Could a business offer brew-on-premises beer making or a home winemakers’ center in South Carolina?

Plain-English summary

In 2012, the South Carolina Attorney General concluded that a proprietor of a brew-on-premises facility or home winemakers' center would need a permit from the Department of Revenue (DOR) before operating. The AG treated a customer beer-making site as a brewery under state law even if the site did not sell beer. It reached the same view for a home winemakers' center as a winery. The opinion gave weight to a DOR advisory opinion on brew-on-premises operations and DOR's statutory authority over beer and wine.

The AG did not decide whether a particular proposed facility would receive a permit. It said that determination depended on the facility's actual operations and belonged to DOR. It also left detailed federal guidance to the federal Alcohol and Tobacco Tax and Trade Bureau. The opinion found no state regulation specifically governing brew-on-premises or home winemaking centers as such, and suggested contacting DOR's Alcohol Beverage Licensing unit about the applicable permit.

Currency note

This opinion was issued in 2012. Subsequent statutory amendments, court decisions, or later
AG opinions may have changed the analysis. Treat this page as historical context, not current
legal advice. Verify current law before relying on any specific rule, deadline, or remedy
mentioned here.

Common questions

Did a customer beer-making site need a permit if it sold no beer? A: The AG said DOR had treated such a site as a brewery in its advisory opinion and concluded a proprietor would need a DOR permit before operating.

Did the AG reach the same result for a home winemakers' center? A: Yes. It read “winery” in its ordinary sense and believed a center offering space and equipment for customers to make wine needed a DOR permit.

Which state agency regulated the facilities?
A: The opinion identified DOR as the agency with authority over beer and wine and deferred to it on a particular permit application.

Did federal permission for personal beer or wine making settle the state permit question? A: No. The AG discussed federal personal-use rules but separately analyzed South Carolina licensing. It directed detailed federal questions to the federal bureau.

Did the opinion decide the license for a specific business model? A: No. The AG said the facts of a particular operation were outside the scope of the opinion and DOR would decide whether to issue a permit.

Background and statutory framework

Representative William Herbkersman asked whether a proprietor could operate these facilities and which state agency would regulate them. The AG reviewed federal personal-use guidance, South Carolina's beer and wine laws, and DOR's prior advisory interpretation of “brewery.” It concluded that state permitting applied generally while leaving individual operational facts to DOR.

Citations and references

The opinion discusses state beer and wine permitting and federal personal-use exemptions. Its source PDF contains the full statutory analysis.

Official title

Concerning whether a proprietor may operate a brew-on premises facility or home winemakers’ center in South Carolina.

Requester

The Honorable William G. Herbkersman, Member, House of Representatives

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/january-6-2012-1/
• Original PDF: https://www.scag.gov/wp-content/uploads/2013/01/herbkersman-w-g-os-9362-1-6-12-brew-on-premises-facilities-wine-beer.pdf

Original opinion text

ALANWlLSON

A TIORNEY GENERAL

January 6, 2012

The Honorable William G. Herbkersman
Member, House of Representatives
434-B Blatt Building
Columbia, SC 29211
Dear Representative Herbkersman:
Jn a letter to this office you have requested an opinion concerning whether a proprietor may operate a brew-on premises facility or home winemakers' center in South Carolina. You have also asked us which State agency would regulate such a facility. Law/Analysis As you note in your letter, the United States Department of the Treasury, Alcohol and Tobacco Tax and Trade Bureau (the "TTB") has addressed home winemakers' centers and brew-on-premises facilities. Specifically, federal law allows consumers to make their own beer and wine for personal use. See 26 U.S.C. §§ 5051 (c) (2), 5053 (e) [exempting beer produced by adults "for personal or family use and not for sale"]; 26 U.S.C. §5042 (a) (2) [exempting wine produced by adults "for personal or family use and not for sale"]. We note the TTB has expressly recognized a wide array of activities that the brewon-premises business or home winemakers' center may undertake. For detailed information about the applicability of federal guidelines to a particular operation of a brew-on-premises facility or home winemakers' center, you should address your inquiries to the TTB. TTB's "Beer" guidelines and "Frequently Asked Questions'' ("FAQs") 1 for brew-on-premises facilities which are not TTB-qualified breweries provide that:
[p]roprietors ... of "Brew-on-Premises" facilities may: furnish space, brewing equipment, ingredients, bottling supplies, and advice and expertise to consumers. . . . They may also provide certain assistance to consumers including.. . . Cleaning, maintenance and repair of equipment, Climate and temperature control, Disposal of spent grain and waste, Quality control (including laboratory analysis and tasting ....)

