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Beer and Ale Changes

Beer and ale in Texas are no longer separate classifications under state law and instead fall under one malt beverage category. Use this page to learn about the change.

In most cases, the current laws, rules and regulations for beer apply to the new malt beverage category. The category is also be included in the new Alcohol Industry Management System (AIMS) that the alcoholic beverage industry is beginning to use to conduct their TABC business.

The merging of beer and ale brings changes for:

  • TABC’s licensing structure
  • Excise tax reporting and payments
  • Nonresident reporting
  • Product registration
  • Cash and credit law
  • Marketing practices
  • Hours of distribution and sale
  • Transportation and storage
  • Local option elections
  • Warehouse registration

This Page is For:

  • Malt beverage (beer and ale) manufacturers and distributors, both in state and nonresidents, including:
    • Wholesaler’s Permit (W)
    • General Class B Wholesaler’s Permit (X)
    • General Distributor’s License (BB)
    • Branch Distributor’s License (BC)
    • Brewpub License (BP)
    • Brewer’s License (BW)
    • Manufacturer’s License (BA)
    • Brewer’s Permit (B)
    • Nonresident Manufacturer’s License (BS)
    • Nonresident Seller’s Permit (S) with a subordinate Nonresident Brewer’s Permit (U)
  • Retailers including:
    • Package Store Permit (P)
    • Wine-Only Package Store Permit (Q)
    • Wine and Beer Retailer’s Permit (BG)
    • Wine and Beer Retailer’s Off-Premise Permit (BQ)
    • Retail Dealer’s On-Premise License (BE)
    • Retail Dealer’s Off-Premise License (BF)

What Are Beer, Ale and Malt Beverages?

  • Until Sept. 1, 2021:
    • Beer — a malt beverage containing 4% or less of alcohol by weight.
    • Ale — a malt beverage containing more than 4% of alcohol by weight.
  • Starting Sept. 1, 2021:
    • Malt beverages – a fermented beverage containing 0.5% or more of alcohol by volume that is brewed or produced from malt or a malt substitute. This includes both beer and ale.

New Licensing Structure

Key Dates

Sept. 1, 2021 — New license and permit types take effect.

Overview

If you have a beer or ale license or permit, it will became a new malt beverage license on Sept. 1. All  Brewer’s (B), Brewer’s Self-Distribution (DA), and Nonresident Brewer’s (U) Permits will automatically convert to the new Brewer’s License, Brewer’s Self-Distribution License, and Nonresident Brewer’s License on Sept. 1. However, permittees that hold a permit authorizing the purchase, sale, transportation, or storage of ale and malt liquor may continue to deal in those beverages until their current expiration date. These changes are part of the new laws going into effect that will streamline license and permit types.

Key Changes

See what this means for your business and download a chart explaining the changes on our Licensing Changes page.

Excise Tax Reporting and Payments

Key Dates

  • September 2021 — The following license and permit holders should claim their business in AIMS to file excise tax reports in October for the September reporting period:
    • Wholesaler’s Permit (W) and General Class B Wholesaler’s Permit (X).
    • General Distributor’s License (BB) and Branch Distributor’s License (BC).
    • The new Brewer’s License that goes into effect Sept. 1. The Manufacturer’s License (BA) and Brewer’s Permit (B) will be eliminated and replaced with this license.
    • Brewpub License (BP) holders.
  • September 2021 — All malt beverage (beer and ale) sales should be merged and recorded under the following licenses:
    • General Distributor’s License (BB) and Branch Distributor’s License (BC).
    • The new Brewer’s License (BW) that goes into effect Sept. 1.
    • Brewpub License (BP).
  • October 2021Report and pay all excise taxes on malt beverages in AIMS for sales from September.

Overview

All license holders that file excise tax reports should claim their business in AIMS in September to file fiscal year 2022 reports in October. Beginning Oct. 1, we’ll encourage businesses to use AIMS over paper to file excise tax reports and make payments.

Key Changes

Current License or PermitAction Needed
Wholesalers (W and X)All sales in September of malt beverages should be associated with the distributor and recorded as such in the distributor’s inventory.

