A provision buried in HB1652 bypasses Tennessee's standard food-revenue requirement for certain small venues—but only if you meet very specific criteria.
Most Tennessee restaurant owners assume the state's liquor-by-the-drink (LBD) licensing rules apply equally to everyone. They don't—not anymore.
Hidden in HB1652, signed into law on May 22, 2026, is a provision that creates statutory exemptions from Tennessee's food-revenue percentage threshold for at least 28 named small businesses. If your venue meets the hyper-specific geographic and physical criteria written into the bill, you can apply for an LBD license without proving you meet the standard food-revenue requirement.
Under current Tennessee law, most venues seeking a liquor-by-the-drink license must demonstrate that food sales represent a certain percentage of total revenue. This is a hard floor—you can't get the license without hitting that number.
HB1652 creates bespoke statutory definitions for specific small businesses, exempting them from that food-revenue prerequisite entirely. Instead of proving your business model works under the state's standard, you only need to show you meet the exact geographic and physical criteria spelled out in your venue's carve-out language in the statute.
The practical effect: if your business is one of the named exemptions, you can pursue an LBD license based on location and facility specifications alone—a significantly lower bar than the food-revenue test.
The exemptions apply to 28+ small venues, each with its own statutory language. The carve-outs are found primarily in Section 11 (page 5) and repeated in Sections 19 and 21 of the bill. Each exemption is tailored to a specific business, so you need to check whether your venue is named or meets the criteria of a named exemption.
This is not a blanket change. If your business is not explicitly carved out in the statute, you still must meet the standard food-revenue threshold.
Section 24 of HB1652 imposes a hard deadline: any application for an LBD license under one of these exemptions must be approved by a specific date. Once that window closes, the exemption expires. If you believe your venue qualifies, don't delay—confirm your eligibility and timeline immediately.
Review the text of HB1652, specifically Sections 11, 19, and 21, to determine whether your business is named or matches one of the carved-out criteria. If you operate a small venue and have previously been unable to obtain an LBD license due to food-revenue requirements, this may be your pathway—but only if you meet the statute's precise specifications.
Consult with your local ABC board and legal counsel to confirm your eligibility and understand the application process and deadline. The exemption is real, but it's narrowly drawn and time-limited.
Source: HB1652, AN ACT to amend Tennessee Code Annotated, Title 57, relative to consumption of alcoholic beverages on premises, signed May 22, 2026.