1These FAQs are posted on the TTB website. The FAQs were last revised in 2003.

REMBERT

c. DENNIS BUILDING • P OST OFFICE Box ll549 • COLUMB IA, SC 2921 1- 1549 • T ELEPHONE 803-734-3970 • FACSIMlLE 803-251-6?R1

The Honorable William G. Herbkersman
Page2
January 6, 2012

Additionally:
[p]roprietors ... may not: [p]rovide assistance to, or on behalf of, customers in the production, storage, or packaging of beer .. . [or) (p]roduce or provide nontaxpaid beer to customers or prospective customers for sampling purposes . . . . Operation of a [brew-on-premises) business in a manner contrary to the [these guidelines] may cause the facility to be considered a brewery . . . The ITB guidelines and FAQs further provide that adults [i.e., persons at least twenty-one years of age] "home brewing" at a brew-on-premises facilities, subject to certain guidelines as to the quantity that can be produced, " ... may remove their beer for personal or family use, including use in organized affairs, exhibitions, or competitions (such as homemaker's contests or tastings); . . . may collaborate with other adults in the production of beer at a [brew-on-premises facility] provided they are not considered a corporation or an association; and ... may not produce beer for sale or offer their beer for sale." See 27 C.F.R. §§25.205 through 25.207. The 1TB advises that adults using these facilities "should note that owners and employees of [brew-on-premises facilities] are limited in the assistance they may provide customers [and that] [i]t is the responsibility of [brew-on-premises] customers to carry out the activities that are required to brew, store, and package beer." As for home winemakers' centers, ITB's "Wine" guidelines and FAQs essentially mirror those for brew-on-premises facilities. See 27 C.F.R. §24.75. Additionally, the 1TB states that these home winemakers' centers "must never 'cross the line' to commercial production or sale of wine." Significantly, we note the TTB states in its "Beer" FAQs that "[p]roprietors of [brew-on-premises facilities) must opera~e the [brew-on-premises facility] in compliance with State and local laws. The provision to produce beer for personal or family use and without payment of a tax at a [brew-on-premises facility] under [the above Codes] does not authorize production of beer by adults, or operation of a [brewon-premises] business, in violation of any State or local law." The TIB' s "Wine" FAQs similarly provide that the operator of a home winemakers' center "must learn and comply with any permit, license or tax requirements of State and local law and conduct operations in compliance with State and local law." Additionally, the TTB states: ..[i]f State and local rules impose different requirements or limitations than the federal rules . . ., the stricter rules and limits should be applied." The TIE guidelines thus do not authorize the production of beer or wine that is contrary to State or local law. The ITB therefore directs operators to contact their individual States' alcohol control boards to assure compliance with State and local laws. With this caveat in mind, we note that South Carolina law regulating beer and wine is located in Chapter 4 of Title 61 of the South Carolina Code. Generally, pursuant to S.C. Code Ann. §61-2-80:
[t]he State, through the (South Carolina Department of Revenue (the "DOR")), is the sole and exclusive authority empowered to regulate the operation of all locations authorized to sell beer, wine, or alcoholic liquors, is authorized to establish conditions or restrictions which the department considers necessary before issuing or renewing a license or pennit, and occupies the entire field of beer, wine, and liquor regulation except as it relates to hours of operation more restrictive than those set forth in this title.

