New York expands take-out liquor sales, clarifies ‘substantial food items’ provision


By Gail Cole.

When the pandemic forced restaurants and bars to close the front of the house, New York was the first state to temporarily allow take-out and delivery of alcoholic beverages. To-go cocktails have helped many businesses in many states weather the worst of the COVID-19 storm.

After restrictions on on-site dining were lifted, New York was one of the first states to revoke temporary privileges. Shortly after former Governor Cuomo announced the end of the state’s disaster emergency on June 23, 2021, the New York State Liquor Authority (SLA) tweeted that pandemic liens for alcohol delivery and takeout would end “after June 24, 2021”. .” This came as a shock to many, since the SLA had already tweeted that take-out and delivery privileges would be extended until July 5, 2021.

A lot has happened since then, including the spread of new coronavirus variants and the development of new vaccines. New York has a new governor, Kathy Hochul, after her predecessor resigned amid scandals. And on Jan. 5, 2022, Governor Hochul promised to “introduce legislation to permanently permit the sale of take-out beverages for bars and restaurants across the state.”

“To-go beverages have been a critical source of revenue for bars and restaurants in New York City during the pandemic,” the governor’s announcement explained. The permanent authorization of take-out drinks for off-premises consumption “will continue to support the recovery of bars and restaurants”.

The governor didn’t quite get what she wanted, but the New York legislature allowed cocktail parties for three years. Bars, restaurants, and taverns in New York City are free to sell alcohol for offsite consumption beginning April 9, 2022 (the date the bill was signed into law). If you’re one of those companies, here’s what you need to know.

Takeaway alcohol must be sold with “substantial food”

The Take-Out Beverage Act (Senate Bill S8005C) specifies that “Any take-out or delivery purchase must be accompanied by a substantial food purchase”.

The SLA provides further clarity in Notice 2022-2: “Substantial food is defined as sandwiches, soups or other foods, whether fresh, processed, pre-cooked or frozen. Other foods are foods that are similar in quality and substance to sandwiches and soups.

Hot dogs, salads and wings meet the “substantial food” criterion. A bag of chips, a bowl of nuts, or candy doesn’t.

Any “obvious effort to circumvent the law”, such as selling unreasonably small portions or a serving of canned beans, will be “treated as a violation of the law”. In other words, take dietary needs seriously.

Takeout alcohol must be well sealed, but cannot be in its original container

Alcoholic beverages must be packaged in a container with a securely sealed lid or cap in such a way as to prevent consumption without removing the lid/cap or breaking the seal. They must comply with all applicable state and municipal laws, ordinances, regulations or rules relating to open containers.

New York does not allow retailers (i.e. bars, restaurants, and taverns) to sell bottles of liquor or wine for takeout or delivery. Thus, they cannot advertise or suggest that they can sell full bottles of wine or spirits to take away.

The SLA adds that you cannot escape the restriction against full bottle sales by selling the equivalent of a bottle, such as a carafe. “The Authority will consider any obvious attempt to circumvent, for example, the transfer of 740ml of wine from a 750ml bottle to another bottle or container, as a violation of the law.”

You can sell single servings of wine or a single serving of a ready-to-drink (RTD) cocktail, “but not in the original container purchased from a wholesaler.”

No takeaway drink specials

Companies cannot offer off-premises drink specials. “The price per serving will be the same as if consumed on the premises and must not be sold as part of a promotion or special unless such promotion or special is also available for consumption on the premises .”

However, if you offer an offer on a house drink, you can extend the offer to sales for off-site consumption.

Conditions of transport and delivery

Under current New York law, the transportation of open containers of alcoholic beverages in a motor vehicle is prohibited. Alcohol must be carried in the trunk of the vehicle or behind the last right seat. If a vehicle does not have a trunk, alcohol must be kept “in an area not normally occupied by the driver or passenger”.

Deliveries must be made in a vehicle owned and operated, or leased and operated, by Licensee or its employees. Employees may use their own vehicle. A copy of the permit or license must be present in any vehicle during deliveries.

Delivery must be made to a residential address to a person 21 years of age or older who is not intoxicated at the time of delivery. The delivery person must require the recipient to provide a valid photo ID showing that they are at least 21 years old. States take age verification seriously.

