Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2012
Alcoholic Beverage Tax Law
Business and Professions Code Provisions Relating To the Alcoholic Beverage Tax Law1
CHAPTER 1. GENERAL PROVISIONS AND DEFINITIONS2
- 23013. "Wine grower."
- 23013.5. "Wine blender."
- 23014. "Brandy manufacturer."
- 23015. "Distilled spirits manufacturer."
- 23016. "Rectifier."
- 23017. "Importer."
- 23018. "Exporter."
- 23019. "Customs broker."
- 23020. "Wine broker."
- 23021. "Wholesaler."
- 23022. "Industrial alcohol dealer."
- 23023. "Retailer."
- 23024. "Retailer's on-sale license."
- 23025. "Sell" or "sale."
- 23026. "Retail sale."
- 23027. "Wholesale sale."
- 23028. "Package."
- 23029. "Case."
- 23030. "To bottle" or "to package."
- 23031. "Gallon" or "wine gallon."
- 23032. "Proof spirits."
- 23033. "Proof gallon."
- 23034. "Still."
- 23035. "Private warehouse."
- 23036. "Public warehouse."
- 23037. "Club."
- 23038. "Bona fide public eating place"; "meals"; "guests."
- 23038.1. "Bona fide public eating place" continued.
- 23038.2. "Bona fide eating place" continued.
- 23038.3. "Bona fide eating place"; cooking school
- 23039. "Public premises." [Repealed.]
- 23039. "Public premises."
- 23039.1. Admission of minors to cabaret theater.
- 23040. "Within this State."
- 23041. "Without the State."
- 23042. "Board."
- 23043. "Department"; "director."
- 23044. "License."
- 23045. "Appeals board."
- 23046. "Air common carrier."
- 23047. "Scheduled flight."
1See Section 32002 of Revenue and Taxation Code in this volume.
2The provisions of this chapter, except as otherwise noted, were added by Stats. 1953, p. 954, in effect September 9, 1953.
CHAPTER 1. GENERAL PROVISIONS AND DEFINITIONS2
23001. Purposes of act. This division is an exercise of the police powers of the State for the protection of the safety, welfare, health, peace, and morals of the people of the State, to eliminate the evils of unlicensed and unlawful manufacture, selling, and disposing of alcoholic beverages, and to promote temperance in the use and consumption of alcoholic beverages. It is hereby declared that the subject matter of this division involves in the highest degree the economic, social, and moral well-being and the safety of the State and of all its people. All provisions of this division shall be literally construed for the accomplishment of these purposes.
23001.5. Severability clause. If any provision of this division or the application thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions or applications of this division that can be given effect without the invalid portion or application, and to this end the provisions of this division are severable. It is the intent of the Legislature that this division would have been adopted regardless if such invalid provision had not been included or any invalid application had not been made.
23004. "Alcoholic beverage." "Alcoholic beverage" includes alcohol, spirits, liquor, wine, beer, and every liquid or solid containing alcohol, spirits, wine, or beer, and which contains one-half of 1 percent or more of alcohol by volume and which is fit for beverage purposes either alone or when diluted, mixed, or combined with other substances.
Grain alcohol.—Grain alcohol imported in tank cars and unfit for beverage purposes until redistilled is not an alcoholic beverage within the meaning of this section. American Distilling Co. v. State Board of Equalization, 144 Cal.App.2d 457.
23005. "Distilled spirits." "Distilled spirits" means an alcoholic beverage obtained by distillation of fermented agricultural products, and includes alcohol for beverage use, spirits of wine, whiskey, rum, brandy, and gin, including all dilutions and mixtures thereof.
Construction.—The definition of distilled spirits in this section controls the construction of that term as it is used throughout this division. American Distilling Co. v. State Board of Equalization, (1956) 144 Cal.App.2d 457.
23006. "Beer." "Beer" means any alcoholic beverage obtained by the fermentation of any infusion or decoction of barley, malt, hops, or any other similar product, or any combination thereof in water, and includes ale, porter, brown, stout, lager beer, small beer, and strong beer but does not include sake, known as Japanese rice wine.
Intoxicating nature.—Whenever merchandise is sold as "beer" it could not mean anything but an intoxicating beverage. Molina v. Munro, (1956) 145 Cal.App.2d 601.
23007. "Wine." "Wine" means the product obtained from normal alcoholic fermentation of the juice of sound ripe grapes or other agricultural products containing natural or added sugar or any such alcoholic beverage to which is added grape brandy, fruit brandy, or spirits of wine, which is distilled from the particular agricultural product or products of which the wine is made and other rectified wine products and by whatever name and which does not contain more than 15 percent added flavoring, coloring, and blending material and which contains not more than 24 percent of alcohol by volume, and includes vermouth and sake, known as Japanese rice wine.