The Honorable William G . Herbkersman
Page 3
January 6, 2012

Clearly, the DOR is charged with the authority to regulate and enforce provisions of the South Carolina Code dealing with beer and wine. See also §61-4-70 [the DOR "has sole and exclusive power to issue all licenses, permits, and certificates" authorizing the sale of beer, wine, or liquor]. We were unable to find statutes or regulations which specifically address brew-on-premises facilities or home winemakers' centers in South Carolina. We note, however, that the DOR issued a 1995 advisory opinion considering brew-on-premises operations in which businesses sell beer ingredients, and rent the equipment and space necessary to the public to brew and bottle their own beer for personal consumption. These businesses would also provide technical expertise and advice during the brewing and bottling process. The operators of these businesses would neither brew beer for sale to the public nor to other businesses. Addressing this type of business, the DOR acknowledged "[t]here is no law prohibiting brew-on-premises operations in South Carolina." S.C. Revenue Ruling #95-3 (1995). In rendering its 2 advisory opinion, the DOR considered §61-4-1510 (formerly §61-9-1220), which states:
[b]efore a person constructs, maintains, or operates a brewery or winery as provided by the provisions of this article, the person must apply to the [DOR] for a permit. The application must be in writing in a form the [DOR] prescribes. Except as otherwise provided in this section, the applicant must pay a biennial permit tax of two hundred dollars upon each brewery and on each commercial winery to be established and operated. The pennit tax must be paid to and collected by the [DOR] before a pennit is issued. Permits as provided by the provisions of this section expire as mandated by Section 61-2-120. No refund may be made to a dealer who ceases business after obtaining a pennit. The DOR continued by noting §61-4-1530 (fonncrly §61-9-1250) provides that: "[a] person who operates

a brewery or winery without a pennit or after his permit has been canceled by the [DOR] is guilty of a misdemeanor .. ." Further in the advisory opinion, the DOR noted that the term "brewery" was not defined in the South Carolina Code. However, it referred to The Second College Edition of the American Heritage Dictionary, p. 207, which defines "brewery" as "an establishment for the manufacture of malt liquors." We note that Webster's New World Dictionary, p. 176, defines "brewery" as "an establishment where beer, ale, etc. are brewed" SA Words & Phrases, p. 341, states: "[a] brewery is a building and its appurtenances especially adapted to the manufacture of beer!' [citing Mugler v. Kansas, 123 U.S. 623 (1887)). Where the Legislature chooses not to define a tenn in a statute, courts will interpret the tenn in accordance with its usual and customary meaning. Adoptive Parents v. Biological Parents, 315 S.C. 535, 446 S.E.2d 404 (1994); City of Camden v. Brassell, 326 S.C. 556, 486 S.E.2d 492 (Ct. App. 1997). As this office has consistently noted:

2chapter 9 of Title 61 was amended by 1996 S.C. A cts No. 415, § 1.

The Honorable William G. Herbkersman
Page4
January 6, 2012

[o]ne of the primary rules in the construction of a statute is that the words used therein should be taken in their ordinary and popular significance unless there is something in the statute requiring a different interpretation. Brewer v. Brewer, 242 S.C. 9, 129 S.E.2d 736 (1963). It is a well-settled principle of law that "[c]onstruction of a statute by the agency charged with executing it is entitled to most respectful consideration and should not be overruled without cogent reasons." Logan & Associates v. Leatherman, 290 S.C. 400, 403, 351 S.E.2d 146, 148 (1986). Ops. S.C. Attv. Gen., December 6, 2010; March 25, 1985. The DOR stated in its advisory opinion that, "even though the brew-on-premises operation will not be selling beer, it will be operating a brewery . .."The DOR thus concluded that, pursuant to §61-41510, "a permit must be obtained from the [DOR] before initiating construction of the brewery [and] operators of the [brew-on-premises] facility must maintain a permit the entire time the business is in operation.,,3 Although not binding, a court, as well as this office, will generally give great deference to the opinion of a state agency's interpretation of a statute of which it is charged with the duty and responsibility of enforcing. Brown v. Bi-Lo, Inc., 354 S.C. 436, 581 S.E.2d 836 {2003); Georgia-Carolina Bail Bonds. Inc. v. County of Aiken, 354 S.C. 18, 26, 579 S.E.2d 334 (Ct. App. 2003). Furthermore, "in our opinions, we do not second-guess an agency's policy decisions and interpretations of its own enabling statutes; we generally will leave such review to the courts." Ops. S.C. Attv. Gen., August 16, 2006; September 8, 2005. Accordingly, we give great deference to the DOR's int.erpretation of the term "brewery" in its advisory opinion as it applies to the issuance of permits for brew-on-premises facilities. We find no compelling reason to deviate from DOR's interpretation in the 1995 advisory opinion. Similarly, we note that home winemakers' centers typically are places where individuals pay fees to use space and equipment to make wine for personal use. Wine is not sold to the public or other businesses. As with the term " brewery," a "winery" is not define~ in the South Carolina Code, but we note that §61 -4-1500 relates the tenn "winery" as being a place for the production of beverages (wines). In The Second College Edition of the American Heritage Dictionary, p. 1384, "winery" is defined as "[a] winemaking operation." Webster's New World Dictionary, p. 1630, defines "winery" as " an establishment where wine is made." See also Op. S.C. Atty. Gen., September 13, 1977 [using the term winery in its ordinary sense, we opined that a "warehouse" used only for storage after the production of wine would not qualify as a ''winery" and would thus not have to be licensed as such]. Utilizing the term ''winery" in its ordinary sense, we believe that a home winemakers' center would be operating a winery under South Carolina law, and that a home winemakers' center would also to be subject to the DOR's pennit requirements.