Neither the law nor the SLA guidelines mention third-party delivery services. However, the Distilled Spirits Council of the United States (DISCUS) states that third party delivery is permitted.

To-go cocktails permanently allowed in 18+ states

Proponents of to-go cocktails have three years to argue for a permanent extension of New York’s temporary provision. There’s strong support for takeout and delivery liquor sales — nearly 80% of New Yorkers favor takeout — but not everyone thinks it’s a smart move. Mothers Against Drunk Driving (MADD) warns that take-out cocktails could increase drunk driving rates. Additionally, the liquor store industry is concerned that take-out cocktails “threaten the livelihoods of thousands of people in our industry.”

New York is one of many states interested in permanently legalizing take-out cocktails, and nearly 20 states have already done so. According to DISCUS:

  • 35 states temporarily allowed restaurants and/or bars to sell alcohol for takeout at the worst of the pandemic, by decree or other temporary measure
  • 18 states and the District of Columbia passed laws making these provisions permanent: Arizona, Arkansas, Delaware, Iowa, Florida, Georgia, Kansas, Kentucky, Missouri, Montana, Nebraska, Ohio, Oklahoma, Oregon, Rhode Island, Texas, West Virginia, Wisconsin and District of Columbia
  • 13 states have passed laws extending temporary provisions: California (expires December 31, 2026), Colorado (expires July 1, 2025), Connecticut (expires June 4, 2024), Illinois (expires January 3, 2024), Maine (expires March 30, 2025), Maryland (local option – expires June 30, 2023), Massachusetts (expires April 1, 2023), Michigan (expires December 31, 2025), New York, Tennessee (expires July 1, 2023), Vermont (expires July 1, 2023), Virginia (expires July 1, 2024) and Washington (expires July 1, 2023)

Virginia’s temporary provision was set to end on July 1, 2022, but the recent enactment of Senate Bill 254 grants restaurants and bars an additional two years of take-out and delivery privileges.

Policies – and taxes – differ from state to state

The rules and regulations governing take-out liquor privileges are different in each state. For example, while New York requires that the price per drink be the same for dine-in and take-out, Virginia allows restaurants to set different prices for take-out cocktails, as long as “the discount is not less than at cost and that there is no advertising that incites illegal actions such as intoxication or underage drinking.However, these reduced prices must end at 9 p.m.

To-go cocktail tax policies also differ. At the November 2021 National Council of State Legislature (NCSL) Legislative Summit, Kentucky Rep. Adam Koenig said his state saw “no problem” with legalizing delivery and takeout. of alcohol. But he admitted that “now we have to figure out how to tax it properly”.

It can be a lot of work.

Alcohol taxes tend to be quite complex, as alcoholic beverages are often subject to federal, state, and local excise taxes, special liquor taxes, and sales and use taxes. . For example, Texas levies two mixed drink taxes based on the sale, preparation, or service of alcoholic beverages and mixes: the seller must pay the mixed drink gross receipts tax to the state and collect the tax sale on mixed drinks to the customer. But wine, beer, and beer are subject to state and local sales and use tax instead of mixed beverage taxes.

Delivery can further complicate tax compliance. If a restaurant makes a delivery sale to a consumer based in a neighboring tax jurisdiction, what tax rate applies? The price in effect at the restaurant or the price in effect at the point of delivery?

And then there’s the use of third-party vendors. Are delivery charges subject to tax? Who is required to collect and repay the tax due on a sale made through a third party? John Bodnovich, executive director of American Beverage Licenses, says restaurants and bars are concerned about liability when third-party delivery is involved. “They have no control over what this third-party driver is going to do. Will he ask for ID? Leave him on the doorstep?”

These are just a few of the issues that states and local governments face when allowing restaurants, bars, and taverns to sell alcohol for takeout and delivery. Learn more about the issues facing alcohol markets in this five-part blog series by Jeff Carroll, Managing Director of Alcoholic Beverages at Avalara, and Rebecca Stamey-White, Partner at Hinman & Carmicheal LLP.


Gail Cole is a sales tax expert for Avalara with a penchant for digging into the depths of BOE sites and uncovering and reporting rate changes across the country.


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