department for Public Health selling, transferring, or passing title to 21
cannabis-infused beverages to any person in this state other than a 22
distributor or retailer; and 23
3. Every other person selling, transferri ng, or passing title of distilled 24
spirits, wine, malt beverages, or cannabis -infused beverages to 25
distributors, retailers, cannabis -infused beverage licensees, or 26
consumers; 27
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shall report and pay the tax and fees levied by Sections 1 and 2 of this Act 1
and KRS 243.720 on or before the twentieth day of the calendar month next 2
succeeding the month in which possession or title of distilled spirits, wine, 3
malt beverages, or cannabis -infused beverages is transferred to a distributor, 4
retailer, cannabis -infused be verage licensee, or consumer in this state, in 5
accordance with administrative regulations promulgated under KRS Chapter 6
13A designed reasonably to protect the revenues of the Commonwealth. 7
(e) Every distributor, retailer, or consumer possessing, using, sel ling, or 8
distributing distilled spirits, wine, malt beverages, or cannabis -infused 9
beverages in this state upon which the tax and fees levied by Sections 1 and 2 10
of this Act and KRS 243.720[ and 243.884] has not been paid shall be jointly 11
and severally lia ble for reporting and paying the tax due, in accordance with 12
administrative regulations promulgated under KRS Chapter 13A designed 13
reasonably to protect the revenues of the Commonwealth. The liability shall 14
not be extinguished until the tax has been paid to the Department of Revenue. 15
(f) Notwithstanding the provisions of paragraph (a) of this subsection, every 16
owner of a small farm winery shall pay and report the tax and fees levied by 17
Sections 1 and 2 of this Act[KRS 243.720 (1) and (2)] on a quarterly basis, in 18
accordance with administrative regulations of the Department of Revenue 19
designed reasonably to protect the revenues of the Commonwealth. 20
(2) Every wholesaler of distilled spirits or wine before using, selling, or distributing by 21
sale or gift distilled spirits and wine shall register with the Department of Revenue. 22
(3) Every brewer before selling or distributing by sale or gift malt beverages, or before 23
importing malt beverages into the state, shall register with the Department of 24
Revenue in a manner as the Department of Revenue may require. 25
(4) Every manufacturer of cannabis -infused beverages before selling or distributing by 26
sale or gift cannabis -infused beverages, or before importing cannabis -infused 27
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beverages into the state, shall: 1
(a) Obtain a per mit as a food manufacturer through the Department for Public 2
Health; and 3
(b) Register with the Department of Revenue in a manner as the Department of 4
Revenue may require. 5
(5) A cannabis -infused beverage distributor or retailer shall not be subject to 6
Sections 1 and 2 of this Act. 7
Section 30. KRS 243.884 is amended to read as follows: 8
(1) (a) Before July 1, 2027, for the privilege of making "wholesale sales" or "sales at 9
wholesale" of malt beverages, wine, distilled spirit s, or cannabis -infused 10
beverages, a tax is hereby imposed upon all wholesalers of wine and distilled 11
spirits, all distributors of malt beverages or cannabis -infused beverages, all 12
direct shipper licensees shipping alcoholic beverages or cannabis -infused 13
beverages to a consumer at a Kentucky address, all distillers making sales 14
pursuant to KRS 243.0305(3), (4)(a)1. and 2. and (c), (7), (9), (10), (12), and 15
(13), all microbreweries selling malt beverages under KRS 243.157, all small 16
farm wineries selling wine under KRS 243.155, and all manufacturers of 17
cannabis-infused beverages permitted by the Department for Public Health. 18
(b) On or after July 1, 2027, for the privilege of making "wholesale sales" or 19
"sales at wholesale" of cannabis -infused beverages to a co nsumer at a 20
Kentucky address, a tax is hereby imposed on all manufacturers of 21
cannabis-infused beverages permitted by the Department for Public 22
Health[Prior to July 1, 2015, the tax shall be imposed at the rate of eleven 23
percent (11%) of the gross receipts of any wholesaler or distributor derived 24
from "sales at wholesale" or "wholesale sales" made within the 25
Commonwealth, except as provided in subsection (3) of this section. For the 26
purposes of this section, the gross receipts of a microbrewery making 27
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"wholesale sales" shall be calculated by determining the dollar value amount 1
that the microbrewer would have collected had it conveyed to a distributor the 2
same volume sold to a consumer as allowed under KRS 243.157(3)(b) and 3
(c)]. 4
(c) The following rates shall apply to wholesale sales or sales at wholesale: 5
1. For distilled spirits and cannabis -infused beverages, eleven percent 6
(11%); and 7
2. For wine and malt beverages, ten percent (10%). 8
(d) The following rates shall apply for direct shipper sales: 9
1. For dist illed spirits and cannabis -infused beverages shipments, eleven 10
percent (11%) for wholesale sales or sales at wholesale; and 11
2. For wine and malt beverage shipments, ten percent (10%) for wholesale 12
sales or sales at wholesale. 13
(e) For direct shipper sales o r sales made pursuant to KRS 243.0305, if a 14
wholesale price is not readily available, the direct shipper licensee or distillery 15
shall calculate the wholesale price to be seventy percent (70%) of the retail 16
price of the alcoholic beverages. 17
(2) Wholesalers of distilled spirits and wine, distributors of malt beverages or cannabis-18
infused beverages, microbreweries, distillers, manufacturers of cannabis -infused 19
beverages permitted by the Department for Public Health, and direct shipper 20
licensees sha ll pay and report the tax levied by this section on or before the 21
twentieth day of the calendar month next succeeding the month in which possession 22
or title of the distilled spirits, wine, malt beverages, or cannabis -infused beverages 23
is transferred from t he wholesaler or distributor to retailers, or by microbreweries, 24
distillers, manufacturers of cannabis -infused beverages permitted by the 25
Department for Public Health, or direct shipper licensees to consumers in this state, 26
in accordance with administrative regulations promulgated under KRS Chapter 13A 27
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designed reasonably to protect the revenues of the Commonwealth. 1
(3) Gross receipts from sales at wholesale or wholesale sales shall not include the 2
following sales: 3
(a) Sales made between wholesalers, betwee n distributors, or between 4
manufacturers of cannabis-infused beverages permitted by the Department for 5
Public Health; 6
(b) Sales from the first fifty thousand (50,000) gallons of wine produced by a 7
small farm winery in a calendar year made by: 8
1. The small farm winery; or 9
2. A wholesaler of that wine produced by the small farm winery; and 10
(c) Sales made between a direct shipper licensee and a consumer located outside 11
of Kentucky. 12
(4) Any portion of this section relating to alcoholic beverages shall expire on July 1, 13
2027. 14
Section 31. KRS 243.886 is amended to read as follows: 15
(1) To reimburse himself or herself for the cost of collecting and reporting the tax, each 16
person required to pay and report the tax levied by KRS 243.884, other than a 17
