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Should I Pay This Invoice for a Privilege Tax?
Published: Oct 16, 2026
It is that time of year again. Tennessee cities are sending notices asking for payment of the $100 privilege tax for beer permits.
Yes, you should pay the $100 privilege tax for your beer permit.
Attached is an example of the email being sent by Nashville. We expect that Chattanooga, Knoxville, Memphis, and other Tennessee cities will be sending similar notices in the next few weeks.
Most cities consider the privilege tax for beer permits to be due at the end of the year.
The privilege tax is the annual license fee for beer permits. Beer permits cost $100 per year per permit. Legally, beer permits cannot be renewed, so cities charge a privilege tax instead of a renewal beer permit fee.
Same thing, right? It costs $100 for the beer permit.
Reminds us of the classic Gershwin duet performed by Fred Astaire and Ginger Rogers:
You like potato and I like potahto,
You like tomato and I like tomahto,
Potato, potahto, tomato, tomahto!
Let's call the whole thing off!
We prefer the Louis Armstrong and Ella Fitzgerald duet. But we digress…
Many cities require businesses to file documentation on an annual basis to renew the beer permit. Chattanooga recently eliminated the additional paperwork. Your Tennessee alcohol beverage attorney blogged about it here at Last Call.
Tennessee cities also send a privilege tax for liquor by the drink licenses.
If your business holds a restaurant, hotel, or other liquor license, you probably receive an annual notice requiring payment of a few hundred or a few thousand dollars to the city for the “privilege” of holding a liquor license. The privilege tax is sometimes called a “liquor-by-the-ounce permit.”
State law prohibits cities from requiring a local liquor license. The privilege tax is a way for cities to impose an additional tax on businesses that hold a liquor-by-the-drink license.
It is a tax. Pay it and move on.
Notices of the liquor license privilege tax are generally sent around the time that your liquor license is due for renewal with the Tennessee ABC.
