What a “Death Penalty” Sanction Is, and How a Single Sale Can Cost a Business Its Permit

Published Read 3 min read

On this page

The “death penalty” is cancellation of the license or permit. The Alcoholic Beverage Code puts cancellation within reach on a first offense for a sale to a minor: under Section 106.13, TABC may cancel a retail license or permit, or suspend it for up to 90 days, when the holder with criminal negligence sold or served alcohol to a minor. For that violation the business also has no automatic right to pay a fine instead of a suspension, and a sale that causes a death or serious bodily injury goes straight to TABC’s legal division with no settlement offer.

The statute for sales to minors

Section 106.13 of the Alcoholic Beverage Code applies to retail licenses and permits and private club registration permits:

Offense What TABC may do
First cancel, or suspend for up to 90 days
Second cancel, or suspend for up to six months
Third within 36 consecutive months cancel, or suspend for up to 12 months

The trigger is a finding, after notice and a hearing, that the licensee or permittee with criminal negligence sold, served, dispensed, or delivered alcohol to a minor, or with criminal negligence permitted a minor to consume or possess alcohol on the premises in violation of Sections 106.04 or 106.05.

Why the usual cushions are thinner here

  • No automatic fine option. For most violations, Section 11.64 requires TABC to let the business pay a civil penalty instead of serving a suspension. Sales to minors and to intoxicated persons are on the list of exceptions, so TABC decides whether to offer that option at all.
  • No settlement track for the worst outcomes. Under TABC Rule 34.1(e), a case alleging a sale to a minor or an intoxicated person that directly or indirectly caused death or serious bodily injury is referred straight to TABC’s legal services division, without an offer of settlement or compromise.
  • Priority inspections. A public safety violation also puts the business on TABC’s priority list for additional inspections over the following six months.

Sales to intoxicated customers

A sale to an intoxicated person falls outside Section 106.13, but it carries the same kind of single-incident risk. It is a ground for suspension of up to 60 days or cancellation under Section 11.61(b), it is on the same Section 11.64 list that removes the automatic fine option, and it triggers the same direct referral when the sale leads to a death or serious bodily injury.

What can keep a single sale from reaching the permit

Two protections exist in the Code, and both depend on what the business did before the sale: the safe harbor in Section 106.14, which keeps an employee’s sale from being attributed to an employer that required TABC-approved seller training, whose employee completed it, and that did not encourage the violation, and Section 106.13(c), which allows a lighter sanction where the business shows the sale could not have been prevented with due diligence. Neither can be assembled after the fact. A criminal case against the employee who made the sale runs separately from the case against the permit.

Planning around the worst case

Treat every sale to a minor as a potential first-offense cancellation. The protection that counts, safe-harbor compliance and a record of due diligence, has to exist on the day of the sale: a written requirement that employees complete TABC-approved seller training, proof that the employee who made the sale completed it, and nothing that could be read as encouraging a violation.

This article is general information about Texas alcoholic beverage law, not legal advice, and reading it does not create an attorney-client relationship. Statutes and TABC rules change; confirm current requirements with the Texas Alcoholic Beverage Commission, the relevant city or county, or a licensed Texas attorney before acting.

Related posts:

  1. How does a business confirm a specific address is wet for its intended permit type before signing a lease? Ask the local clerks, in writing, before signing. TABC states that only the city or county clerk's office can officially declare a location wet or dry. For each permit, the......
  2. What Is a Brewpub License, and How Does It Let a Single Business Both Make and Sell Beer? A Brewpub License (BP) lets a bar or restaurant brew beer on its own premises and sell that beer to its customers there, for drinking on site or, as far......
  3. How Does the Comptroller Use Pour-Cost and Depletion Analysis to Estimate Unreported Sales? A depletion analysis starts from what a permittee bought, not what it reported. The Comptroller converts the liquor, beer, and wine purchased into drinks, prices those drinks, and compares the......
  4. How TABC’s Penalty Schedule Turns a Violation Into a Fine, Suspension, or Cancellation A TABC sanction is measured in days of suspension, up to 60 days for most permit violations, or cancellation. For most violations the Alcoholic Beverage Code requires TABC to let......
  5. What Hours-of-Sale Rules, Including Sunday Sales, Govern Different Permit Types? Texas sale hours depend on what is being sold and under which permit. Bars and restaurants serving mixed drinks may sell from 7 a.m. to midnight Monday through Saturday and......
  6. What Is the Safe Harbor Defense, and What Documentation Does a Business Need to Invoke It? Safe harbor protects a business's license or permit when an employee sells or serves alcohol to a minor or an intoxicated person. Under Section 106.14 of the Alcoholic Beverage Code,......
  7. What a Distance Variance Is, and When a Business Can Request One A distance variance is permission from a city or county to locate an alcohol business closer to a church, school, or public hospital than that government's own distance rule allows.......
  8. How Ownership of an Already-Licensed Alcohol Business Is Transferred or Changed A TABC license or permit cannot be sold or transferred to a new owner. When a business changes hands, TABC requires the buyer to apply for its own license or......
  9. What Is a Wine and Malt Beverage Retailer’s Permit, and How Does It Differ From a Mixed Beverage Permit? The Wine and Malt Beverage Retailer's Permit (BG) lets a business sell wine and beer of up to 17 percent alcohol for customers to drink on the premises or take......
  10. What Should a Written Alcohol Policy Contain to Protect a Permit Holder? A written alcohol policy protects a permit only if it covers the decisions that create violations, such as checking identification, recognizing and refusing intoxicated customers, and training staff, and if......
  11. What Is a Distiller’s and Rectifier’s Permit, and What On-Site Sales Are Texas Distilleries Allowed? Three kinds of on-site sales are open to a Texas distillery, and each has its own ceiling: samples of up to half an ounce; drinks for consumption at the distillery,......
  12. What Is an L-Cert (Certificate of Local Compliance), and Why Does TABC Require It Before Issuing a Permit? The L-Cert, also called the Certificate of Local Compliance, is TABC's Required Certifications form (Form L-CERT): the set of sign-offs that new license and permit applications carry. In it, the......
  13. Which TABC Permit Fits a Restaurant, and How Does the Alcohol-to-Food Sales Ratio Drive That Choice? Texas has no single restaurant permit. A restaurant that pours spirits needs a Mixed Beverage Permit (MB); one that serves only wine and beer can operate on a Wine and......
  14. What Is a Mixed Beverage Permit, and Which Texas Businesses Are Required to Hold One? The Mixed Beverage Permit (MB) is the Texas permit for selling distilled spirits by the drink. Under Section 28.01 of the Alcoholic Beverage Code, it lets the holder sell mixed......
  15. What Is a Private Club Registration Permit, and When Is It the Only Lawful Way to Serve Alcohol in an Area? A Private Club Registration Permit (N) lets a genuine members' club store alcoholic beverages that belong to its members and serve them to members, their families, and their guests. It......

Leave a comment

Your email address will not be published. Required fields are marked *