Guide to Recent Alcohol Law Changes

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Senate File 2374

On June 7, 2022, Governor Reynolds signed SF2374 into law at Revelton Distilling in Osceola, Iowa. The bill streamlines alcohol licensing processes for in-state and out-of-state alcoholic beverage manufacturers, wholesalers, and retailers, making it easier to conduct business in Iowa. In addition, the bill creates parity in the license fee structure and privileges granted to those businesses engaged in the alcoholic beverage industry in the state.

As of November 14, 2022, ABD has implemented all of the provisions of SF2374. More information on the changes that have been implemented can be found below.

Governor Reynolds Signs SF2374

Gov. Reynolds signing SF2374

ABD Implementation

Native distilleries, native wineries, and native breweries may apply for 2 class "C" retail alcohol licenses at 2 manufacturing locations.

What does this mean to you??

  • As a native manufacturer, you may apply now through eLAPS for a class "C" retail alcohol license.
  • PLEASE NOTE: The fee changes (system changes) associated with the class "C" retail alcohol license have not been implemented into eLAPS which means you will be paying the current class "C" liquor license fee applicable to your location along with a Sunday Sales fee, if you choose to operate on Sunday.

What are your options if you choose not to apply for a Class C retail alcohol license at this time?

  • You can wait until January 1st, 2023, when the new fee structure has been implemented into eLAPS, to apply for a class "C" retail alcohol license.

What if you don’t want to give up your current retail permit/license at your site of manufacturing?

  • Your current retail license or permit, if currently due and eligible for renewal, can be renewed prior to January 1, 2023. Your current retail license or permit will remain in full force and effect until the expiration date on your license or permit.
  • After January 1, 2023, you may not renew or apply for a new class "C" native wine permit, class "C" native distilled spirits liquor license, or class "B" beer permit. If you want to conduct on-premises retail sales, you must apply for a class "C" retail alcohol license.

If you have any questions or wish to discuss your options, please contact our native manufacturing team.

PDF format: Native distilleries, native wineries, and native breweries may apply for 2 class "C" retail alcohol licenses at 2 manufacturing locations.

Class "C" and special class "C" liquor license holders are allowed to purchase not more than 5 cases of beer from a class "E" liquor license holder with a beer subpermit within a 24 hour period of time.

Effective August 8, 2022, class "C" and special class "C" liquor license holders (name will be changing to retail alcohol license) are allowed to purchase not more than 5 cases of beer from a class "E" (off-premises retailer such as a grocery store) liquor license holder with a beer subpermit (holding a TTB Basic Permit to wholesale to retailers) within a 24 hour period of time.

Class "C" and special class "C" liquor licensees - what does this mean to you??

  • You may purchase up to 5 cases of beer (definition of beer includes high alcoholic content beer and canned cocktails) in a 24 hour period of time from a class "E" retailer with a beer subpermit. (Note: This is 5 total cases not 5 cases per brand in a 24 hour period.)
  • The class "E" retailer with a beer subpermit that you purchase from must hold a TTB Basic Permit to resale at wholesale to you.
  • You are required to maintain records of your purchases of alcoholic beverages for resale to patrons at your establishment. The receipts/records for the above mentioned beer purchases must be maintained, accessible, and available for inspection upon request by the ABD.

Class "E" licensees - what does this mean to you??

  • If you have a beer subpermit and you hold a TTB Basic Permit to resale at wholesale, you can sell up to 5 cases of beer (definition of beer includes high alcoholic content beer and canned cocktails) in a 24 hour period of time to a class "C" and special class "C" liquor licensee.
  • You are required to maintain records of your sales of alcoholic beverages to class "C" and special class "C" liquor licensees. The receipts/records for the above mentioned beer sales must be maintained, accessible, and available for inspection upon request by the ABD.

Note: A Class A Beer permittee shall be held harmless concerning any beer resold under this provision of the law.

If you have questions, please email education@iowaabd.com.

PDF format: 5 case allowance for beer purchases.

Delivery by the Class "E" is not allowed for the 5 case beer allowance.

On August 8, 2022, ABD sent out the following correspondence to class "C", special class "C", and class "E" liquor license holders:

Effective August 8, 2022, class "C" and special class "C" liquor license holders (name will be changing to retail alcohol license) are allowed to purchase not more than 5 cases of beer from a Class "E" (off-premises retailer such as a grocery store, convenience store, and independent liquor store) liquor license holder with a beer subpermit (holding a TTB Basic Permit to wholesale to retailers) within a 24 hour period of time.

Since then, we have received numerous questions regarding delivery of beer by Class E liquor license holders to bars and restaurants. Upon review of SF2374 and all of Iowa Code Chapter 123, ABD has determined that delivery by the Class "E" is not allowed for the 5 case beer allowance.