microbrewery or a distiller, shall deduct on each report one percent (1%) of the tax 18
due, p rovided the amount due is not delinquent at the time of payment. A 19
microbrewery or distiller that reports and pays the wholesale sales tax levied by 20
KRS 243.884, in accordance with KRS 243.0305 or 243.157 as applicable, shall not 21
be entitled to deduct one percent (1%) of the tax due. 22
(2) This section shall expire on July 1, 2027. 23
Section 32. KRS 243.890 is amended to read as follows: 24
Except as provided in KRS 211.285, receipts derived from taxes and fees assessed and 25
collected under the provisions of this chapter and KRS Chapter 243A shall be 26
appropriated for general fund purposes. 27
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Section 33. KRS 244.080 is amended to read as follows: 1
(1) A retail licensee, or the licensee's agent, serv ant, or employee, shall not sell, give 2
away, or deliver any alcoholic beverages or cannabis -infused beverages, or procure 3
or permit any alcoholic beverages or cannabis -infused beverages to be sold, given 4
away, possessed by, or delivered to: 5
(a)[(1)] A minor, except that in any prosecution for selling alcoholic beverages 6
or cannabis -infused beverages to a minor it shall be an affirmative defense 7
that the sale was induced by the use of false, fraudulent, or altered 8
identification papers or other documents and that the appearance and character 9
of the purchaser were such that the purchaser's age could not have been 10
ascertained by any other means and that the purchaser's appearance and 11
character indicated strongly that the purchaser was of legal age to purchase 12
alcoholic beverages or cannabis -infused beverages. This evidence may be 13
introduced either in mitigation of the charge or as a defense to the charge 14
itself; or 15
(b)[(2)] A person who appears to a reasonable person to be actually or 16
apparently under the influe nce of alcoholic beverages, cannabis -infused 17
beverages, controlled substances, other intoxicating substances, or any of 18
these substances in combination, to the degree that the person may endanger 19
any person or property, or unreasonably annoy persons in the vicinity. 20
(2) If a retail licensee violates subsection (1)(a) of this section three (3) or more times 21
at the same licensed premises within a twenty -four (24) month period, that retail 22
licensee shall be permanently prohibited from holding any kind of alcoh olic 23
beverage license issued by the department at that licensed premises. 24
Section 34. KRS 244.585 is amended to read as follows: 25
(1) It shall be unlawful for any distributor to sell any brand or product name of malt 26
beverage in the Commonwealth of Kentucky, except in the territory described in a 27
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written agreement between the supplier or brewer and distributor, authorizing sale 1
by the distributor of that brand and product name within a designated area, and 2
within that designated area the distributor shall not refuse to sell or offer reasonable 3
service to licensed retailers during the normal business hours of the distributor. 4
Where a supplier or brewer sells several brands and named products, the agreement 5
need not apply to all brands and named products sold by the supplier or brewer and 6
may apply to only one (1) brand and product name. A[No] supplier or brewer shall 7
not provide by the written agreement for the distribution of a brand or named 8
product of malt beverages to mor e than one (1) distributor for all or any part of the 9
designated territory. Upon request, all territorial agreements shall be filed with the 10
department. 11
(2) Each distributor shall comply with current, written quality control standards as 12
determined by the owner of the trademark of the brand of malt beverage, provided 13
those controls are: 14
(a) Normal industry practice; 15
(b) Reasonably related to the maintenance of quality control; 16
(c) Consistent with the provisions of this chapter and all administrative 17
regulations promulgated under this chapter; and 18
(d) Communicated to the distributor through written notice of them from the 19
owner. 20
(3) A distributor may sell to only those licensed retailers, religious, charitable, or 21
fraternal organizations located within its de signated geographical territory as 22
provided in this section and to the distributor's employees and to other distributors 23
of the same brand. A[No] brand or product name of malt beverage may not be sold 24
in the Commonwealth of Kentucky without prior written approval of the brewer and 25
supplier filed with the department. 26
(4) A territorial designation in any agreement between a distributor and brewer or 27
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supplier pursuant to this section shall be modified only in accordance with all the 1
rights and duties of the distributor and brewer or supplier contained in any written 2
agreement between them or by any other action of the brewer, supplier, or 3
distributor that is consistent with the terms of their agreement, and this modification 4
shall be filed pursuant to the provisions of this section. The board shall require each 5
party to verif y that the level of service within the designated territory will not be 6
adversely affected by the modification. When a distributor is prevented from selling 7
or servicing retailers within its territory due to natural disasters, labor disputes, or 8
other caus es beyond the distributor's control, the distributor may allow another 9
distributor of the same brand or named product of malt beverages to sell and service 10
that brand within its territory upon approval of the brewer or supplier. 11
(5) The[No] provisions of a ny agreement shall not expressly or impliedly establish or 12
maintain the resale price of any brand or product name of malt beverage by the 13
distributor, nor may any brewer or microbrewery: 14
(a) Adjust the price at which the brewer or microbrewery sells malt beverages to 15
a distributor based on the price at which a distributor resells malt beverages 16
to a retailer; or 17
(b) Seek to recover any percentage of the distributor's increase in price to a 18
retailer that may exceed the brewer's or microbrewery's recommended price 19
to that retailer. 20
(6) It shall be unlawful for any brewer or microbrewery to require any distributor to 21
accept delivery of any malt beverages or any other item or commodity that was 22
not ordered by the distributor or included in sales projections to t he brewer or 23
microbrewery that were agreed upon by the distributor. 24
(7) Each brewer or microbrewery contracting with a distributor shall submit an 25
affidavit to the distributor verifying that it will not, by any means, induce a 26
distributor to, or cause a di stributor to, waive or forego any rights granted or 27
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protected by this chapter with respect to the distributor's franchise. 1
(8) This section shall not be construed as encouraging or authorizing any unlawful 2
activity, including but not limited to violations of federal antitrust laws. 3
Section 35. KRS 131.250 is amended to read as follows: 4
(1) For the purpose of facilitating the administration of the taxes it administers, the 5
department may require any tax return, report, or statement to be electronically 6
filed. 7
(2) (a) A person required to electronically file a return, report, or statement may 8