Nothing contained in this section affects or limits the power, authority, or duty of the State Department of Health Services in the enforcement of the laws directed toward preventing the manufacture, production, sale, or transportation of adulterated, misbranded, or mislabeled alcoholic beverages, and the definition of "wine" contained in this section is limited strictly to the purposes of this division and does not extend to, or repeal by implication, any law preventing the production, manufacture, sale, or transportation of adulterated, misbranded, or mislabeled alcoholic beverages.
History.—Stats. 1971, p. 3224, operative July 1, 1972, added "State" preceding "Department of Health" in second paragraph. Stats. 1977, Ch. 1252, added "Public" preceding "Health" in second paragraph. Stats. 1978, Ch. 429, operative July 1, 1978, in the second paragraph deleted "Public" following "Department of" and added "Services" following "Health".
Wine definition.—Mixtures containing wine, alcohol, flavoring and water, with the added alcohol being three times as much as the wine are not wines within the meaning of the Alcoholic Beverage Control Act. Tux Ginger Ale Co., Ltd. v. Davis, (1936) 12 Cal.App.2d 73.
23008. "Person." "Person" includes any individual firm copartnership, joint adventure, association, corporation, estate, trust, business trust receiver syndicate, or any other group or combination acting as a unit, and the plural as well as the singular number.
Construction.—A license held by a corporation may be revoked after transfer of all the stock of the corporation for violations occurring prior to such transfer. When a license is issued to a corporation it retains the same and is responsible for the license until it is suspended or revoked. Maxwell Cafe, Inc. v. Dept. of Alcoholic Beverage Control, (1956) 142 Cal.App.2d 73.
History.—Stats. 1955, p. 897, in effect September 7, 1955, substituted "department" for "board." Stats. 2004, Ch. 437 (AB 3085), in effect September 9, 2004, added ", a permit, a certification, or any other authorization" after "person holding a license".
History.—Stats. 1955, p. 3409, in effect September 7, 1955, added reference to Revenue and Taxation Code.
History.—Stats. 1965, p. 1811, in effect September 17, 1965, added "who has facilities and equipment for the conversion of grapes, berries or other fruit into wine and is" in the first sentence. Stats. 2008, Ch. 28 (SB 607), in effect June 6, 2008, added the comma after "berries"; and deleted ", except that any person who produces not to exceed 200 gallons of wine per year for his own consumption shall not, because of such production, be considered a winegrower within the meaning of this division" at the end.
23013.5. "Wine blender." A "wine blender" is a person authorized to operate a bonded wine cellar pursuant to a permit issued for that purpose under the Internal Revenue Laws of the United States but who does not have facilities or equipment for the conversion of grapes, berries or other fruit into wine and does not engage in the production of wine in commercial quantities, provided that any person who produces or blends not to exceed 200 gallons of wine per year shall not, because of such production or blending, be considered a wine blender within the meaning of this division.
History.—Added by Stats. 1965, p. 1811, in effect September 17, 1965.
23015. "Distilled spirits manufacturer." "Distilled spirits manufacturer" means any person who produces distilled spirits from naturally fermented materials or in any other manner. "Distilled spirits manufacturer" shall not include a winegrower that produces spirits of wine, provided the spirits of wine are blended into wine produced by the winegrower, are sold to an industrial alcohol dealer, or are destroyed by the winegrower.
History.—Stats. 2010, Ch. 129 (AB 1649), in effect January 1, 2011, added second sentence.
Construction.—This section recognizes that distilled spirits may be manufactured other than by the distillation of fermented agricultural products, such as by redistillation. American Distilling Co. v. State Board of Equalization, (1956) 144 Cal.App.2d 457.
23016. "Rectifier." "Rectifier" means every person who colors, flavors, or otherwise processes distilled spirits by distillation, blending, percolating, or other processes. "Rectifier" does not include an on-sale licensee that colors, flavors, or blends distilled spirits or wine products on the on-sale licensed premises to be consumed on the licensed premises.
History.—Stats. 2011, Ch. 301 (SB 32), in effect September 21, 2011, added the second sentence.
Redistilling.—Manufacture of gin, vodka and whiskey by redistilling grain alcohol unfit for beverage use before such redistillation is not rectification. American Distilling Co. v. State Board of Equalization, (1956) 144 Cal.App.2d 457.
(a) Any consignee of alcoholic beverages brought into the State from without this State, when the alcoholic beverages are for delivery or use within this State.