The rationale for this decision is based partially on our understanding of the legislative intent behind this allowance. It is our understanding that these provisions were inserted in the code to allow a limited amount of beer to be purchased when/if a bar or restaurant runs low and needs to obtain some beer to make it through the evening. A similar provision exists for wine (less than a case of each brand in a 24 hour period). Allowing a Class "C" to place an order for beer from a Class "E" in advance with their liquor order is contrary to the legislative intent.

Additionally, ABD is relying on these code sections to justify its decision not to allow this type of delivery:

  • Class "E" sales to Restaurants, Bars, etc. - 123.28 Restrictions on transportation
    • Class "E" liquor control licensees may deliver alcoholic liquor purchased by class "C", class "D" , or class "F" liquor control licensees.
  • Class "E" sales to Consumers - Under 123.46A Delivery of alcoholic beverages by retailers
    • The requirements and restrictions make it clear that delivery under this section applies to "a person and shall be for personal use and not for resale."

If the legislature intended to allow delivery for these types of sales, they would have provided language in the code.

PDF format: Questions regarding delivery of 5 cases of beer to bars and restaurants.

Iowa Brewpubs: off-premises retail sales at your manufacturing location

Therefore, effective September 2, 2022, Iowa brewpubs are allowed to sell the beer they manufacture and package in original, unopened containers at their brewpub location for off-premises consumption without that beer going through a beer wholesaler. Previously, beer a brewpub manufactured and packaged in original, unopened containers and sold for off -premises consumption at the brewpub had to be sold to a beer wholesaler and purchased back by the brewpub. Now, brewpubs may sell ALL of their beer manufactured at that brewpub location directly to the customer.

Important notes:

  • A brewpub is now responsible for payment of beer barrel tax through the ABD eLAPS licensing system on all of their beer that is sold for on- and off-premises consumption at the brewpub location. For barrel tax questions, please reference https://abd.iowa.gov/licensing/elaps, Tax Reporting, or contact our Native Manufacturing Unit at ccrabtree@iowaabd.com or warrick@iowaabd.com.
  • A brewpub shall not transfer beer from one manufacturing location to another manufacturing location without that beer going through a beer wholesaler.
  • A brewpub shall not transfer beer from their manufacturing location to a 5 or 14 day license issued to the brewpub without that beer going through a beer wholesaler.
  • All other beer sold for on- or off-premises consumption at the brewpub location must be purchased from a beer wholesaler or a native brewery that is self-distributing.

PDF format: Iowa Brewpubs: off-premises retail sales at your manufacturing location

Iowa Native Distilleries - Removal of 100,000 Proof Gallon Limit

Effective September 2, 2022, the 100,000 proof gallon manufacturing limit on Iowa Native Distilleries has been removed. All Iowa Native Distilleries may apply for a class "C" retail alcohol license at the site of native distillery manufacturing.

Important notes:

  • A native distillery may be granted not more than 2 class "C" retail alcohol licenses at the site(s) of native distillery manufacturing.
  • A native distillery may not apply for a class "C" license that is not at the site of native distillery manufacturing. (Example: at a 5 day event in the town square)
  • All alcoholic liquor sold and served by the class "C" license at the site of native distillery manufacturing must be purchased from a class "E" license holder. (This includes your own native distilled spirits.)
  • The nine liters per person per day bottle sales must be sold under the native distillery (ND) license at the native distillery. (These are your bottles that you are electronically transferring through ABD and are likely selling at your gift shop with a separate cash register.)
  • The class "C" license may sell all types of alcoholic liquor by the bottle, but those bottles must be purchased through a class "E". (Do not electronically transfer your bottles through ABD and sell them out of the class "C" license.)

If you have questions, please contact our Native Manufacturing Unit at ccrabtree@iowaabd.com or warrick@iowaabd.com.

PDF format: Iowa Native Distilleries - Removal of 100,000 Proof Gallon Limit

Direct Wine Shippers: Removal of bond requirement

Effective August 18, 2022, Wine Manufacturers direct shipping wine to consumers are no longer required to post a bond with their permit.

Class "B" Beer Permit: Guidance on new license selection

Note: This information does not apply to holders of a class "A" beer permit (BAN).

Important Information About Your Class "B" Beer Permit

New laws passed in 2022 reduced the number of retail alcohol licenses from 14 to 8. Your permit, the class "B" beer permit, is one of the retail classifications being eliminated on January 1, 2023.

What does this mean for you?

If the expiration date of your permit is after January 1, 2023:

You will not be able to renew your class "B" beer permit. Instead, you will need to apply for one of the following retail alcohol licenses:

  • Special class "C" retail alcohol license (BW): Allows for the sale of wine and beer for on- and off-premises consumption. Annual fee varies based on the population of the city where your business is located.
  • Class "C" retail alcohol license (LC): Allows for the sale of alcoholic liquor, wine, and beer for on- and off-premises consumption. Annual fee varies based on the population of the city where your business is located.

