KRS 243.155: Small farm winery license -- Eligibility and application process -- Business

authorized by license -- Direct shipment of wine -- Self-distribution -- Custom

crushing services -- Off-premises retail sales outlet in wet territory -- Other

permitted licenses -- Renewal of license -- Sampling by employees.

(1) A small farm winery may apply for a small farm winery license. In addition to all

other licensing requirements, an applicant for a small farm winery license shall

submit with its application a c opy of the small farm winery's federal basic permit

and proof documenting its annual wine production. The board shall promulgate

administrative regulations establishing the form the documentation of proof of

production shall take.

(2) A small farm winery l icense shall authorize the licensee to perform the following

functions without having to obtain separate licenses, except that each small farm

winery off-premises retail site shall be separately licensed:

(a) Engage in the business of a winery under the te rms and conditions of KRS

243.120 and 243.130, except that a small farm winery may sell and deliver

wine produced by it to a retailer as authorized by this section. The

manufacture of wine at the small farm winery shall not be less than two

hundred fifty ( 250) gallons, and shall not exceed five hundred thousand

(500,000) gallons, in one (1) year;

(b) Bottle wines produced by that small farm winery and other licensed small

farm wineries;

(c) Enter into an agreement with another licensed small farm winery und er which

it crushes, processes, ferments, bottles, or any combination of these services,

the grapes, fruits, or other agricultural products of the other small farm winery

for a production year. The resulting wine shall be considered the product of

the smal l farm winery that provides the fruit. The small farm winery

providing the custom crushing services may exclude the wine produced under

this paragraph from its annual production gallonage;

(d) If the licensed small farm winery or off-premises retail site premises is located

in wet territory or in a precinct that has authorized alcoholic beverage sales by

the small farm winery under KRS 242.124:

1. Serve complimentary samples of wine produced by it in amounts not to

exceed six (6) ounces per patron per day; and

2. Sell by the drink for on -premises consumption or off -premises

consumption pursuant to KRS 243.081, or by the package wine

produced by it or by another licensed small farm winery, at retail to

consumers;

(e) Sell by the drink or by the package, at fairs, festivals, and other similar types

of events, wine produced by it or by another licensed small farm winery, at

retail to consumers if all sales occur in a wet territory;

(f) Sell and transport wine produced by it to consumers, licensed small farm

winery off -premises retail sites, wholesale license holders, and small farm

winery license holders, except that wine purchased between small farm

wineries shall not exceed five hundred (500) gallons per year per small farm

winery;

(g) Consume on the premises wine produced by the small farm winery or a

licensed small farm winery and purchased by the drink or by the package at

the licensed premises, if the small farm winery is located in wet territory;

(h) Sell wine at re tail to consumers in accordance with KRS 243.027 to 243.029

if it holds a direct shipper license; and

(i) Sell and deliver, in accordance with KRS 243.120(1), up to twelve thousand

(12,000) gallons of wine produced by it annually to any retail license hold er

as long as:

1. Any products sold and delivered under this paragraph that are not

otherwise registered by a licensed wholesaler shall be registered with the

department by the small farm winery;

2. The small farm winery is responsible for payment of wine wholesale

sales taxes and reporting of self -distributed wines in accordance with

KRS 243.884; and

3. The small farm winery may extend credit on wine sold to retail licensees

for a period not to exceed thirty (30) days from the date of invoice, with

the date of invoice included in the total number of days.

This paragraph shall not apply to small farm winery wholesalers licensed

under KRS 243.154.

(3) If the requirements of KRS 242.1241 or 244.290(5) relating to Sunday sales on the

licensed premises of a sma ll farm winery are met, a small farm winery within that

territory may sell alcoholic beverages on Sunday only in accordance with this

section during the hours and times as permitted in the local ordinance for that

locality.

(4) A small farm winery license holder may also hold an NQ2 retail drink license or an

NQ4 retail malt beverage drink license if:

(a) The small farm winery is located in wet territory or in a precinct that has

authorized alcoholic beverage sales by the small farm winery under KRS

242.124; and

(b) The issuance of these licenses is in connection with the establishment and

operation of a restaurant, hotel, inn, bed and breakfast, conference center, or

any similar business enterprise designed to promote viticulture, enology, and

tourism.

(5) This section shall not exempt the holder of a small farm winery license from the

provisions of KRS Chapters 241 to 244, nor from the administrative regulations of

the board, nor from regulation by the board at all premises licensed by the small

farm winery, except as expressly stated in this section.

(6) Nothing contained in this section shall exempt a licensed out -of-state winery from

obeying the laws of its resident state.

(7) Upon the approval of the department, a small farm winery license may be renewed

after the licensee submits to the department the winery's federal basic permit and

proof of its annual wine production.

(8) An employee of a small farm winery may sample the products produced by that

small farm winery for purposes of education, quality co ntrol, and product

development.