(b) Any person, except a public warehouse licensed under this division, to whom delivery is first made in this State of alcoholic beverages brought into this State from without this State for delivery or use within this State.
(c) Any person, licensed as an importer, selling alcoholic beverages to nonlicensees within an area over which the United States Government exercises jurisdiction, when delivery of the alcoholic beverages is made to the nonlicensees by a common carrier transporting the alcoholic beverages from a point outside this State.
(d) Any person bringing alcoholic beverages into this State from without this State which are not consigned to any person and which are for delivery or use within this State.
A person licensed as a customs broker who is acting as an agent for a licensed importer or for another person whose place of business is without the State shall not be deemed to be the importer of alcoholic beverages consigned in United States internal revenue bond or in United States customs bond to a licensed customs broker.
23019. "Customs broker." "Customs broker" means every person who is authorized to act as agent or broker for a person licensed as an importer or for a person whose place of business is without the State, in regard to the importing of alcoholic beverages into the State in United States internal revenue bond or in United States customs bond.
23020. "Wine broker." "Wine broker" means every person, other than a salesman who is regularly employed by a licensee, who engages as an agent in the sale or purchase of wine for or on behalf of another or others for a fee or commission.
23021. "Wholesaler." "Wholesaler" means every person other than a manufacturer, winegrower, or rectifier who is engaged in business as a jobber or wholesale merchant, dealing in alcoholic beverages, in an area within the United States other than a territory or possession of the United States, or within a foreign country having common boundaries with any state of the United States.
History.—Stats. 1973, Ch. 453, effective January 1, 1974, excluded wholesalers in a territory or possession of the United States. Stats. 1975, Ch. 597, in effect January 1, 1976, substituted "the United States" for "or without the state" and added the phrase beginning "or within a foreign country."
23022. "Industrial alcohol dealer." "Industrial alcohol dealer" means a person who sells alcohol or distilled spirits in packages of more than one gallon for use in the trades, professions, or industries, but not for beverage use.
23024. "Retailer's on-sale license." "Retailer's on-sale license" means on-sale beer licenses, on-sale beer and wine licenses, on-sale general licenses, and on-sale general licenses for seasonal businesses.
23025. "Sell" or "sale." "Sell" or "sale" and "to sell" includes any transaction whereby, for any consideration, title to alcoholic beverages is transferred from one person to another, and includes the delivery of alcoholic beverages pursuant to an order placed for the purchase of such beverages and soliciting or receiving an order for such beverages, but does not include the return of alcoholic beverages by a licensee to the licensee from whom such beverages were purchased.
"Sale" includes giving samples.—Where distilled spirits are given away as samples, apparently for the purpose of encouraging the sale of the product, such distributions are not in the true sense gratuitous and hence they are taxable. Tonkin Distributing Co., Inc. v. Collins, 50 Cal.App.2d 790; Sauers Wholesale Co. v. Collins, (1942) 50 Cal.App.2d 786; Rathjen Bros. Inc. v. Collins, (1942) 50 Cal.App.2d 774.
"Sale" includes delivery.—There was a delivery of alcoholic beverages in this State and, hence, a sale within the definition when distilled spirits were shipped from a point outside of California to the United States Army on a military reservation in California under a bill of lading designating the shipper as consignor. National Distillers Products Corp. v. State Board of Equalization, (1947) 83 Cal.App.2d 35.
Delivery not deemed a sale.—See Section 23661.2 of the B. & P. Code under which certain deliveries of wine shipments are not deemed to constitute sales in this State.
23032. "Proof spirits." "Proof spirits" means that alcoholic liquor which contains one-half of its volume of pure ethyl alcohol of a specific gravity of 0.7939 at 60 degrees Fahrenheit, referred to water at 60 degrees Fahrenheit as unity.
23034. "Still." "Still" means any apparatus capable of being used for separating alcohol, or alcoholic vapors or solutions from alcohol or alcoholic solutions or mixtures, but does not include stills or apparatus used for laboratory purposes or solely in the production of distilled water or substances other than alcoholic beverages.
History.—Stats. 1959, p. 2510, in effect September 18, 1959, reworded this section.
23035. "Private warehouse." "Private warehouse" means any place maintained by a licensee, other than his licensed premises, for the storage but not for the sale of alcohol or alcoholic beverages owned by the licensee.
23036. "Public warehouse." "Public warehouse" means any place licensed for the storage of, but not the sale of, alcohol or alcoholic beverages for the account of other licensees and includes United States custom bonded warehouses and United States internal revenue bonded warehouses when the bonded warehouses are used for storage of alcoholic beverages for the account of another licensee.