Applications for a new retail alcohol license must be submitted using the Iowa Alcoholic Beverages Division’s eLAPS licensing system at the following website URL: https://iowaabd.my.site.com/

It is advised that applications be submitted a minimum of 45 days prior to the expiration date of your current permit to allow time for review and approval by your local authority and ABD.

NOTE: Failure to apply for a new retail alcohol license prior to the expiration of your permit may result in an interruption of your alcohol retail sales privileges.

If the expiration date of your permit is before January 1, 2023:
  1. You may apply for a special class "C" or class "C" retail alcohol license as described above.
  2. You may renew your class "B" beer permit for one additional 12-month term.

Your renewal application must be submitted using ABD’s eLAPS system at the following website URL: https://iowaabd.force.com/

NOTE: If you choose to renew, you will be required to apply for a special class "C" or class "C" retail alcohol license prior to the expiration of your class "B" beer permit in 2023.

If you have any questions, please contact ABD at licensing@iowaabd.com or (515) 281-7400, Option 1.

 

PDF version: Class "B" beer permit: guidance on new license selection

Class "C" Native Wine Permit: Guidance on new license selection

Note: This information does not apply to holders of a class "A" wine permit (WAN).

Important Information About Your Class "C" Native Wine Permit

New laws passed in 2022 reduced the number of retail alcohol licenses from 14 to 8. Your permit, the class "C" native wine permit, is one of the retail classifications being eliminated on January 1, 2023.

What does this mean for you?

If the expiration date of your permit is after January 1, 2023:

You will not be able to renew your class "C" native wine permit. Instead, you will need to apply for one of the following retail alcohol licenses:

  • Special class "C" retail alcohol license (BW): Allows for the sale of wine and beer for on- and off-premises consumption. Annual fee varies based on the population of the city where your business is located.
  • Class "C" retail alcohol license (LC): Allows for the sale of alcoholic liquor, wine, and beer for on- and off-premises consumption. Annual fee varies based on the population of the city where your business is located.

Applications for a new retail alcohol license must be submitted using the Iowa Alcoholic Beverages Division’s eLAPS licensing system at the following website URL: https://iowaabd.my.site.com/

It is advised that applications be submitted a minimum of 45 days prior to the expiration date of your current permit to allow time for review and approval by your local authority and ABD.

NOTE: Failure to apply for a new retail alcohol license prior to the expiration of your permit may result in an interruption of your alcohol retail sales privileges.

If the expiration date of your permit is before January 1, 2023:
  1. You may apply for a special class "C" or class "C" retail alcohol license as described above.
  2. You may renew your class "C" native wine permit for one additional 12-month term.

Your renewal application must be submitted using ABD’s eLAPS system at the following website URL: https://iowaabd.my.site.com/

NOTE: If you choose to renew, you will be required to apply for a special class "C" or class "C" retail alcohol license prior to the expiration of your class "C" native wine permit in 2023.

If you have any questions, please contact ABD at licensing@iowaabd.com or (515) 281-7400, Option 1.

 

PDF version: Class "C" native wine permit: guidance on new license selection.

Class "B" liquor control license transition to class "C" retail alcohol license

Important Information About Your Class "B" Liquor Control License

New laws passed in 2022 reduced the number of retail alcohol licenses from 14 to 8. Your license, the class "B" liquor control license, is one of the retail classifications being eliminated on January 1, 2023.

What does this mean for you?

The Iowa Alcoholic Beverages Division will transition current class "B" liquor control licensees to the class "C" retail alcohol license. This will be done automatically and will not require any action by you. You will receive a new class "C" retail alcohol license via email to be printed and displayed on your licensed premises.

The class "C" retail alcohol license allows you to continue selling alcoholic liquor, wine, and beer for on-premises consumption. In addition to these on-premises privileges, you will be able to sell alcoholic liquor, wine, and beer in original, unopened containers for off-premises consumption.

You will notice a decrease in your license fee upon renewal of your class "C" retail alcohol license. You will also notice that Sunday sales are no longer an additional privilege with an additional fee. Sunday sales are allowed and included in your base license fee.

If you have any questions, please contact ABD at licensing@iowaabd.com or (515) 281-7400, Option 1.

 

PDF version: Class "B" liquor control license transition to class "C" retail alcohol license.

Class "C" Beer Permit: Guidance on new license selection

Important Information About Your Class “C” Beer Permit

New laws passed in 2022 reduced the number of retail alcohol licenses from 14 to 8. Your permit, the class “C” beer permit, is one of the retail classifications being eliminated on January 1, 2023.

What does this mean for you?