apply for a waiver from the requirement by submitting the request on a form 9
prescribed by the department. 10
(b) The request shall indicate the lack of one (1) or more of the following: 11
1. Compatible computer hardware; 12
2. Internet access; or 13
3. Other technological capabilities determined relevant by the department. 14
(3) Beginning July 1, 2026, a licensee: 15
(a) Holding a microbrewery license a nd authorized to sell malt beverages under 16
KRS 243.157; and 17
(b) Required to pay the state regulatory license fees due pursuant to Sections 1 18
and 2 of this Act[: 19
1. Wholesale sales tax under KRS 243.884; and 20
2. Excise tax on malt beverages under KRS 243.720(3)]; 21
shall electronically submit any payment and tax return, report, or statement to the 22
department. 23
Section 36. KRS 139.010 is amended to read as follows: 24
As used in this chapter, unless the context otherwise provides: 25
(1) (a) "Admissions" means the fees paid for: 26
1. The right of entrance to a display, program, sporting event, music 27
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concert, performance, play, show, movie, exhibit, fair, or other 1
entertainment or amusement event or venue; and 2
2. The privilege of using facilities or participating in an event or activity, 3
including but not limited to: 4
a. Bowling centers; 5
b. Skating rinks; 6
c. Health spas; 7
d. Swimming pools; 8
e. Tennis courts; 9
f. Weight training facilities; 10
g. Fitness and recreational sports centers; and 11
h. Golf courses, both public and private; 12
regardless of whether the fee paid is per use or in any other form, 13
including but not limited to an initiation fee, monthly fee, membersh ip 14
fee, or combination thereof. 15
(b) "Admissions" does not include: 16
1. Any fee paid to enter or participate in a fishing tournament; or 17
2. Any fee paid for the use of a boat ramp for the purpose of allowing 18
boats to be launched into or hauled out from the water; 19
(2) "Advertising and promotional direct mail" means direct mail the primary purpose of 20
which is to attract public attention to a product, person, business, or organization, or 21
to attempt to sell, popularize, or secure financial support for a product, person, 22
business, or organization. As used in this definition, "product" means tangible 23
personal property, an item transferred electronically, or a service; 24
(3) "Business" includes any activity engaged in by any person or caused to be engaged 25
in by that p erson with the object of gain, benefit, or advantage, either direct or 26
indirect; 27
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(4) "Commonwealth" means the Commonwealth of Kentucky; 1
(5) (a) "Cosmetic surgery services" means modifications to all areas of the head, 2
neck, and body to enhance appearance t hrough surgical and medical 3
techniques. 4
(b) "Cosmetic surgery services" does not include surgery services that are 5
medically necessary to reconstruct or correct dysfunctional areas of the face 6
and body due to birth disorders, trauma, burns, or disease; 7
(6) "Department" means the Department of Revenue; 8
(7) (a) "Digital audio -visual works" means a series of related images which, when 9
shown in succession, impart an impression of motion, with accompanying 10
sounds, if any. 11
(b) "Digital audio -visual works" include s movies, motion pictures, musical 12
videos, news and entertainment programs, and live events. 13
(c) "Digital audio -visual works" shall not include video greeting cards, video 14
games, and electronic games; 15
(8) (a) "Digital audio works" means works that result f rom the fixation of a series of 16
musical, spoken, or other sounds. 17
(b) "Digital audio works" includes ringtones, recorded or live songs, music, 18
readings of books or other written materials, speeches, or other sound 19
recordings. 20
(c) "Digital audio works" shall not include audio greeting cards sent by electronic 21
mail; 22
(9) (a) "Digital books" means works that are generally recognized in the ordinary and 23
usual sense as books, including any literary work expressed in words, 24
numbers, or other verbal or numerical sy mbols or indicia if the literary work 25
is generally recognized in the ordinary or usual sense as a book. 26
(b) "Digital books" shall not include digital audio -visual works, digital audio 27
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works, periodicals, magazines, newspapers, or other news or information 1
products, chat rooms, or weblogs; 2
(10) (a) "Digital code" means a code which provides a purchaser with a right to obtain 3
one (1) or more types of digital property. A "digital code" may be obtained by 4
any means, including electronic mail messaging or by tangible means, 5
regardless of the code's designation as a song code, video code, or book code. 6
(b) "Digital code" shall not include a code that represents: 7
1. A stored monetary value that is deducted from a total as it is used by the 8
purchaser; or 9
2. A redeemable card, gift card, or gift certificate that entitles the holder to 10
select specific types of digital property; 11
(11) (a) "Digital property" means any of the following which is transferred 12
electronically: 13
1. Digital audio works; 14
2. Digital books; 15
3. Finished artwork; 16
4. Digital photographs; 17
5. Periodicals; 18
6. Newspapers; 19
7. Magazines; 20
8. Video greeting cards; 21
9. Audio greeting cards; 22
10. Video games; 23
11. Electronic games; or 24
12. Any digital code related to this property. 25
(b) "Digital property" shall not include digital audio -visual works or satellite 26
radio programming; 27
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(12) (a) "Direct mail" means printed material delivered or d istributed by United States 1
mail or other delivery service to a mass audience or to addressees on a mailing 2
list provided by the purchaser or at the direction of the purchaser when the 3
cost of the items are not billed directly to the recipient. 4
(b) "Direct mail" includes tangible personal property supplied directly or 5
indirectly by the purchaser to the direct mail retailer for inclusion in the 6
package containing the printed material. 7
(c) "Direct mail" does not include multiple items of printed material deli vered to 8
a single address; 9
(13) "Directly used in the manufacturing or industrial processing process" means the 10
process that commences with the movement of raw materials from storage into a 11
continuous, unbroken, integrated process and ends when the finishe d product is 12
packaged and ready for sale; 13
(14) (a) "Executive employee recruitment services" means services provided by a 14
person to locate potential candidates to fill open senior -level management 15
positions. 16
(b) "Executive employee recruitment services" in cludes but is not limited to 17
making a detailed list of client requirements, researching and identifying 18
potential candidates, performing prescreening interviews, and providing 19
contract and salary negotiations; 20
(15) (a) "Extended warranty services" means services provided through a service 21
contract agreement between the contract provider and the purchaser where the 22
purchaser agrees to pay compensation for the contract and the provider agrees 23
to repair, replace, support, o r maintain tangible personal property, digital 24
property, real property, or prewritten computer software access services 25
according to the terms of the contract. 26
(b) "Extended warranty services" does not include the sale of a service contract 27