Only distributors can report malt beverage sales in AIMS.
Distributors (BB and BC)All sales in September of malt beverages should be associated with the distributor and recorded as such in the distributor’s inventory. When you report September sales in October, the beginning inventory will be the total of the wholesaler’s closing inventory of ale from August sales (filed in September) combined with the total of the distributor’s closing inventory of beer from August sales (filed in September).
Holders of both a Manufacturer’s License (BA) and Brewer’s Permit (B)When you report September sales in October, the beginning inventory will be the total of the manufacturer’s closing inventory from August sales (filed in September) combined with the total of the brewer’s closing inventory from August sales (filed in September). Brewers need to maintain records so that the agency can verify they properly combined their previous ale and beer inventories.
Holders of either a Manufacturer’s License (BA) or Brewer’s Permit (B)When you report September sales in October, the beginning inventory is the total of the closing inventory of August sales (filed in September). 
Brewpubs (BP)When you report September sales in October, all malt beverage sales will be reported in AIMS on one report and at one tax rate. You won’t need to put sales of beer and ale in separate columns. 

Nonresident Reporting

Key Dates

  • September 2021 — The following license and permit holders should claim their business in AIMS to file reports in October:
    • The new Nonresident Brewer’s License (BN) that goes into effect Sept. 1. The Nonresident Manufacturer’s License (BS) and Nonresident Brewer’s Permit (U) will be eliminated and replaced with this license.  The new license will not be a subordinate to the Nonresident Seller’s Permit (S), which will still exist as a standalone permit.
    • Nonresident Seller’s Permit (S) to record imports of wine and distilled spirits. Effective Sept. 1, an S Permit may no longer import malt beverage products.
  • September 2021 — All sales of malt beverage (beer and ale) should be assumed and recorded under the new Nonresident Brewer’s License (BN) that goes into effect Sept. 1.
  • October 2021 — Nonresident Brewer’s License (BN) holders will report malt beverage sales from September in AIMS.

Overview

All license holders that file reports should claim their business in AIMS in September to file fiscal year 2022 reports in October. Beginning Oct. 1, we will encourage businesses to use AIMS over paper to file reports.

Key Changes

Current License or PermitAction Needed
Holders of either a Nonresident Manufacturer’s License (BS) or Nonresident Seller’s Permit (S) with a subordinate Nonresident Brewer’s Permit (U)All malt beverage sales from September should be associated with the new Nonresident Brewer’s License (BN) and recorded as such in the brewer’s inventory. 

Only nonresident brewers can report malt beverage sales in AIMS.
Holders of both a Nonresident Manufacturer’s License (BS) and Nonresident Seller’s Permit (S) with a subordinate Nonresident Brewer’s Permit (U)All malt beverage sales from September should be associated with the new Nonresident Brewer’s License (BN) and recorded as such in the brewer’s inventory. The brewer will combine their beer and ale sales to a Texas distributor into malt beverage sales.

Only nonresident brewers can report malt beverage sales in AIMS.

Product Registration

Key Dates

Sept. 1, 2021 — Manufacturers must place alcohol by volume (ABV) on malt beverage labels (pending — rule not yet formally adopted).

Overview

For beer and ale products registered before Sept. 1, 2021, manufacturers will have until Sept. 1, 2023, to update their product registrations with ABVs. If a manufacturer makes a change to the label that requires a new federal Certificate of Label Approval (COLA) before Sept. 1, 2023, the label must be updated to include the ABV at that time.

Key Changes

Current (Until Sept. 1)Malt Beverage (Sept. 1 and After)
ABV is not required on beer and ale products. Manufacturers must place ABV on malt beverage (beer and ale) labels.

All new product labels must include the ABV. Sept. 1, 2023 is the deadline to comply with this requirement for all products registered before Sept. 1, 2021. This rule is pending and not yet formally adopted. The rule is subject to change until that time.

Cash and Credit Law

Key Dates

Sept. 1, 2021 and after — Cash law will apply to malt beverages (beer and ale).

Overview

Beer and ale manufacturers will follow cash law after the two products merge under one malt beverage category.

Key Changes

Until Sept. 1, 2021Malt Beverage (Sept. 1 and After)
Cash law applies to beer. Credit law applies to ale.Cash law applies to all malt beverages (beer and ale). Distributors in Texas can accept only cash when selling malt beverages. Post-dated checks are not considered cash sales, but a valid check or draft payable on demand can be accepted as cash. If a check or draft is accepted, the distributor must deposit it in the bank for payment within two days. If a check or draft does not go through, the distributor must report it to TABC within two days from receipt of the notification from the distributor’s financial institution. Sundays and legal holidays are not counted.

