Cash and Credit Law

Texas law requires retailers to fully pay distributors in cash on delivery for the malt beverages they purchase. Retailers may buy distilled spirits and wine from wholesalers on credit under certain conditions. Distributors and wholesalers must report retailers whose payments are dishonored, incomplete, or late to TABC.

Learn how to report these violations and view all cash and credit law requirements below.

There are two ways to submit cash and credit law violation reports:

Distributors in Texas may only accept a full cash payment for malt beverages when selling to retailers before or at the time of delivery. That means a retailer must fully pay their distributor for malt beverages in cash before or on delivery.

This applies to the following license and permit types:

• Distributor’s License (BB), Branch Distributor's License (BC), or Brewer’s Self-Distribution License (SD) selling malt beverages to those who hold a Retail Dealer's On-Premise License (BE), Retail Dealer’s Off-Premise License (BF), Wine and Malt Beverage Retailer's Permit (BG), or Wine and Malt Beverage Retailer's Off-Premise Permit (BQ). 
• Brewpub License (BP) selling malt beverages to retailers.
• Local Distributor’s Permit (LP) selling malt beverages to a Mixed Beverage Permit (MB), Private Club Registration Permit (N), or Nonprofit Entity Temporary Event Permit (NT).  

Retailers and distributors must follow these requirements when making payment:

• Make payment using U.S. currency, completed electronic funds transfers, cashier's checks, certified checks, money orders, and bank drafts that are payable on demand.
• Post-dated checks are not considered cash sales.  
• If the distributor accepts a check or draft as payment, the distributor must deposit it in the bank for payment within two business days. 

• A retailer violates the cash law when their check or draft is returned because of insufficient funds. TABC’s Alcohol Industry Management System (AIMS) will send an email to the “Prime” user on a retailer’s AIMS account when a cash law violation is recorded for a license or permit associated with the account.
• ​​​​​Distributors must report a retailer’s insufficient payment to TABC within two business days of discovering it in the Cash and Credit Law System, or they will be in violation. Business days are Monday through Saturday, except federal holidays. 
• TABC may take administrative action for one or more violations.

To learn more, view Alcoholic Beverage Code Section 102.31, TABC Rule 45.131, and Marketing Practices Advisory MPA065.

Texas law allows wholesale dealers to sell distilled spirits and wine to retailers on credit, if they choose. If a wholesale dealer allows a retailer to buy distilled spirits and/or wine on credit, the retailer must fully pay for those products by a certain date depending on the delivery date:

• If the wholesale dealer delivers the products to the retailer between the 1st and the 15th of the month, the retailer must pay the wholesale dealer in full by the 25th of that month.
• If the wholesale dealer delivers the products to the retailer between the 16th and the end of the month, the retailer must pay the wholesale dealer in full by the 10th of the next month.
• However, if the due date falls on Saturday, Sunday, or a state or federal holiday, the due date will become the next regular business day.
• If the retailer sends payment to the seller by mail, the payment is not considered late if the seller receives it within four business days of the payment due date.

This applies to the following license and permit types:

• Wholesaler’s Permit (W), Class B Wholesaler’s Permit (X), Local Distributor’s Permit (LP), and Winery Permit (G) selling distilled spirits and/or wine to any retailer.
• A winery is considered to be a retailer under credit law (rather than a wholesale dealer) when it purchases wine from a wholesaler that it intends to resell to consumers.

• A retailer violates the credit law when they fail to pay a wholesale dealer the amount owed by the due date (i.e., payment is late) and do not correct this by paying their wholesale dealer in cash (or a cash equivalent) the full amount owed within four business days of the date the payment was originally due. If the retailer fails to do this, they will be considered delinquent and will be placed on the Credit Law Delinquent List. TABC’s Alcohol Industry Management System (AIMS) will send an email to the “Prime user” on a retailer’s AIMS account when a credit law violation is recorded for a license or permit associated with the account.
• A wholesale dealer must report in the Cash and Credit Law System on the 11th and 26th of each month if any retailer’s payment has become past due, and must also report into that system within the four business days after the payment’s original due date if a past-due retailer makes a late payment for the amount that’s due (which will prevent the retailer from going on the Delinquent List). A wholesale dealer’s failure to timely report is a violation.