If the expiration date of your permit is after January 1, 2023:

You will not be able to renew your class “C” beer permit. Instead, you will need to apply for one of the following retail alcohol licenses:

  • Class “B” retail alcohol license (LG): Allows for the sale of wine and beer for off-premises consumption. Annual fee varies based on the population of the city where your business is located and the square footage of your licensed premises.
  • Class “E” retail alcohol license (LE): Allows for the sale of alcoholic liquor, wine, and beer for off-premises consumption. Annual fee varies based on the population of the city where your business is located and the square footage of your licensed premises.

Applications for a new retail alcohol license must be submitted using the Iowa Alcoholic Beverages Division’s eLAPS licensing system at the following website URL: https://iowaabd.my.site.com/

It is advised that applications be submitted a minimum of 45 days prior to the expiration date of your current permit to allow time for review and approval by your local authority and ABD.

NOTE: Failure to apply for a new retail alcohol license prior to the expiration of your permit may result in an interruption of your alcohol retail sales privileges.

If the expiration date of your permit is before January 1, 2023:
  1. You may apply for a class “B” or class “E” retail alcohol license as described above.
  2. You may renew your class "C" beer permit for one additional 12-month term.

Your renewal application must be submitted using ABD’s eLAPS system at the following website URL: https://iowaabd.my.site.com/

NOTE: If you choose to renew, you will be required to apply for a class “B” or class “E” retail alcohol license prior to the expiration of your class “C” beer permit in 2023.

If you have any questions, please contact ABD at licensing@iowaabd.com or (515) 281-7400, Option 1.

 

PDF version: Class "C" beer permit: guidance on new license selection.

Class "B" Wine Permit: Guidance on new license selection

Important Information About Your Class "B" Wine Permit

New laws passed in 2022 reduced the number of retail alcohol licenses from 14 to 8. Your permit, the class "B" wine permit, is one of the retail classifications being eliminated on January 1, 2023.

What does this mean for you?

If the expiration date of your permit is after January 1, 2023:

You will not be able to renew your class "B" wine permit. Instead, you will need to apply for one of the following retail alcohol licenses:

  • Class “B” retail alcohol license (LG): Allows for the sale of wine and beer for off-premises consumption. Annual fee varies based on the population of the city where your business is located and the square footage of your licensed premises.
  • Class “E” retail alcohol license (LE): Allows for the sale of alcoholic liquor, wine, and beer for off-premises consumption. Annual fee varies based on the population of the city where your business is located and the square footage of your licensed premises.

Applications for a new retail alcohol license must be submitted using the Iowa Alcoholic Beverages Division’s eLAPS licensing system at the following website URL: https://iowaabd.my.site.com/

It is advised that applications be submitted a minimum of 45 days prior to the expiration date of your current permit to allow time for review and approval by your local authority and ABD.

NOTE: Failure to apply for a new retail alcohol license prior to the expiration of your permit may result in an interruption of your alcohol retail sales privileges.

If the expiration date of your permit is before January 1, 2023:
  1. You may apply for a class “B” or class “E” retail alcohol license as described above.
  2. You may renew your class "B" wine permit for one additional 12-month term.

Your renewal application must be submitted using ABD’s eLAPS system at the following website URL: https://iowaabd.my.site.com/

NOTE: If you choose to renew, you will be required to apply for a sclass “B” or class “E” retail alcohol license prior to the expiration of your class “B” wine permit in 2023.

If you have any questions, please contact ABD at licensing@iowaabd.com or (515) 281-7400, Option 1.

 

PDF version: Class "B" wine permit: guidance on new license selection.

Class “A” liquor control license transition to class “F” retail alcohol license.

Important Information About Your Class “A” Liquor Control License

New laws passed in 2022 made changes to retail alcohol license classifications. Your license, the class “A” liquor control license, was reclassified to a class “F” retail alcohol license.

What does this mean for you?

Your class “A” liquor control license has been automatically changed to a class “F” retail alcohol license in the eLAPS licensing system. The letters in your license number have been changed from “LA” to “LF”. The license number itself has not changed. Your effective and expiration dates have not changed.

On or before Friday, November 18, 2022 you will receive a new class “F” retail alcohol license by email to be printed and displayed on your licensed premises.

Your alcohol sales privileges have not changed. The class “F” retail alcohol license continues to allow you to sell alcoholic liquor, wine, and beer for on-premises consumption to your club members and their guests.

You will notice a decrease in your license fee when you renew your class “F” retail alcohol license. This is because Sunday sales are no longer an additional privilege with an additional fee. Sunday sales are allowed and included in your base license fee.

If you have any questions about this transition, please contact ABD at licensing@iowaabd.com or (515) 281-7400, option 1.


PDF version: Class “A” liquor control license transition to class “F” retail alcohol license.

Learn how the 2022 Legislative Changes affect Native Wineries

2022 Legislative Updates for Iowa Wineries