The Virginia General Assembly concluded its 2024 legislative session in March which included changes to Alcoholic Beverage Control (ABC) law and some changes to tobacco, vaping and electronic cigarette regulation. These changes should be of particular interest to alcohol and tobacco retailers, as there are numerous compliance requirements embedded in these new laws.
These laws were passed this year and, unless otherwise stated, took effect July 1, 2024. These are the summaries from the Virginia Legislative Information System. Since they are “summaries,” by definition, they leave some details out.
Below are the legislative summaries of these new laws.
Source: Virginia’s Legislative Information System
HB 57 (Wright) - Restaurant exemptions; certain organizations participating in fundraising events.
Summary as introduced:
Clarifies that the provision in current law that exempts certain organizations from provisions applicable to restaurants, including churches, fraternal or school organizations, organizations that are exempt from taxation under § 501(c)(3) of the Internal Revenue Code, and volunteer fire departments and volunteer emergency medical services agencies, applies when such organizations offer food for sale to the public as a participant in an occasional fundraising event, provided that certain conditions are met. Current law exempts such organizations from provisions applicable to restaurants when such organizations hold occasional fundraisers that offer food for sale to the public, provided that certain conditions are met.
HB 522 (Krizek) / SB 182 (Rouse) - Alcoholic beverage control; advertisements.
Summary as introduced:
Directs the Board of Directors of the Virginia Alcoholic Beverage Control Authority to promulgate regulations that prescribe the terms and conditions under which manufacturers, brokers, importers, and wholesalers may advertise and promote alcoholic beverages via the Internet, social media, direct-to-consumer electronic communication, or other electronic means.
HB 688 (Leftwich) / SB 635 (Rouse) - Alcoholic beverage control; sale and delivery of mixed beverages and pre-mixed wine for off-premises consumption; third-party delivery license; sunset; repeal.
Summary as introduced:
Repeals the July 1, 2024, sunset on provisions that allow (i) distillers that have been appointed as agents of the Board of Directors of the Virginia Alcoholic Beverage Control Authority, mixed beverage restaurant licensees, and limited mixed beverage restaurant licensees to sell mixed beverages for off-premises consumption and (ii) farm winery licensees to sell pre-mixed wine for off-premises consumption. The bill also repeals, effective July 1, 2026, third-party delivery licenses. The bill requires the Authority to convene a work group to review third-party delivery licenses and report its findings and recommendations to the Chairmen of the House Committee on General Laws and the Senate Committee on Rehabilitation and Social Services by November 15, 2024.
HB 790 (Hope) / SB 582 (Ebbin) Purchase, possession, and sale of retail tobacco products; retail tobacco products and liquid nicotine tax; penalties.
Summary as enacted with Governor's Recommendation: (all summaries)
Prohibits Internet sales of liquid nicotine or nicotine vapor products, except to a retail dealer, and prohibits the sale of retail tobacco products from vending machines. The bill updates, for the purpose of the crime of selling or distributing tobacco products to a person younger than 21 years of age, the definition of "retail tobacco products" by including in such definition products currently defined as "nicotine vapor products" or "alternative nicotine vapor products." The bill also removes provisions prohibiting the attempt to purchase, the purchase, or the possession of tobacco products by persons younger than 21 years of age.
The bill provides that the punishment of a retail dealer that sells, gives, or furnishes a tobacco product to a person younger than 21 years of age or to a person who does not demonstrate that such person is at least 21 years of age is (i) a civil penalty of $1,000 for a first offense within a 36-month period, (ii) a civil penalty of $5,000 for a second offense within a 36-month period such retail dealer shall become subject to specific age-verification requirements, (iii) a civil penalty of $10,000 and a 30-day suspension of such retail dealer's distributor's license for a third offense within a 36-month period, and (iv) revocation of such license and such retail dealer shall be ineligible to hold a license for a period of three years following the most recent violation for a fourth offense within a 36-month period. The bill requires the Department of Taxation, in collaboration with the Virginia Alcoholic Beverage Control Authority and local law enforcement, to conduct a compliance check every 24 months on any retail dealer selling retail tobacco products and to use a person younger than 21 years of age to conduct such checks.
The bill also imposes a tax upon liquid nicotine in closed systems, as defined in the bill, at the rate of $0.066 per milliliter and upon liquid nicotine in open systems, as defined in the bill, at the rate of 20 percent of the wholesale price for purchases on and after July 1, 2024. The bill applies licensing requirements to manufacturers, distributors, and retail dealers of liquid nicotine and creates new safety requirements related to the advertising, marketing, and labeling of liquid nicotine and nicotine vapor products.
HB 1069 (Willett) / SB 550 (Deeds) - Liquid nicotine and nicotine vapor products; certification and directory; penalties.