Credit law applies to wine and distilled spirits. If a wholesale dealer sells distilled spirits, wine or malt liquor on credit to a retailer, the retailer must make payment by a certain time of the month. When the retailer pays depends on the timing of their purchase. If the purchase is completed: (1) From the first through the 15th of the month, payment must be made on or before the 25th of the same month. (2) From the 16th through the last day of a month, payment must be made on or before the 10th of the next month. Wholesalers are not required to sell liquor on credit.

Learn about current (pre-Sept. 1) requirements on our Cash and Credit Law page.

Hours of Distribution and Sale

Key Dates

Sept. 1, 2021 — New malt beverage hours take effect.

Overview

Malt beverages (beer and ale) will have the same hours of distribution and sale as beer currently does.

Key Changes

Until Sept. 1, 2021Malt Beverage (Sept. 1 and After)
Distributors can deliver beer anytime except between 1 a.m. and noon Sundays.

Wholesalers may not deliver ale on Sunday or Christmas Day.
Distributors can deliver all malt beverages (beer and ale) any time except between 1 a.m. and noon Sundays.

Marketing Practices

Changes to Marketing Practices advisories are under consideration by the Commission.

Transportation and Storage

Key Dates

Sept. 1, 2021 — New malt beverage transportation and storage privileges take effect.

Overview

  • Businesses will no longer need to get storage or transport-related permits that apply to ale only. The Private Carrier Permit (O), Public Storage Permit (K) and Private Storage Permit (L) that currently apply to Brewer’s Permit holders will no longer be required to conduct these activities. 
  • Current storage and transport-related privileges applying to the Manufacturer's License (BA) will apply to the newly consolidated Brewer’s License (BN). 
  • Wine and Malt Beverage Retailers (BG) with a Brewpub License (BP) will be able to transport all malt beverages without having a Private Carrier’s Permit for ale.

Key Changes

Until Sept. 1, 2021Malt Beverage (Sept. 1 and After)
Businesses must get storage or transport-related permits that only apply to ale. Beer transport and storage privileges apply to all malt beverages. No ale storage or transport-related permits are needed.

Local Option Elections

Key Dates

Sept. 1, 2021 — Local option elections can no longer propose beer only in elections.

Overview

Beer is no longer a beverage type under the Alcoholic Beverage Code. However, businesses in current beer-only jurisdictions must continue to sell only malt beverages of 5% alcohol by volume or less, unless a future local option election allows for sales of all malt beverages. Jurisdictions can no longer hold beer-only local option elections and must include malt beverages (beer and ale under current law).

Key Changes

Until Sept. 1, 2021Malt Beverage (Sept. 1 and After)
Jurisdictions can hold local option elections to allow beer only, excluding ale.Jurisdictions can no longer hold elections that propose beer only (e.g., if a dry area wants a local option election to approve malt beverage sales, the area must allow all malt beverages).

Current beer-only jurisdictions operate as usual unless they hold a local option election to allow malt beverage sales. Malt beverage sales will be limited to products of up to 5% alcohol by volume until the new election.

Warehouse Registration

Key Dates

Sept. 1, 2021 — Holders of the new Brewer’s License (BN) must follow the warehouse registration requirement.

Overview

Beer and ale consolidation means that Brewer’s License holders must register warehouses with TABC, according to Section 62.08(e) of the Alcoholic Beverage Code. Distributors already follow this requirement.

Key Changes

Until Sept. 1, 2021Malt Beverage (Sept. 1 and After)
Manufacturer’s License (BA) and Distributor’s License (BB/BC) holders must register any warehouses using a TABC form. This requirement went into effect on Sept. 1, 2019.Holders of the Brewer’s License (BN) and Distributor’s License (BB/BC) will follow the warehouse registration requirement. This is not a change for distributors. However, the Brewer’s License is a new, consolidated license authorizing production of all malt beverages (beer and ale). This means more businesses must follow this requirement. For example, a business that holds a Brewer’s Permit (B) before Sept. 1, 2021 and has a warehouse used to store ale they produce will have to register that facility with TABC.

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