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agreement for t angible personal property to be used by a small telephone 1
utility as defined in KRS 278.516 or a Tier III CMRS provider as defined in 2
KRS 65.7621 to deliver communications services as defined in KRS 136.602 3
or broadband; 4
(16) (a) "Finished artwork" means f inal art that is used for actual reproduction by 5
photomechanical or other processes or for display purposes. 6
(b) "Finished artwork" includes: 7
1. Assemblies; 8
2. Charts; 9
3. Designs; 10
4. Drawings; 11
5. Graphs; 12
6. Illustrative materials; 13
7. Lettering; 14
8. Mechanicals; 15
9. Paintings; and 16
10. Paste-ups; 17
(17) (a) "Gross receipts" and "sales price" mean the total amount or consideration, 18
including cash, credit, property, and services, for which tangible personal 19
property, digital property, or services are sold, leased, or rented, valued in 20
money, whether received in money or otherwise, without any deduction for 21
any of the following: 22
1. The retailer's cost of the tangible personal property, digital property, or 23
services sold; 24
2. The cost of the materials used, labor or se rvice cost, interest, losses, all 25
costs of transportation to the retailer, all taxes imposed on the retailer, or 26
any other expense of the retailer; 27
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3. Charges by the retailer for any services necessary to complete the sale; 1
4. Delivery charges, which are d efined as charges by the retailer for the 2
preparation and delivery to a location designated by the purchaser 3
including transportation, shipping, postage, handling, crating, and 4
packing; 5
5. Any amount for which credit is given to the purchaser by the retail er, 6
other than credit for tangible personal property or digital property traded 7
when the tangible personal property or digital property traded is of like 8
kind and character to the property purchased and the property traded is 9
held by the retailer for resale; and 10
6. The amount charged for labor or services rendered in installing or 11
applying the tangible personal property, digital property, or service sold. 12
(b) "Gross receipts" and "sales price" shall include consideration received by the 13
retailer from a third party if: 14
1. The retailer actually receives consideration from a third party and the 15
consideration is directly related to a price reduction or discount on the 16
sale to the purchaser; 17
2. The retailer has an obligation to pass the price reduction or discoun t 18
through to the purchaser; 19
3. The amount of consideration attributable to the sale is fixed and 20
determinable by the retailer at the time of the sale of the item to the 21
purchaser; and 22
4. One (1) of the following criteria is met: 23
a. The purchaser presents a coupon, certificate, or other 24
documentation to the retailer to claim a price reduction or discount 25
where the coupon, certificate, or documentation is authorized, 26
distributed, or granted by a third party with the understanding that 27
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the third party will reimburse any seller to whom the coupon, 1
certificate, or documentation is presented; 2
b. The price reduction or discount is identified as a third -party price 3
reduction or discount on the invoice received by the purchaser or 4
on a coupon, certificate, or other documentation presented by the 5
purchaser; or 6
c. The purchaser identifies himself or herself to the retailer as a 7
member of a group or organization entitled to a price reduction or 8
discount. A "preferred customer" card that is availab le to any 9
patron does not constitute membership in such a group. 10
(c) "Gross receipts" and "sales price" shall not include: 11
1. Discounts, including cash, term, or coupons that are not reimbursed by a 12
third party and that are allowed by a retailer and taken by a purchaser on 13
a sale; 14
2. Interest, financing, and carrying charges from credit extended on the 15
sale of tangible personal property, digital property, or services, if the 16
amount is separately stated on the invoice, bill of sale, or similar 17
document given to the purchaser; 18
3. Any taxes legally imposed directly on the purchaser that are separately 19
stated on the invoice, bill of sale, or similar document given to the 20
purchaser;[ or] 21
4. Local alcohol regulatory license fees authorized under KRS 243.075 that 22
are separately stated on the invoice, bill of sale, or similar document 23
given to the purchaser; or 24
5. State retail regulatory license fees imposed by Section 1 of this Act 25
that are stated separately on the invoice, bill of sale, or similar 26
document given to the purchaser. 27
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(d) As used in this subsection, "third party" means a person other than the 1
purchaser; 2
(18) "In this state" or "in the state" means within the exterior limits of the 3
Commonwealth and includes all territory within these limits owned by or ce ded to 4
the United States of America; 5
(19) "Industrial processing" includes: 6
(a) Refining; 7
(b) Extraction of minerals, ores, coal, clay, stone, petroleum, or natural gas; 8
(c) Mining, quarrying, fabricating, and industrial assembling; 9
(d) The processing and packaging of raw materials, in -process materials, and 10
finished products; and 11
(e) The processing and packaging of farm and dairy products for sale; 12
(20) (a) "Lease or rental" means any transfer of possession or control of tangible 13
personal property for a fi xed or indeterminate term for consideration. A lease 14
or rental shall include future options to: 15
1. Purchase the property; or 16
2. Extend the terms of the agreement and agreements covering trailers 17
where the amount of consideration may be increased or decreas ed by 18
reference to the amount realized upon sale or disposition of the property 19
as defined in 26 U.S.C. sec. 7701(h)(1). 20
(b) "Lease or rental" shall not include: 21
1. A transfer of possession or control of property under a security 22
agreement or deferred paym ent plan that requires the transfer of title 23
upon completion of the required payments; 24
2. A transfer of possession or control of property under an agreement that 25
requires the transfer of title upon completion of the required payments 26
and payment of an opti on price that does not exceed the greater of one 27
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hundred dollars ($100) or one percent (1%) of the total required 1
payments; or 2
3. Providing tangible personal property and an operator for the tangible 3
personal property for a fixed or indeterminate period of time. To qualify 4
for this exclusion, the operator must be necessary for the equipment to 5
perform as designed, and the operator must do more than maintain, 6
inspect, or setup the tangible personal property. 7
(c) This definition shall apply regardless of the classification of a transaction 8
under generally accepted accounting principles, the Internal Revenue Code, or 9
other provisions of federal, state, or local law; 10
(21) (a) "Lobbying services" means the act of promoting or securing passage of 11
legislation or an attempt to influence or sway a public official or other public 12
servant toward a desired action, including but not limited to the support of or 13
opposition to a project or the passage, amendment, defeat, approval, or veto of 14
any legislation, regulation, rule, or ordinance.[;] 15
(b) "Lobbying services" includes but is not limited to the performance of 16