• TABC publishes the Credit Law Delinquent List on the fifth business day after the 10th and 25th of each month.
• A retailer who is placed on TABC’s delinquent list will remain on that list, which is effective until TABC publishes the next delinquent list about two weeks later. A retailer can avoid being placed on a subsequent delinquent list by fully paying their wholesale dealer in cash (or a cash equivalent) the amount owed before 12:01 a.m. on the fifth business day after the 10th or 25th of the month.
• Wholesale dealers are prohibited from selling or delivering distilled spirits and/or wine to a retailer who appears on an effective delinquent list (the latest list published by TABC). This prohibition applies to all of a delinquent retailer’s locations, not just the delinquent location. A retailer can buy distilled spirits and/or wine again when their delinquencies are paid and they no longer appear on an effective delinquent list. However, malt beverages may continue to be sold and delivered to a delinquent retailer.
• Wholesale dealers must report in the Cash and Credit Law System any delinquencies a retailer has corrected between the delinquent list publication dates.

To learn more, see Alcoholic Beverage Code Section 102.32, TABC Rule 45.130, and Marketing Practices Advisory MPA065.

All sellers must enter delinquent accounts into the TABC Automated Cash and Credit Law System. If you aren’t already registered in the system, contact your TABC regional office to get a password to access it. You can check which region you’re in below.

Region 1 (Amarillo Regional Office)

Contact: Kara Stephens, Regional Manager
Phone: (806) 353-1286
Email:  Kara.Stephens@tabc.texas.gov
Mailing: 
Texas Alcoholic Beverage Commission
Attention: Audit and Investigations
3131 Bell St., Suite 106
Amarillo, TX 79106

Region 2 (Arlington Regional Office)

Contacts: Stacy Jackson, Regional Manager
Phone: (817) 607-2485
Email: Stacy.Jackson@tabc.texas.gov 
Mailing:
Texas Alcoholic Beverage Commission
Attention: Audit and Investigations
2225 East Randol Mill Road, Suite 200
Arlington, TX 76011

Region 3 (Houston Regional Office)

Contacts: Twila Williams, Regional Manager, or Sita Chivukula, Assistant Regional Manager
Phone: (713) 426-7991
Email: Twila.Williams@tabc.texas.gov or Sita.Chivukula@tabc.texas.gov
Mailing: 
Texas Alcoholic Beverage Commission
Attention: Audit and Investigations
427 West 20th Street, Suite 600
Houston, TX 77008-2497

Region 4 (Austin Regional Office)

Contacts: Stephine Connelly, Regional Manager
Phone: (512) 206-3349
Email: Stephine.Connelly@tabc.texas.gov 
Mailing:
Texas Alcoholic Beverage Commission
Attention: Audit & Investigations
P.O. Box 13127
Austin, TX 78711

Region 5 (San Antonio Regional Office)

Contacts: Michael Kennedy, Regional Manager, or Jodie Persyn, Administrative Assistant
Phone: (210) 354-5998
Email: Michael.Kennedy@tabc.texas.gov or Jodie.Persyn@tabc.texas.gov
Mailing:
Texas Alcoholic Beverage Commission
Attention: Audit & Investigations
Goliad Building
4203 Woodcock Drive, Suite 120
San Antonio, TX 78228-1372

• Alcoholic Beverage Code — Section 102.31. Cash Payment Required 
• Alcoholic Beverage Code — Section 102.32. Sale of Liquor: Credit Restrictions
• TABC Administrative Rules 45.130 (Credit Law) and 45.131 (Cash Law)