23037. "Club." "Club" means a corporation or association which is the owner, lessee, or occupant of an establishment operated solely for objects of a social or athletic nature but not for pecuniary gain, having a bona fide membership list, and the majority of the members of which pay dues at least once in every year, and the property as well as the advantages of which belong to the members, and which sells alcoholic beverages only to its members and its bona fide guests. A guest is defined as a person who is actually a houseguest, or a person whose presence as a guest is in response to a specific invitation for the special occasion.
History.—Stats. 1957, p. 1829, in effect September 11, 1957, added "and which sells alcoholic beverages only to its members and its bona fide guests" at end of first sentence and added the last sentence.
23038. "Bona fide public eating place"; "meals"; "guests." "Bona fide public eating place" means a place which is regularly and in a bona fide manner used and kept open for the serving of meals to guests for compensation and which has suitable kitchen facilities connected therewith, containing conveniences for cooking an assortment of foods which may be required for ordinary meals, the kitchen of which must be kept in a sanitary condition with the proper amount of refrigeration for keeping of food on said premises and must comply with all the regulations of the local department of health. "Meals" means the usual assortment of foods commonly ordered at various hours of the day; the service of such food and victuals only as sandwiches or salads shall not be deemed a compliance with this requirement. "Guests" shall mean persons who, during the hours when meals are regularly served therein, come to a bona fide public eating place for the purpose of obtaining, and actually order and obtain at such time, in good faith, a meal therein. Nothing in this section, however, shall be construed to require that any food be sold or purchased with any beverage.
History.—Stats. 1955, p. 3284, in effect September 7, 1955, operative January 1, 1957, upon adoption of an amendment to Section 22, Article XX, California Constitution, substituted present provisions for former provisions defining hotel, restaurant, cafe, cafeteria and other public eating place.
Concession agreement.—Except as permitted by last sentence of Section 23787, a licensee under a bona fide public eating place on-sale general license may not lease or make a concession agreement under which he would in effect sublet the restaurant operations on his premises. 29 Ops. Atty. Gen. 95.
Ownership of license as evidence of ownership of connected restaurant.—The appearance of a person's name on a liquor license of a type which required him to serve food is evidence that he is the owner and operator of a restaurant adjoining the licensed premises. Farmer Bros. Co. v. Kiernan, (1957) Cal.App.2d 867.
23038.1. "Bona fide public eating place" continued. Notwithstanding the provisions of Section 23038, "bona fide public eating place" also means a convention center, exhibit hall, or auditorium, which shall hereinafter be referred to as "premises," owned by or leased to the State of California, any incorporated city, county, city and county, or public corporation of the State of California which is regularly and in a bona fide manner used and kept open for the attendance of groups of guests, and in connection with such use serves meals to such groups of guests for compensation, and which has suitable kitchen facilities in connection therewith, such kitchen containing conveniences for preparation of ordinary meals and maintained in a sanitary condition with proper refrigeration for the keeping of food on the premises in compliance with all regulations of the local department of health.
"Meals," as used in this section, means foods commonly ordered at a lunch or dinner; provided, however, that the service of food such as sandwiches or salads only shall not be deemed compliance with this requirement.
"Groups of guests," as used in this section, means persons who come to the premises owned or leased as provided herein, to make use of such premises for the purpose or purposes for which it was designed, and in connection with such use may, as a group, order in advance and obtain or be served a meal therein.
"Convention center" as used in this section, means a building or group of buildings in close physical proximity consisting of, but not necessarily limited to, a convention hall, exhibit hall, auditorium, or theater, or any combination thereof, and used for the purpose, among other things, of providing facilities for conventions, theatrical productions, shows, sporting centers, exhibits, displays, conferences or meetings.
Nothing in this section shall be construed to require that meals be served every day that use is made of the premises or any part thereof. However, meals shall actually be available to groups of guests in good faith upon adequate notice and request to the operators of such premises on any day of any year that such premises are used by such groups of guests, and shall be served to groups of guests as heretofore provided on at least 25 percent of the total days each year that the premises are used by said groups of guests.
Nothing in this section shall be construed to require that any food be sold or purchased with any alcoholic beverage.
History.—Added by Stats. 1968, p. 1640, in effect November 13, 1968.
23038.2. "Bona fide eating place" continued. Notwithstanding the provisions of Section 23038, for purposes of issuing an on-sale beer and wine license only, "bona fide public eating place" also means a ball park, stadium, or coliseum featuring professional sporting events which maintains suitable kitchen facilities for the preparation of food which is offered for sale to persons attending such professional sporting events.
The Department of Alcoholic Beverage Control may prescribe specific types and sizes of beer and wine containers which may be sold pursuant to the provisions of this section.
