Alcohol & Tobacco Tax Annual Report

Alcohol & Tobacco Tax Annual Report Fiscal Year 2013 Comptroller of Maryland

Table of Contents I. Introduction... 1-12 II. III. IV. Revenues State Gross Revenue: 1933-2013... 13 Gross Revenue Net of Refunds... 14 Alcoholic Beverages Revenue... 15 Tobacco Revenue... 16 State Revenue: Licenses... 17 State Revenue: Alcohol Permits... 18 Sales & Consumption Per Capita Consumption: Alcoholic Beverages 19 Per Capita Tax Dollars & Consumption... 20 Alcoholic Beverages and Cigarettes Wholesale Alcoholic Beverage Sales and Cigarette Sales... 21 Maryland Winery Gallonage Sales... 22 Maryland Brewery Gallonage Sales... 23 Administrative & Enforcement Summary of Activities... 24 V. Local Jurisdictions: Retail Licenses, Revenue, and Statistics Bulk Transfer Permits... 25 Area & Population Chart 26 State of Maryland: County Restrictions... 27 Local Revenue: Liquor Boards & Dispensaries 28 Retail Licenses Issued: Summary... 29 Retail Licenses Issued: Local Liquor Boards... 30 Retail License Violations... 31 Retail License Information: Locations... 32-34 Retail License Issuing Authorities... 35-36 Liquor Control Boards & Dispensary Locations 37 Clerks of the Court... 38

Introduction The Revenue Administration Division of the Comptroller of Maryland is responsible for collecting the alcoholic beverages tax and tobacco tax, and the Field Enforcement Division is responsible for regulation and enforcement of the State s alcoholic beverages and tobacco tax laws. This annual report provides data and statistics related to both the tax collection function of the Revenue Administration Division and the regulatory function of the Field Enforcement Division. All information in this report, including but not limited to revenue, licensure, and other regulatory activities are for fiscal year 2013: July 1, 2012 through June 30, 2013. Taxes The Maryland Alcohol Beverages Tax is imposed on each gallon at the following rates: Distilled Spirits * $ 1.50 Wine $ 0.40 Beer ** & Hard Cider $ 0.09 (* If distilled spirits contains a percentage of alcohol greater than 100 proof, or 50% alcohol, an additional tax for each 1 proof over 100 proof is 1.5 cents for each gallon. ** Flavored Malt Beverages (FMBs) are taxed at the same rate as beer) Local jurisdictions are prohibited from imposing an alcohol tax. After paying refunds and the administrative costs of the Comptroller, alcohol beverage taxes are distributed to the General Fund of the State. The Maryland Tobacco Tax is imposed on cigarettes and other tobacco products. Local jurisdictions are prohibited from imposing a tobacco tax on cigarettes. In addition to the $ 2.00 tax on a 20-cigarette pack, there is an additional $.10 cent tax for each cigarette in a package of more than 20 cigarettes, and a $ 0.10 cent tax for each cigarette in a package of free sample cigarettes. If the cigarette pack has 10 or fewer cigarettes, the tax is $ 1.00 for each pack. The tax rate for OTP is a percentage of the wholesale price, which means the price for which a wholesaler buys other tobacco products, exclusive of any discount, trade allowance, rebate, or other reduction. The tax rate for OTP is 15% of the wholesale price, which means the price for which a wholesaler buys other tobacco products, exclusive of any discount, trade allowance, rebate, or other reduction. Tobacco tax revenues are used to pay for refunds, and the Comptroller s administration costs with the balance distributed to the General Fund of the State. Revenue Total net receipts from alcoholic beverages and tobacco taxes, license and permit fees, and miscellaneous income for fiscal year 2013 was $ 443,342,725. Compared to fiscal year 2012, fiscal year 2013 tax revenues indicate the following changes:.8% decrease in distilled spirits; a 2% increase in wine; and a 1.5% decrease in beer with an overall decrease of.2 % in alcoholic beverages tax collections. The net receipt from the sales of cigarette tax stamps in the amount of $ 379,312,145 reflects a 4.6% decrease from fiscal year 2012. The net receipt from Other Tobacco Products tobacco tax is $ 34,153,510, an increase of 166.7% from fiscal year 2012. Other Tobacco Products include chewing tobacco, moist snuff, pipe tobacco, cigars, and roll-your-own tobacco. Compared to alcoholic beverages tax revenues, tobacco taxes provided the largest percentage of net receipts at 84.7%. As a percentage of net tax revenue, distilled spirits accounted for 3.5%; wine: 1.4%; and beer: 2%. Other tobacco products tax accounted for 7.6% of the total tax revenues. The Comptroller issues alcoholic beverages manufacturer and wholesaler licenses, and various permits. Local liquor boards issue alcoholic beverages retail licenses. Cigarette manufacturer and wholesaler licenses are issued by the Comptroller. As of May 1, 2011, OTP in-state manufacturer licenses and OTP licenses for both in-state and out-of-state wholesalers have been issued by the Comptroller repealing the OTP registration system. The Clerks of the Court issue cigarette retail licenses; and as of May 1, 2011, OTP retailer licenses and tobacconist licenses. The tobacco license fees collected consist of cigarette manufacturer and wholesaler licenses issued by the Comptroller, and since May 1, 2011, license fees for other tobacco products manufacturer and wholesaler licenses. Alcohol and tobacco license fees collected by the Comptroller are paid to the General Fund. Cigarette license fees are to be used to enforce the Maryland Cigarette Sales Below Cost Act. Alcohol and Tobacco Legislation The Maryland General Assembly passed several legislative bills during the State of Maryland - Alcohol and Tobacco Tax Annual Report 2013 Page 1