Summary as enacted with Governor's Recommendation: (all summaries)
Requires every manufacturer of liquid nicotine or nicotine vapor products that are sold for retail sale in the Commonwealth to certify to the Attorney General that (i) the manufacturer has received a marketing authorization or similar order for the liquid nicotine or nicotine vapor product from the U.S. Food and Drug Administration (FDA) or (ii) (a) the liquid nicotine or nicotine vapor product was marketed in the United States as of August 8, 2016, or (b) the manufacturer submitted a premarket tobacco product application for the liquid nicotine or nicotine vapor product to the FDA on or before September 9, 2020, and such application either remains under review by the FDA or a final decision on the application has not otherwise taken effect. The bill requires a manufacturer to submit such a form for each liquid nicotine or nicotine vapor product that such manufacturer sells for retail sale in the Commonwealth. Under the bill, any manufacturer that falsely represents any of the information required by the certification requirement is guilty of a Class 3 misdemeanor for each false representation.
The bill requires the Attorney General to establish and maintain a directory that lists all liquid nicotine or nicotine vapor product manufacturers and liquid nicotine and nicotine vapor products for which current and accurate certification forms have been submitted. The bill requires the Attorney General to remove or exclude from such directory any such product that is not in compliance and to notify the manufacturer of such noncompliance. The bill allows a 10-business-day period for a manufacturer to establish compliance. The bill requires that any such products that are removed from the list be sold or removed from retail sale within 30 days or become subject to seizure and requires a manufacturer, wholesaler, or retail dealer to notify each purchaser of a removed product that it has been removed from the directory at the time of delivery of such product. The bill entitles such a purchaser to a refund of the purchase price and creates a cause of action to recover such refund.
The bill prohibits the sale, distribution, importation, or offer for sale of any liquid nicotine or nicotine vapor product that is not listed in the directory. The bill provides for a civil penalty of $1,000 per day for each product offered for sale in violation of the bill's provisions until the offending product is removed from the market or until the offending product is properly listed on the directory.
The bill requires any person that receives, stores, sells, handles, or transports liquid nicotine or nicotine vapor products to preserve all records relating to the purchase, sale, exchange, receipt, or transportation of all liquid nicotine or nicotine vapor products for a period of three years. The bill provides that all such records are subject to audit or inspection at any time by any duly authorized representative of the Attorney General. Any person who violates the recordkeeping provisions of the bill is guilty of a Class 2 misdemeanor.
Additionally, the bill provides that the Department of Taxation, the Attorney General, any other law-enforcement agency of the Commonwealth, or any federal law-enforcement agency conducting a criminal investigation involving the trafficking of liquid nicotine or nicotine vapor products may access at any time such records. The bill requires the Department of Taxation to impose a penalty of $1,000 for each day that a person fails or refuses to allow or cooperate with an audit, inspection, or investigation of such records.
The bill authorizes any attorney for the Commonwealth, or the attorney for any city, county, or town to cause an action to enjoin any violation of the provisions of the bill. The circuit courts are authorized by the bill to (a) issue temporary or permanent injunctions to restrain and prevent violations of the provisions of the bill and (b) order forfeiture of any property seized for such a violation.
Under the bill, any retailer and wholesaler that sells or distributes any liquid nicotine or nicotine vapor product in the Commonwealth is subject to scheduled or unscheduled compliance checks carried out by the Attorney General, or an agent thereof, for enforcement purposes.
The bill requires the Attorney General to provide an annual report to the General Assembly regarding the status of the directory, manufacturers and products included in the directory, and revenues and expenditures related to and enforcement activities undertaken pursuant to the requirements of the bill.
Finally, the bill makes a violation of its provisions a prohibited practice under the Virginia Consumer Protection Act. This bill has a delayed effective date of July 1, 2025.
HB 1349 (Krizek) / SB 180 (DeSteph) / SB 400 (Deeds) / SB 657 (Reeves) / SB 724 (Stanley) Alcoholic beverage control; annual mixed beverage performing arts facility licenses; on-and-off premises wine and beer licenses.
Summary as passed House: (all summaries)
Defines performing arts facility and sports facility and standardizes the eligibility criteria for annual mixed beverage performing arts facility licenses and on-and-off-premises wine and beer licenses for performing arts food concessionaires. Under current law, the eligibility criteria for such licenses varies by location and includes inconsistent ownership, lease, capacity, and seating requirements. The bill also removes provisions that allow the Board of Directors of the Virginia Alcoholic Beverage Control Authority to grant annual mixed beverage motor sports facility licenses and motor car sporting event facility licenses and creates an annual mixed beverage sports facility license, which may be granted to persons operating a sports facility or food concessions at a sports facility and would authorize the licensee to sell mixed beverages during any event and immediately subsequent thereto to patrons within all seating areas, concourses, walkways, concession areas, and additional locations designated by the Board (i) in closed containers for off-premises consumption or (ii) in paper, plastic, or similar disposable containers or in single original metal cans for on-premises consumption.