History.—Added by Stats. 1976, Ch. 561, in effect January 1, 1977. Stats. 1978, Ch. 270, effective January 1, 1979, deleted "which contains at least 40,000 seats and" following "sporting events" in the first paragraph.
23038.3. "Bona fide eating place" cooking school. Notwithstanding Section 23038, for purposes of issuing an on-sale beer and wine license only, "bona fide public eating place" also means a cooking school that regularly and in a bona fide manner provides courses of instruction in the preparation of food, and that maintains suitable kitchen facilities for the preparation of food that is offered to persons attending the courses of instruction.
History.—Added by Stats. 2011, Ch. 702 (SB 339), in effect January 1, 2012.
(1) Premises licensed with any type of license other than an on-sale beer license, and maintained and operated for the selling or serving of alcoholic beverages to the public for consumption on the premises, and in which food shall not be sold or served to the public as in a bona fide public eating place, but upon which premises food products may be sold or served incidentally to the sale or service of alcoholic beverages, in accordance with rules prescribed by the department.
(2) Premises licensed with an on-sale beer license, in which food shall not be sold or served to the public as in a bona fide public eating place, and in which sandwiches, salads, desserts, and similar short orders shall not be sold and served, in accordance with rules prescribed by the department.
(b) "Public premises" does not include railroad dining or club cars, passenger ships, airplanes, or bona fide clubs after the clubs have been lawfully operated for not less than one year; nor does it include historic units of the state park system, premises being operated under a temporary on-sale beer license other than permitted pursuant to Section 24045.5, or on-sale beer licensed stadia, auditoria, fairgrounds, or racetracks; nor does it include nonprofit theater companies licensed pursuant to Section 24045.7; nor does it include winegrowers' premises.
History.—Stats. 1955, p. 3285, in effect September 7, 1955, operative January 1, 1957, upon adoption of an amendment to Section 22, Article XX, California Constitution, substituted present provisions for former provisions defining public bar, public saloon, and public barroom. Stats. 1967, p. 3104, in effect November 8, 1967, divided section into subdivisions, added "licensed with any type of license other than an on-sale beer license and" in first two lines of (a)(1), added (a)(2), and revised (b). Stats. 1968, p. 2009, in effect November 13, 1968, revised (b), adding "historic units of the state park system" and "or on-sale beer licensed". Stats. 1984, Ch. 399, as amended by Stats. 1979, Ch. 487, Sec. 1, effective July 11, 1984, substituted "the" for "such" before "clubs" in (b), added "nor does it . . . Section 24045.7" at end of (b). Stats. 2008, Ch. 508 (AB 3071), in effect January 1, 2009, added "; nor does it include winegrowers' premises" after "licensed pursuant to Section 24045.7" to subdivision (b).
23039.1. Admission of minors to cabaret theater. Notwithstanding any other provision of law, any on-sale beer and wine public premises licensee who has been licensed at premises operated as a cabaret theater for at least 10 years and which has a seating capacity for at least 375 patrons may admit persons under the age of 21 years to theater performances provided that alcoholic beverages are not sold, served, or consumed on the premises during those performances.
History.—Added by Stats 1987, Ch. 869, in effect September 21, 1987. Stats. 2008, Ch. 18 (AB 23), in effect June 2, 2008, substituted "theater performances" for "matinee theater performances on Sunday" after "21 years to".
History.—Stats. 1955, p. 897, in effect September 7, 1955, added the clause following "Equalization."
History.—Stats. 1955, p. 898, in effect September 7, 1955, substituted the definition of "Department" in place of the former definition of "State Liquor Administrator."
History.—Stats. 1955, p. 898, in effect September 7, 1955, substituted "department" for "board."
History.—Added by Stats. 1955, p. 898, in effect September 7, 1955.
23046. "Air common carrier." "Air common carrier" means a person engaged in regularly scheduled air transportation between fixed termini under a certificate of public convenience and necessity issued by the Civil Aeronautics Board, or its successor, or the Public Utilities Commission, or its successor, and "airplane" or "common carrier airplane" means an airplane operated in air transportation by an air common carrier.
History.—Added by Stats. 1955, p. 1840, in effect September 7, 1955. Stats. 1957, p. 594, in effect September 11, 1957, renumbered this section which was formerly numbered 23045. Stats. 1968, p. 1296, in effect November 13, 1968, added "or its successor, or the Public Utilities Commission, or its successor".
History.—Added by Stats. 1955, p. 1840, in effect September 7, 1955. Stats. 1957, p. 595, in effect September 11, 1957, renumbered this section which was formerly numbered 23046.