Did RR 94-5 permit a retailer to pay a beer or wine wholesaler electronically after delivery?

Plain-English summary

South Carolina Revenue Ruling 94-5 rejected a proposed electronic-payment system for retailers buying beer or wine from wholesalers.

The historical statute required wholesale beer and wine sales to retailers to be for cash at or before delivery, defining cash as money, a bona fide check, or a money order.

Under the proposed system, the delivery driver would collect only a signed invoice. The distributor would enter the day's deliveries later, and the Federal Reserve would then debit the retailer and credit the distributor. Because the transfer occurred after delivery, the ruling found that the program did not satisfy the statute.

Common questions

Q: Was a signed invoice enough payment at delivery? No.

Q: Why did the electronic system fail? The actual account debit and credit occurred only after the day's delivery information was entered.

Q: What payment forms did the ruling's statute recognize? Money, a bona fide check, or a money order, provided at or before delivery.

Citations and references

• S.C. Code Ann. § 61-9-30 (historical cash-at-delivery requirement)
• Duke Power Co. v. South Carolina Tax Commission, 292 S.C. 64, 354 S.E.2d 902 (1987)
• Beaty v. Richardson, 56 S.C. 173, 34 S.E. 73 (1899)

Subject

Electronic Payment for Beer and Wine Purchases from Wholesalers

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/RR94-5.pdf

Original ruling text

SC REVENUE RULING #94-5 (ABC)

SUBJECT:

Electronic Payment for Beer and Wine Purchases from Wholesalers.
(ABC Laws)

EFFECTIVE DATE:

Applies to all periods open under the statute.

SUPERSEDES:

All previous documents and any oral directives in conflict herewith.

REFERENCES:

S.C. Code Ann. Section 61-9-30 (1976)

AUTHORITY:

S.C. Code Ann. Section 12-4-320 (Supp. 1993)
SC Revenue Procedure #94-1

SCOPE:

A Revenue Ruling is the Department of Revenue's official advisory
opinion of how laws administered by the Department are to be applied to
a specific issue or a specific set of facts, and is provided as guidance for
all persons or a particular group. It is valid and remains in effect until
superseded or modified by a change in the statute or regulations or a
subsequent court decision, Revenue Ruling or Revenue Procedure.

Question:
Do the provisions of Code Section 61-9-30 permit the utilization by retailers of an electronic
payment program, as described in the facts, to pay for their purchases of beer from wholesalers?
Conclusion:
Electronic payment programs, as described in the facts, are not permissible under the provisions of
Code Section 61-9-30 since payment is not made prior to or at the time of delivery of the beer to the
retailer.
Facts:
Questions have arisen recently concerning the validity under South Carolina law of a proposed
electronic payment program known as the "Electronic Beer Payment Program" ("EBP Program").
Currently, at the time of delivery, the retailer pays the distributor by check, money order, or cash for
the beer or wine received.

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The proposed EBP Program would eliminate the exchange of a physical payment instrument (check,
money order) or cash at the time of delivery. Instead of a check, money order or cash, the
distributor's driver would collect a signed copy of the invoice. At the end of the day, the information
regarding the day's deliveries would be entered into the distributor's computer. The computer would
read the day's transactions and produce an extract file of payments that are due to be made via the
EBP Program. In accordance with the instructions on the electronic file, the Federal Reserve would
debit each retailer's account and credit the distributor's account.
Discussion:
Code Section 61-9-30 states, in part:
All beer or wine sold by wholesalers to the holders of retail licenses in this State shall
be sold for cash only at the time of delivery or prior thereto. Cash shall mean money or a
bona fide check or money order.
Where the words of a statute are clear there is no room for construction and such terms must be
given their literal meaning. Duke Power Co. v. South Carolina Tax Commission, 292 S.C. 64, 354
S.E.2d 902 (1987).
In addition, in Beaty v. Richardson, 56 S.C. 173, 180, 34 S.E. 73, 76 (1899), the Court stated the rule
as follows:
The legislature must have intended to mean what it has plainly expressed, and consequently
there is no room for construction. Where the words of a statute are plainly expressive of an
intent, not rendered dubious by the context, the interpretation must conform to and carry out
that intent. It matters not, in such a case, what the consequences may be.
Therefore, the electronic beer payment program is not permissible under Code Section 61-9-30 since
payment is not made prior to or at the time of delivery of the beer to the retailer as required by the
statute. Payment, as stated in the facts, is not made until the end of the day when the information
regarding the day's deliveries is entered into the distributor's computer and the money is transferred
electronically.

SOUTH CAROLINA DEPARTMENT OF REVENUE

Columbia, South Carolina
March 23
, 1994
For questions concerning the issues addressed in this ruling, contact Nicholas Sipe at (803) 7340478.

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