2013 session related to alcohol and tobacco laws. A summary of the legislation is available at http://mgaleg.maryland.gov/, the Maryland General Assembly s website. 2013 Legislative Session Alcoholic Beverages STATEWIDE: 1. Senate Bill 32 House Bill 4 Alcoholic Beverages Brewery Licenses On Premises Consumption (1) The identical bills allow a Class 5 Brewery Licensee to sell 500 barrels each year of beer brewed at the location for on-premises consumption. The local licensing board or county liquor control board may require a charge a fee for on-premises consumption to individuals over the age of twenty-one (21) years. (2) The local licensing board may require the licensee or an employee of the licensed premises to comply with alcohol awareness training requirements. 2. Senate Bill 223 House Bill 231 Alcoholic Beverages Class 7 Limited Beer Wholesaler s License (1) The identical bills create a Class 7 Limited Beer Wholesaler s License allowing local craft breweries to sell limited amounts of their product at retail. (2) The Class 7 Limited Beer Wholesaler Licensee may sell, deliver, and distribute up to 3,000 barrels of its own beer produced on their own premises. (3) The Class 7 Limited Beer Wholesaler License is only given to a Class 5 Manufacturer s License holder and a Class 7 Micro-Brewery License holder who does not produce more than 22,500 barrels annually. 3. House Bill 978 Alcoholic Beverages Wine Off-Site Permit and Wine Festival Permit (1) This permit can only be obtained by the present holder of a Class 4 Limited Winery license and only be used at: (i) the Montgomery County Agricultural Fair; (ii) one night each week from June November at the North Beach Farmers Market; (iii) at an event that has its major purpose as an activity that is other than the sale and promotion of alcoholic beverages and the participation of the winery is a subordinate activity (iv) at farmers markets that are listed on the Farmers Market Directory by the Department of Agriculture (v) at a wine festival that has its primary purpose of promoting Maryland wine and authorized by the Comptroller EFFECTIVE JUNE 1, 2013. 4. House Bill 230 Alcoholic Beverages Farm Breweries and Micro-Breweries (1) This house bill adds the holder of a Class 7 Micro-Brewery license to the holder of licensees with whom the holder of a Class 8 Farm Brewery license may contract to brew and bottle beer. (2) The ingredients for the beer must be derived from the Class 8 Farm Brewery licensee s farm. (3) Additionally, this bill allows the Comptroller to issue a Class 8 Farm Brewery license to a person in Howard County that holds no more than two Class B beer, wine, and liquor licenses. LOCAL: 1. Senate Bill 16 House Bill 18 Alcoholic Beverages Anne Arundel County Alcoholic Beverages Refillable Container License (1) Creating in Anne Arundel County a refillable container license to a holder of a Class A License, a Class B license, or a Class D License. (2) A refillable container license entitles the license holder to sell draft beer for consumption off the licensed premises in a refillable container with a capacity of not less than 32 ounces and not more than 128 ounces. (3) To be used as a refillable container, a container shall have certain requirements including being sealable, be branded with an identifying mark of the license holder, bear the federal health warning statement required by the Code of Federal Regulations, and display instructions for cleaning the container. State of Maryland - Alcohol and Tobacco Tax Annual Report 2013 Page 2