3Tbe DOR also discussed in its advisory opinion whether a brew-on-premises operation would be subject to taxes imposed under §§12-2 1-1020 through 12-21-1030. However, the application of tax provisions is beyond the scope of your opinion request.

The Honorable William G. Herbkersman
Page 5
January 6, 2012

Conclusion

The DOR is given exclusive authority to regulate beer and wine, including the operation of a brewery or winery, in this State. Giving great weight to the DOR's interpretation of South Carolina law in its 1995 advisory opinion, and based on our own analysis of the applicable law, we believe that a propri tor of a brew-on-premises facility or a home winemakers' center would be required to obtain a permit from the DOR prior to operating such a facility. However, we are unable to address the operation of any particular brew-on-premises facility or home winemakers' center, because to do so would require us to evaluate and determine factual issues regarding the operation of an individual facility, which is beyond the scope of an opinion of this office. See Op. S.C. Atty. Gen., April 6, 2006 ("[T]he investigation and determination of facts are matters beyond the scope of an opinion of this office"). This office is only able to provide an interpretation of relevant law. We were unable to find any State regulations governing brew-on-premises facilities or home winemakers' centers per se. Cf. TTB's FAQs.4 However, given the significant regulatory authority that has been given to the DOR regarding the administration of provisions of the South Carolina Code dealing with beer and wine, we suggest a proprietor contact the DOR (Alcohol Beverage Licensing) regarding pennit requirements for the operation of such a facility. 5 We believe th DOR to be in the best position to make a determination of whether or not to issue a permit based upon the operation of a particular facility.' This office will defer to the DOR in this regard. See Qn,. S.C. Atty. Gen., September 8, 2005 ("[I]t has been our longstanding policy in the issuance of opinions to defer to the administrative agency charged with the enforcement of a particular area of law''). If you have any further questions, please advise. Very truly yours,

N. Mark Rapoport
Senior Assistant Attorne; General

REVIEWED AND APPROVED BY:

;; ',.{·.-z.l ·t . . .

G"" '

/

: • ..._ -,,..-

,~ \ ~ .Lb· ~-..._~
Robert D. Cook
"'
Deputy Attorney General

1/\JL

"In addition to the ITB's guidelines referenced above, we fowid at least two states with regulations addressing br!w-on-premises facilities. Sec 804 Ky. Admin. Regs. 4:340; R.I. Code R. 11-4-14:1.

swe contacted the DOR and were informed that the operator of a brewery or winery is required to submit a Form ABL-902 application for an in-state brewery or winery. See §§61-2-90, -100. 6

We were also informed that a proprietor may request a formal opinion from the DOR' s Office of General Counsel regarding the operation of a particular brew-on-premises facility or home winemakers' center.