Other than Kentucky, no other state comes close to Tennessee when it comes to whiskey production. The state is well-known for its whiskey, specifically called Tennessee whiskey, and has several distilleries that produce some of the best-known brands of whiskey in the world.

But whiskey is not all that’s distilled in Tennessee. There are distilleries all over Tennessee manufacturing everything from vodka and gin to rum and tequila.

It shouldn’t come as a surprise that distilleries in Tennessee have various laws and regulations to follow. These laws include state fees, licenses, environmental regulations, and more.

And if you’re curious to know what is legally required to operate a distillery in Tennessee, this guide has everything you need to know.

State Fees

Similar to other states, Tennessee has various state fees that distillers must pay before starting a distillery, as well as fees that are required during the operation of a distillery.

These state fees can depend on the size of the distillery, the type of liquor manufactured, the amount of alcohol produced, and the amount of alcohol stored on the premises.

Information about state distiller fees in Tennessee, including fees that are not required or longer required, are detailed below.

Permit 

Distillers are required to obtain a permit to produce alcohol from the Alcohol and Tobacco Tax and Trade Bureau (TTB), which includes an application fee and annual fee for maintaining the permit.

State License

For the legal manufacturing of liquor in Tennessee, a distillers license must be applied for from the Tennessee Alcoholic Beverage Commission (TABC), which involves a license application fee and annual renewal fee.

Production Fees

Distilleries in Tennessee were once required to pay tax fees per proof gallon of liquor for the first 100,000 gallons of liquor produced. The Craft Beverage Modernization and Tax Reform Act removed this tax, however, in 2019.

Barrel Tax 

Unlike other states, barrels that are kept in Tennessee distillers for liquor production and storage are exempt from barrel tax – a type of property tax that’s required in other states.

Licensing Requirements

A state distillers license is required to produce and distill alcohol in Tennessee. This can be obtained from the Tennessee Alcoholic Beverage Commission (TABC) and is issued after providing the necessary forms.

The application for the Tennessee Alcoholic Beverage Commission state license itself includes a fee, and there are fees for annual renewal of the distillers license, also paid to the Tennessee Alcoholic Beverage Commission.

Distillery Laws And Regulations

Tennessee has various laws and regulations that distilleries in the state must follow.

If you plan on starting a distillery in Tennessee, it’s important to be aware of these state distillery laws and regulations, as well as federal laws and city laws, as violations can result in fines, license revocation, and other penalties.

The main distillery laws and regulations in Tennessee are listed below.

Licensing

Any person who wishes to distill alcoholic spirits for commercial purposes in Tennessee is legally required to obtain a license from the Tennessee Alcoholic Beverage Commission (TABC). Applying is required to become a licensed manufacturer.

Selling Limits

A licensed distillery in Tennessee can sell its products for offsite consumption, as long as the person is of legal drinking age and the amount is no more than five gallons.

Sales must also be conducted between 8am and 11pm, Monday to Saturday, and between the hours of 10 am and 11pm on Sunday to be considered legal.

Tasting Rooms

As long as the Tennessee distillery is a licensed manufacturer, the distillery is legally allowed to serve free samples of its liquor to persons over 21 years of age as part of a tour of its premises.

Advertising

Licensed distilleries in Tennessee are not allowed to advertise free alcohol. Distilleries are also prohibited from advertising their products in a way that is misleading or deceptive, or appealing to audiences who are not of legal drinking age.

How To Start A Distillery

If you’re thinking about starting a distillery in Tennessee, or any state for that matter, the two most important things to consider are the funding and planning.

Before starting a distillery, several factors to consider include:

• Location of the distillery
• Size of distillery
• Brand name
• The type of liquor you want to manufacture
• How you will set your liquor apart from other products

Cost factors include:

• Initial funding
• Collateral if you plan on getting a loan
• Marketing costs
• Distributor costs

It’s also worth taking into account the period of business before it becomes profitable. In a lot of cases, a distillery won’t see profits for at least 10 years. For distilleries that produce spirits that require aging, this can make the process longer.

Type Of Liquor To Manufacture

Before starting a distillery, another thing worth considering is what kind of liquor you want to manufacture. For example, you might be interested in distilling your favorite liquor, but it might take longer to make than other spirits, requiring more investment of your time, effort, and money.

Vodka and gin are unaged spirits that are generally considered to be the easiest types of spirits to distill.

Whiskey is considered harder to distill than vodka and gin, and also must be aged for a minimum of at least 5 years. This is the same for rum, which has an aging process of around 5 to 7 years.

Brandy, on the other hand, can be aged for 2 years, but can also be aged for longer than 10 years, depending on the desired result.

Tequila can be aged between 2 months and 3 years, but is considered to be the most expensive spirit to still.

Distillery Equipment 

Another important aspect of starting a distillery is making an inventory of all the equipment you’ll need to invest in to start distilling spirits. The main equipment needed to start a distillery includes:

• Still
• Fermentation tanks
• Barrels
• Testing equipment
• Storage tanks
• Bottling equipment
• Labeling equipment
• Raw materials
• Health and safety equipment

Tennessee Distillers Guild

The Tennessee Distillers Guild promotes and advocates distilling across the state. And if you’re thinking about operating a distillery in Tennessee, getting involved with the Tennessee Distillers Guild is the best way to start.

By joining the guild, meeting other distillers, and finding out about all the distilleries operating in the state, you can make important connections as well as learn more about the required distiller fees, licensing requirements, and laws.

Conclusion

There are various laws, regulations, and fees for distilleries operating in Tennessee. Tennessee is no exception, however, as many other states have similar liquor laws and regulations, distiller fees, and licensing requirements that must be followed to legally manufacture liquor in the state.