THE BEER LAW WAS PASSED IN 2017 AND BECAME EFFECTIVE APRIL 1 2019
- Changing the Way Beer is Sold by the Package in Kansas

      2017 Sub for SB 13     2018 HB 2502     2019 HB 2035

Below, please find the section of 2017 Sub for SB 13 relating to what and how retailers may sell alcoholic liquor, cereal malt beverage, lottery tickets, cigarettes and tobacco related products, and “other goods and services”.  As reviewed by the KABR Board of Directors, the sale of cereal malt beverages would not go into the category of “other goods and services” and therefore has no logical reason to pay a separate tax rate (sales tax).  KABR is working for the passage of HB 2035 to apply uniformity to the tax paid by liquor retailers on cereal malt beverages, beer, wine and spirits, as well as non-alcoholic beverages defined in the Liquor Control Act.    

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WHAT DOES THE NEW LAW SAY ABOUT RETAIL LIQUOR STORES SELLING NON-LIQUOR PRODUCTS?

2017 Sub for SB 13, Sec. 6. On and after April 1, 2019, K.S.A. 2016 Supp. 41-308 is hereby amended to read as follows: 41-308. (a) Except as provided in K.S.A. 2016 Supp. 41-308d, and amendments thereto, a retailer's license shall allow the licensee to sell and offer for sale at retail and deliver in the original package, as therein prescribed, alcoholic liquor and cereal malt beverage for use or consumption off and away from the premises specified in such license.

(b) A retailer's license shall permit sale and delivery of alcoholic liquor and cereal malt beverage only on the licensed premises and shall not permit sale of alcoholic liquor and cereal malt beverage for resale in any form, except that a licensed retailer may:

(1) Sell alcoholic liquor and cereal malt beverage to a temporary permit holder for resale by such permit holder; and

 (2) sell and deliver alcoholic liquor and cereal malt beverage to a caterer or to the licensed premises of a public venue, club or drinking establishment, if such premises are in the county where the retailer's premises are located or in an adjacent county, for resale by such public venue, club, establishment or caterer.

(b) The holder of a retailer's license shall not sell, offer for sale, give away or permit to be sold, offered for sale or given away in or from the premises specified in such license any service or thing of value whatsoever except alcoholic liquor in the original package, except that a licensed (c)  A retailer may:

(1) Charge a delivery fee for delivery of alcoholic liquor and cereal malt beverage to a public venue, club, drinking establishment or caterer pursuant to subsection (a) (b);

(2) sell lottery tickets and shares to the public in accordance with the Kansas lottery act, if the retailer is selected as a lottery retailer;

(3) include in the sale of alcoholic liquor and cereal malt beverage any goods included by the manufacturer in packaging with the alcoholic liquor or cereal malt beverage, subject to the approval of the director; and

(4) distribute to the public, without charge, consumer advertising specialties bearing advertising matter, subject to rules and regulations of the secretary limiting the form and distribution of such specialties so that they are not conditioned on or an inducement to the purchase of alcoholic liquor.  or cereal malt beverage;

(c) No licensed retailer shall furnish any entertainment in such premises or permit any pinball machine or game of skill or chance to be located in or on such premises. (d) A retailer's license shall allow the licensee to

(5) store alcoholic liquor and cereal malt beverage in refrigerators, cold storage units, ice boxes or other cooling devices, and the licensee may sell such alcoholic liquor and cereal malt beverage to consumers in a chilled condition; and

(6) sell any other good or service on the licensed premises, except that the gross sales of other goods and services, excluding fees derived from the sale of lottery tickets and revenues from sales of cigarettes and tobacco products, shall not exceed 20% of the retailer's total gross sales.

 

RECORDKEEPING AFTER APRIL 1 2019 – For purposes of proper tax remittance, each retailer will need to

1.       Apply for a sales tax registration and remit sales tax reports and payments according to state law.  (https://www.ksrevenue.org/bustaxtypessales.html)

2.       Point of sale system will need to apply the local sales tax rate to the sale of every retail item subject to sales taxes – this would include all non-alcoholic liquor products except non-alcoholic (NA) beer.  2019 HB 2035 changed the tax on cereal malt beverages to enforcement tax when sold by a licensed retail liquor store. 

3.       Liquor stores wanting to sell cigarettes and tobacco products may now apply for the necessary license ($25 for 2 years).  (https://www.ksrevenue.org/bustaxtypescig.html) Be aware that if you purchase from an out of state distributor that does not pay Kansas tobacco taxes, you will need a different license and have to pay the tobacco tax in addition to the sales tax.  Additionally, there is a box to check and an additional fee associated with selling e-cigarettes and vaping products.

 

RECOMMENDED RECORDS STRUCTURE AND CALCULATION OF ALLOWABLE SALES

Gross Sales of Other Goods and Services must be less than 20% of the Store’s Total Gross Sales.

(A + B + C + D) x .20 > D

A	B	C	D
Alcoholic Liquor & CMB Gross Sales	Cigarette and Tobacco Gross Sales	Lottery Gross Sales	Other Goods and Services Gross Sales
Enforcement Tax	Sales Tax		Sales Tax