activities described as executive agency lobbying activities as defined in KRS 17
11A.201, activities described under the definition of lobby in KRS 6.611, and 18
any similar activities performed at the local, state, or federal levels; 19
(22) (a) "Machinery for new and expanded industry" means machinery: 20
1. Directly used in the manufacturing or industrial processing process of: 21
a. Tangible personal property at a plant facility; 22
b. Distilled spirits or wine at a plant facility or on the premises of a 23
distiller, rectifier, winery, or small farm winery licensed under 24
KRS 243.030 that include s a retail establishment on the premises; 25
or 26
c. Malt beverages at a plant facility or on the premises of a brewer or 27
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microbrewery licensed under KRS 243.040 that includes a retail 1
establishment; 2
2. Which is incorporated for the first time into: 3
a. A plant facility established in this state; or 4
b. Licensed premises located in this state; and 5
3. Which does not replace machinery in the plant facility or licensed 6
premises unless that machinery purchased to replace existing machinery: 7
a. Increases the consumptio n of recycled materials at the plant 8
facility by not less than ten percent (10%); 9
b. Performs different functions; 10
c. Is used to manufacture a different product; or 11
d. Has a greater productive capacity, as measured in units of 12
production, than the machinery being replaced. 13
(b) "Machinery for new and expanded industry" does not include repair, 14
replacement, or spare parts of any kind, regardless of whether the purchase of 15
repair, replacement, or spare parts is required by the manufacturer or seller as 16
a condition of sale or as a condition of warranty; 17
(23) "Manufacturing" means any process through which material having little or no 18
commercial value for its intended use before processing has appreciable 19
commercial value for its intended use after processing by the machinery; 20
(24) "Marketplace" means any physical or electronic means through which one (1) or 21
more retailers may advertise and sell tangible personal property, digital property, or 22
services, or lease tangible personal property or digital property, such as a catalog, 23
Internet website, or television or radio broadcast, regardless of whether the tangible 24
personal property, digital property, or retailer is physically present in this state; 25
(25) (a) "Marketplace provider" means a person, including any affili ate of the person, 26
that facilitates a retail sale by satisfying subparagraphs 1. and 2. of this 27
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paragraph as follows: 1
1. The person directly or indirectly: 2
a. Lists, makes available, or advertises tangible personal property, 3
digital property, or services f or sale by a marketplace retailer in a 4
marketplace owned, operated, or controlled by the person; 5
b. Facilitates the sale of a marketplace retailer's product through a 6
marketplace by transmitting or otherwise communicating an offer 7
or acceptance of a retail sale of tangible personal property, digital 8
property, or services between a marketplace retailer and a 9
purchaser in a forum including a shop, store, booth, catalog, 10
Internet site, or similar forum; 11
c. Owns, rents, licenses, makes available, or operates an y electronic 12
or physical infrastructure or any property, process, method, 13
copyright, trademark, or patent that connects marketplace retailers 14
to purchasers for the purpose of making retail sales of tangible 15
personal property, digital property, or services; 16
d. Provides a marketplace for making retail sales of tangible personal 17
property, digital property, or services, or otherwise facilitates retail 18
sales of tangible personal property, digital property, or services, 19
regardless of ownership or control of the t angible personal 20
property, digital property, or services, that are the subject of the 21
retail sale; 22
e. Provides software development or research and development 23
activities related to any activity described in this subparagraph, if 24
the software development o r research and development activities 25
are directly related to the physical or electronic marketplace 26
provided by a marketplace provider; 27
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f. Provides or offers fulfillment or storage services for a marketplace 1
retailer; 2
g. Sets prices for a marketplace retailer's sale of tangible personal 3
property, digital property, or services; 4
h. Provides or offers customer service to a marketplace retailer o r a 5
marketplace retailer's customers, or accepts or assists with taking 6
orders, returns, or exchanges of tangible personal property, digital 7
property, or services sold by a marketplace retailer; or 8
i. Brands or otherwise identifies sales as those of the ma rketplace 9
provider; and 10
2. The person directly or indirectly: 11
a. Collects the sales price or purchase price of a retail sale of tangible 12
personal property, digital property, or services; 13
b. Provides payment processing services for a retail sale of tangible 14
personal property, digital property, or services; 15
c. Through terms and conditions, agreements, or arrangements with a 16
third party, collects payment in connection with a retail sale of 17
tangible personal property, digital property, or services from a 18
purchaser and transmits that payment to the marketplace retailer, 19
regardless of whether the person collecting and transmitting the 20
payment receives compensation or other consideration in exchange 21
for the service; or 22
d. Provides a virtual currency that purchasers are allowed or required 23
to use to purchase tangible personal property, digital property, or 24
services. 25
(b) "Marketplace provider" includes but is not limited to a person that satisfies the 26
requirements of this subsection through the ownership, operation, o r control 27
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of a digital distribution service, digital distribution platform, online portal, or 1
application store; 2
(26) "Marketplace retailer" means a seller that makes retail sales through any 3
marketplace owned, operated, or controlled by a marketplace provider; 4
(27) (a) "Occasional sale" includes: 5
1. A sale of tangible personal property or digital property not held or used 6
by a seller in the course of an activity for which he or she is required to 7
hold a seller's permit, provided such sale is not one (1) of a series of 8
sales sufficient in number, scope, and character to constitute an activity 9
requiring the holding of a seller's permit. In the case of the sale of the 10
entire, or a substantial portion of the nonretail assets of the seller, the 11
number of previou s sales of similar assets shall be disregarded in 12
determining whether or not the current sale or sales shall qualify as an 13
occasional sale; or 14
2. Any transfer of all or substantially all the tangible personal property or 15
digital property held or used by a person in the course of such an activity 16
when after such transfer the real or ultimate ownership of such property 17
is substantially similar to that which existed before such transfer. 18
(b) For the purposes of this subsection, stockholders, bondholders, partn ers, or 19
other persons holding an interest in a corporation or other entity are regarded 20
as having the "real or ultimate ownership" of the tangible personal property or 21
