The Texas Alcoholic Beverage Commission (formerly the Texas Liquor Control Board) was created in 1935.
The Texas Alcoholic Beverage Commission (TABC) is the state agency that regulates all phases of the alcoholic beverage industry in Texas. The duties of the commission include regulating sales, taxation, importation, manufacturing, transporting, and advertising of alcoholic beverages.
The TABC collects in excess of $300 million annually in taxes and fees, which aids in the financing of the state’s public schools, local governments, research, human services, and other areas in which state government provides services to all Texans.
The Alcoholic Beverage Code authorizes the Texas Alcoholic Beverage Commission to:
- Grant, refuse, suspend, or cancel permits and licenses in all phases of the alcoholic beverage industry;
- Supervise, inspect, and regulate the manufacturing, importation, exportation, transportation, sale, storage, distribution, and possession of alcoholic beverages;
- Assess and collect fees and taxes;
- Investigate for violations of the Alcoholic Beverage Code and assist in the prosecution of violators;
- Seize illicit beverages;
- Adopt standards of quality and approve labels and size of containers for all alcoholic beverages sold in Texas;
- Pass rules to assist the agency in all of the above.
The 21st Amendment, which signaled repeal of national prohibition in the 1930’s, allows each state to control the importation and use of alcoholic beverages within its boundaries. This is probably the only remaining right guaranteed more or less exclusively to the states.
The Texas Alcoholic Beverage Code was enacted to protect against involvement of the criminal element in alcoholic beverage trafficking. The legislature has very strictly prohibited persons who have been convicted of certain crimes from obtaining licenses or permits. Also prohibited are “tied house” violations where ownership overlaps the three marketing levels (manufacturing, wholesaling and retailing) in the alcoholic beverage industry.
The separation of marketing levels is closely scrutinized. TABC employees review all shipments of alcoholic beverages into Texas, as well as any transfer of merchandise between wholesalers. Background investigations and other research are undertaken when a person applies for a permit or license to operate in some phase of the industry. Efforts are made to detect ownership by others involved at different levels, as well as those factors which could tend to disqualify an applicant, such as previous criminal history or indebtedness to the state for taxes.