digital property of such corporation or other entity; 22
(28) (a) "Other direct mail" means any direct mail that is not advertising and 23
promotional direct mail, regardless of whether advertising and promotional 24
direct mail is included in the same mailing. 25
(b) "Other direct mail" includes but is not limited to: 26
1. Transactional direct mail that c ontains personal information specific to 27
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the addressee, including but not limited to invoices, bills, statements of 1
account, and payroll advices; 2
2. Any legally required mailings, including but not limited to privacy 3
notices, tax reports, and stockholder reports; and 4
3. Other nonpromotional direct mail delivered to existing or former 5
shareholders, customers, employees, or agents, including but not limited 6
to newsletters and informational pieces. 7
(c) "Other direct mail" does not include the development of billing information or 8
the provision of any data processing service that is more than incidental to the 9
production of printed material; 10
(29) "Person" includes any individual, firm, copartnership, joint venture, association, 11
social club, fraternal organization, corporation, estate, trust, business trust, receiver, 12
trustee, syndicate, cooperative, assignee, governmental unit or agency, or any other 13
group or combination acting as a unit; 14
(30) "Permanent," as the term applies to digital property, means perpetual or for an 15
indefinite or unspecified length of time; 16
(31) (a) "Photography and photofinishing services" means: 17
1. The taking, developing, or printing of an original photograph; or 18
2. Image editing, including shadow removal, tone adjustments, vertical and 19
horizontal alignment and cropping, composite image creation, 20
formatting, watermarking printing, and delivery of an original 21
photograph in the form of tangible personal property, digital property, or 22
other media. 23
(b) "Photography and photofinishing services" does not include photography 24
services necessary for medical or dental health; 25
(32) "Plant facility" means a single location that is exclusively dedicated to 26
manufacturing or industri al processing activities. A location shall be deemed to be 27
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exclusively dedicated to manufacturing or industrial processing activities even if 1
retail sales are made there, provided that the retail sales are incidental to the 2
manufacturing or industrial processing activities occurring at the location. The term 3
"plant facility" shall not include any restaurant, grocery store, shopping center, or 4
other retail establishment; 5
(33) (a) "Prewritten computer software" means: 6
1. Computer software, including prewritten upgrades, that are not designed 7
and developed by the author or other creator to the specifications of a 8
specific purchaser; 9
2. Software designed and developed by the author or other creator to the 10
specifications of a specific purchaser when it is sold to a person other 11
than the original purchaser; or 12
3. Any portion of prewritten computer software that is modified or 13
enhanced in any manner, where the modification or enhancement is 14
designed and developed to the specifications of a specific purchaser, 15
unless there is a reasonable, separately stated charge on an invoice or 16
other statement of the price to the purchaser for the modification or 17
enhancement. 18
(b) When a person modifies or enhances computer software of which the person 19
is not the author or creator, the person shall be deemed to be the author or 20
creator only of the modifications or enhancements the person actually made. 21
(c) The combining of two (2) or more prewritten computer software programs or 22
portions thereof does not cause the combination to be o ther than prewritten 23
computer software; 24
(34) "Prewritten computer software access services" means the right of access to 25
prewritten computer software where the object of the transaction is to use the 26
prewritten computer software while possession of the pre written computer software 27
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is maintained by the seller or a third party, wherever located, regardless of whether 1
the charge for the access or use is on a per use, per user, per license, subscription, or 2
some other basis; 3
(35) (a) "Purchase" means any transf er of title or possession, exchange, barter, lease, 4
or rental, conditional or otherwise, in any manner or by any means 5
whatsoever, of: 6
1. Tangible personal property; 7
2. An extended warranty service; 8
3. Digital property transferred electronically; or 9
4. Services included in KRS 139.200; 10
for a consideration. 11
(b) "Purchase" includes: 12
1. When performed outside this state or when the customer gives a resale 13
certificate, the producing, fabricating, processing, printing, or imprinting 14
of tangible personal propert y for a consideration for consumers who 15
furnish either directly or indirectly the materials used in the producing, 16
fabricating, processing, printing, or imprinting; 17
2. A transaction whereby the possession of tangible personal property or 18
digital property i s transferred but the seller retains the title as security 19
for the payment of the price; and 20
3. A transfer for a consideration of the title or possession of tangible 21
personal property or digital property which has been produced, 22
fabricated, or printed to t he special order of the customer, or of any 23
publication; 24
(36) "Recycled materials" means materials which have been recovered or diverted from 25
the solid waste stream and reused or returned to use in the form of raw materials or 26
products; 27
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(37) "Recycling pur poses" means those activities undertaken in which materials that 1
would otherwise become solid waste are collected, separated, or processed in order 2
to be reused or returned to use in the form of raw materials or products; 3
(38) "Remote retailer" means a retailer with no physical presence in this state; 4
(39) (a) "Repair, replacement, or spare parts" means any tangible personal property 5
used to maintain, restore, mend, or repair machinery or equipment. 6
(b) "Repair, replacement, or spare parts" does not include machine oils, grease, or 7
industrial tools; 8
(40) (a) "Retailer" means: 9
1. Every person engaged in the business of making retail sales of tangible 10
personal property, digital property, or furnishing any services in a retail 11
sale included in KRS 139.200; 12
2. Every person engaged in the business of making sales at auction of 13
tangible per sonal property or digital property owned by the person or 14
others for storage, use or other consumption, except as provided in 15
paragraph (c) of this subsection; 16
3. Every person making more than two (2) retail sales of tangible personal 17
property, digital pro perty, or services included in KRS 139.200 during 18
any twelve (12) month period, including sales made in the capacity of 19
assignee for the benefit of creditors, or receiver or trustee in bankruptcy; 20
4. Any person conducting a race meeting under the provision of KRS 21
Chapter 230, with respect to horses which are claimed during the 22
meeting. 23
(b) When the department determines that it is necessary for the efficient 24
administration of this chapter to regard any salesmen, representatives, 25
peddlers, or canvassers as the agents of the dealers, distributors, supervisors or 26
employers under whom they operate or from whom they obtain the tangible 27
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personal property, digital property, or services sold by them, irrespective of 1
whether they are making sales on their own behalf or on behalf of the dealers, 2
distributors, supervisors or employers, the department may so regard them and 3
may regard the dealers, distributors, supervisors or employers as retailers for 4
purposes of this chapter. 5
(c) 1. Any person making sales at a charita ble auction for a qualifying entity 6
shall not be a retailer for purposes of the sales made at the charitable 7
auction if: 8
a. The qualifying entity, not the person making sales at the auction, is 9
sponsoring the auction; 10
b. The purchaser of tangible personal property at the auction directly 11
pays the qualifying entity sponsoring the auction for the property 12
and not the person making the sales at the auction; and 13
c. The qualifying entity, not the person making sales at the auction, is 14
responsible for the collect ion, control, and disbursement of the 15
auction proceeds. 16
2. If the conditions set forth in subparagraph 1. of this paragraph are met, 17
the qualifying entity sponsoring the auction shall be the retailer for 18
purposes of the sales made at the charitable auction. 19
3. For purposes of this paragraph, "qualifying entity" means a resident: 20
a. Church; 21
b. School; 22
c. Civic club; or 23
d. Any other nonprofit charitable, religious, or educational 24
organization; 25
(41) "Retail sale" means any sale, lease, or rental for any purpos e other than resale, 26
sublease, or subrent; 27
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(42) (a) "Ringtones" means digitized sound files that are downloaded onto a device 1
and that may be used to alert the customer with respect to a communication. 2
(b) "Ringtones" shall not include ringback tones or ot her digital files that are not 3
stored on the purchaser's communications device; 4
(43) (a) "Sale" means: 5
1. The furnishing of any services included in KRS 139.200; or 6
2. Any transfer of title or possession, exchange, barter, lease, or rental, 7
conditional or otherwise, in any manner or by any means whatsoever, 8
of: 9
a. Tangible personal property; or 10
b. Digital property transferred electronically; 11
for a consideration. 12
(b) "Sale" includes but is not limited to: 13
1. The producing, fabricating, processing, printing, or imprinting of 14
tangible personal property or digital property for a consideration for 15
purchasers who furnish, either directly or indirectly, the materials used 16
in the producing, fabricating, processing, printing, or imprinting; 17
2. A transaction whereby the possession of tangible personal property or 18
digital property is transferred, but the seller retains the title as security 19
for the payment of the price; and 20
3. A transfer for a consideration of the title or possession of tangible 21
personal property or digital property which has been produced, 22
fabricated, or printed to the special order of the purchaser. 23
(c) This definition shall apply regardless of the classification of a transaction 24
under generally accepted accounting principles, the Internal Revenue Code, or 25
other provisions of federal, state, or local law; 26
(44) "Seller" includes every person engaged in the business of selling tangible personal 27
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property, digital property, or services of a kind, the gross r eceipts from the retail 1
sale of which are required to be included in the measure of the sales tax, and every 2
person engaged in making sales for resale; 3
(45) (a) "Storage" includes any keeping or retention in this state for any purpose 4
except sale in the re gular course of business or subsequent use solely outside 5
this state of tangible personal property, digital property, or prewritten 6
computer software access services purchased from a retailer. 7
(b) "Storage" does not include the keeping, retaining, or exerc ising any right or 8
power over tangible personal property for the purpose of subsequently 9
transporting it outside the state for use thereafter solely outside the state, or 10
for the purpose of being processed, fabricated, or manufactured into, attached 11
to, or incorporated into, other tangible personal property to be transported 12
outside the state and thereafter used solely outside the state; 13
(46) "Tangible personal property" means personal property which may be seen, 14
weighed, measured, felt, or touched, or whic h is in any other manner perceptible to 15
the senses and includes natural, artificial, and mixed gas, electricity, water, steam, 16
and prewritten computer software; 17
(47) "Taxpayer" means any person liable for tax under this chapter; 18
(48) "Telemarketing service s" means services provided via telephone, facsimile, 19
electronic mail, text messages, or other modes of communications to another 20
person, which are unsolicited by that person, for the purposes of: 21
(a) 1. Promoting products or services; 22
2. Taking orders; or 23
3. Providing information or assistance regarding the products or services; 24
or 25
(b) Soliciting contributions; 26
(49) "Transferred electronically" means accessed or obtained by the purchaser by means 27
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other than tangible storage media; and 1
(50) (a) "Use" includes the exercise of: 2
1. Any right or power over tangible personal property or digital property 3
incident to the ownership of that property, or by any transaction in 4
which possession is given, or by any transaction involving digital 5
property or tangible person al property where the right of access is 6
granted; or 7
2. Any right or power to benefit from any services subject to tax under 8
KRS 139.200(2)(p) to (ax). 9
(b) "Use" does not include the keeping, retaining, or exercising any right or 10
power over: 11
1. Tangible personal property or digital property for the purpose of: 12
a. Selling tangible personal property or digital property in the regular 13
course of business; or 14
b. Subsequently transporting tangible personal property outside the 15
state for use thereafter solely outs ide the state, or for the purpose 16
of being processed, fabricated, or manufactured into, attached to, 17
or incorporated into, other tangible personal property to be 18
transported outside the state and thereafter used solely outside the 19
state; or 20
2. Prewritten computer software access services purchased for use outside 21
the state and transferred electronically outside the state for use thereafter 22
solely outside the state. 23
Section 37. KRS 243.045 is amended to read as follows: 24
(1) A transitional license may be issued by the state administrator or administrators 25
during the time a transfer of an ongoing business is being processed under the 26
following conditions: 27
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(a) The purchaser shall file an application for a permanent license w ith the 1
appropriate local alcoholic beverage authority and with the department; 2
(b) The purchaser shall submit its license application to the department for 3
placement on the department's online listing [advertise its intention to apply 4
for a license] pursuant to KRS 243.360; and 5
(c) The purchaser shall pay all application fees for the permanent license. 6
(2) If the above requirements are met, the state administrator or administrators, as 7
appropriate, may issue a transitional license with a term of up to sixty (60) days, 8
plus one (1) thirty (30) day renewal license, to the purchaser for a processing fee set 9
forth in KRS 243.030 to 243.040. All transitional licenses immediately expire upon 10
the issuance to the purchaser of one (1) or more permanent licenses. 11
(3) Upon completion of the sale of the business, the purchaser shall not operate the 12
business on the seller's license. 13
(4) The transitional license shall not be transferable or used for an application to move 14
a business from one (1) location to another location. 15
(5) The transitional license shall entitle the holder to the same privileges and 16
restrictions of the permanent license or licenses for which the holder applied under 17
subsection (1)(a) of this section. 18
Section 38. KRS 243.430 is amended to read as follows: 19
(1) The state administrator may deny any application for a license if the application is 20
incomplete or the correct fee has not been remitted with the application. 21
(2) A license shall not be approved or issued until th e fourteen (14)[thirty (30)] day 22
period in which a protest is permissible has expired. Any license for which 23
department listing[public notice] under KRS 243.360 is required may conditionally 24
be issued in less than fourteen (14)[thirty (30)] days from the date the application is 25
received if the premises has previously operated under the same type of license 26
within the last twelve (12) months. 27
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(3) The state administrator shall deny, approve, or issue licenses when, in the sound 1
discretion of the administrator , all of the information necessary has been obtained 2
or the applicant has refused to provide requested information. 3
Section 39. KRS 243.790 is amended to read as follows: 4
The sale or distribution of alcoholic beverages o r cannabis -infused beverages 5
manufactured in or imported into this state for shipment permanently out of the state to 6
be sold without the state and consumed without the state shall not be subject to the state 7
regulatory license fees imposed by Sections 1, 2, and 3 of this Act or the tax imposed by 8
KRS 243.720. Provided, however, the Department of Revenue may, when necessary for 9
the purpose of control enforcement or protection of revenue, prescribe the conditions 10
under which containers of the alcoholic bever ages or cannabis -infused beverages for 11
shipment permanently out of the state to be sold without the state and consumed without 12
the state may be kept and trafficked in without payment of the tax. 13
Section 40. KRS 243.850 is amended to read as follows: 14
(1) For the purpose of assisting in the enforcement of Sections 1, 2, and 3 of this Act 15
and KRS 243.720, 243.730, 243.790, and 243.884, every licensee [, except 16
retailers], whether subject to the payment of state regulatory lic ense fees imposed 17
by Sections 1, 2, and 3 of this Act or the taxes imposed by KRS 243.720, 243.730, 18
243.790, and 243.884, shall, on or before the twentieth day of each month, render to 19
the Department of Revenue a statement, in writing, of all trafficking i n alcoholic 20
beverages or cannabis-infused beverages during the preceding month. 21
(2) The statement shall: 22
(a) Be taken directly from the records of the reporting licensee or manufacturer of 23
cannabis-infused beverages permitted by the Department for Public H ealth, 24
and shall set forth on forms furnished by the Department of Revenue the 25
required information; and 26
(b) Include alcoholic beverages or cannabis -infused beverages destined for sale 27
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outside the state, as well as alcoholic beverages or cannabis-infused beverages 1
subject to the state regulatory license fees imposed by Sections 1, 2, and 3 of 2
this Act or the tax imposed by KRS 243.720, 243.730, 243.790, and 243.884. 3
(3) The Department of Revenue shall have authority to require from retail licensees, 4
other licensees, and manufacturers of cannabis -infused beverages other reports and 5
statements at the necessary times for the enforcement of Sections 1, 2, and 3 of this 6
Act and KRS 243.720, 243.730, 243.790, and 243.884. 7
Section 41. KRS 243.990 is amended to read as follows: 8
(1) Any person who, by himself or herself or acting through another, directly or 9
indirectly, violates any of the provisions of KRS 243.020 to 243.670, for which no 10
other penalty is provided, sha ll, for the first offense, be guilty of a Class B 11
misdemeanor; and for the second and each subsequent violation, he or she shall be 12
guilty of a Class A misdemeanor. The penalties provided for in this subsection shall 13
be in addition to the revocation of the offender's license. 14
(2) Any person who, by himself or herself or through another, directly or indirectly, 15
violates subsection (1) of KRS 243.020 shall, for the first offense, be guilty of a 16
Class B misdemeanor; for the second offense, he or she shall be g uilty of a Class A 17
misdemeanor; and for the third and each subsequent offense, he or she shall be 18
guilty of a Class D felony. 19
(3) Any person who violates subsection (3) of KRS 243.020 shall be guilty of a 20
violation. 21
(4) Any person who violates KRS 243.620 with respect to a license issued under KRS 22
243.050 or 243.082 shall be guilty of a violation. 23
(5) Any person who violates any of the provisions of Section 2 of this Act [KRS 24
243.720 or 243.730] or any administrative regulation issued thereunder shall be 25
guilty of a Class A misdemeanor. 26
(6) Any person who violates any provision of Section 2 of this Act [KRS 243.710 to 27
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243.850] shall be subject to the uniform civil penalties imposed pursuant to KRS 1
131.180. 2
(7) In every case, any state wholesale regulatory license fee[tax] imposed by Section 2 3
of this Act [KRS 243.710 to 243.720] which is not paid on or before the due date 4
shall bear interest at the tax interest rate as defined in KRS 131.010(6) from the due 5
date until the date of payment. 6
(8) Any person who, by himself or herself or acting through another, directly or 7
indirectly, violates KRS 243.502(1) shall, for the first offense, be guilty of a Class 8
B misdemeanor, and for the second and each subsequent violation, he or she shall 9
be guilty of a Class A misdemeanor. The penalties provided for in this subsection 10
shall be in addition to the suspension or revocation of the offender's license. 11
(9) Any person who violates the provisions of KRS 243.897 shall be subject to a fine 12
not to exceed one thousand dollars ($1,000). 13
(10) Any vintage distilled spirits seller who, by himself or herself or acting through 14
another, directly or indirectly, violates any of the provisions of KRS 243.232(6) 15
shall: 16
(a) For the first offense, pay a five hundred dollar ($500) fine; 17
(b) For the second offense, pay a two thousand five hundred dollar ($2,500) fine; 18
and 19
(c) For the third and each subsequent offense, pay a five thousand dollar ($5,000) 20
fine. 21
Section 42. Sections 1 to 5, 10, 16, 19, 20, 26 to 32, 35, 36, and 39 to 41 of this 22
Act take effect July 1, 2027. 23
Section 43. Whereas alcoholic beverages require prompt regulation and 24
enforcement, an emergency is declared to exist, and Sections 6, 11, 12, 13, 25, 37, and 38 25
of this Act take effect upon its passage and approval by the Governor or upon its 26
otherwise becoming a law. 27