(4) Additionally, the container must bear a label that cleaning the container is the responsibility of the consumer and the contents of the container are perishable and should be refrigerated immediately and consumed within 48 hours after purchase. (5) A proper form and fees must be paid to the local licensing board including a $500 fee for an applicant whose alcoholic beverages license does not have an off-sale privilege or $50 for an applicant who does have an off-sale privilege. (6) The terms of sale for a refillable begin at the same time as those for the license already held by the person to whom the refillable container license is issued. 2. Senate Bill 149 House Bill 68 Alcoholic Beverages Dorchester County Micro- Breweries (1) The bill authorizes the holder of a Class D alcoholic beverages license in Dorchester County to be granted a Class 7 micro-brewery license, so long as the Class 7 micro-brewery license is used on the same premises as the Class D license. (2) For the Class 7 micro-brewery license holder the hours and days of consumer sale are regulated under the Class D license. EFFECTIVE JUNE 1, 2013. 3. Senate Bill 148 House Bill 162 Alcoholic Beverages Caroline County Micro- Brewery License (1) This bill adds Caroline County to the list of jurisdictions authorizing the issuance of a Class 7 micro-brewery license. The micro-brewery license in Caroline County may be issued to a holder of a Class B beer, wine, and liquor (onsale) license for use on the premises or restaurant. (2) The bill also gives a holder of a micro-brewery license an off-sale privilege to sell beer brewed under the license to customers for consumption off the licensed premises in refillable containers that are sealed by the licensee at the time of each refill. 4. Senate Bill 35 House Bill 216 Alcoholic Beverages Queen Anne s County and St. Mary s County Micro-Brewery License (1) This bill adds Queen Anne s and St. Mary s counties to the list of jurisdictions authorizing the issuance of a Class 7 micro-brewery license. (2) The micro-brewery license in Queen Anne s or St. Mary s counties may be issued to a holder of a class B beer, wine and liquor (on-sale) license for use on the premises of a restaurant. (3) The bill also gives a micro-brewery license in Queen Anne s or St. Mary s counties the off-sale privilege to sell beer brewed under the license to customers for consumption off the licensed premises in refillable containers that are sealed by the licensee at the time of each refill. 5. Senate Bill 150 House Bill 133 Alcoholic Beverages Dorchester Country Refillable Containers (1) This bill authorizes the Dorchester County Board of License Commissioners to issue a refillable container license to a holder of a Class B or Class D alcoholic beverages license. (2) The refillable container must be sealable; be branded with an identifying mark of the license holder; bear the federal health warning statement; display instructions for cleaning the container; and bear a label stating that cleaning the container is the responsibility of the consumer, and the contents of the container are perishable and should be refrigerated immediately and consumed within 48 hours after purchase. (3) The term of a refillable container license is the same as that of the applicant s alcoholic beverage license. The fee is $50 if the applicant already has an off-sale privilege or $500 if the applicant does not already have that privilege. (4) A refillable container license holder cannot display or provide shelving for beer in areas that are accessible to the public for off-premises consumption. EFFECTIVE JUNE 1, 2013. 6. Senate Bill 244 House Bill 145 Alcoholic Beverages City of Annapolis Refillable Container License (1) This bill authorizes the Annapolis City Alcoholic Beverages Control Board to issue a refillable container license to a holder of a Class A, Class B, or Class D license. (2) The refillable container must be sealable; be branded with an identifying mark of the license holder; bear the federal health warning statement; display instructions for cleaning the State of Maryland - Alcohol and Tobacco Tax Annual Report 2013 Page 3

container; and bear a label stating that cleaning the container is the responsibility of the consumer, and the contents of the container are perishable and should be refrigerated immediately and consumed within 48 hours after purchase. (3) The term of a refillable container license is the same as that of the applicant s alcoholic beverage license. The fee is $50 if the applicant already has an off-sale privilege or $500 if the applicant does not already have that privilege. (4) The term of the refillable container license is the same as that of the applicant s alcoholic beverage license. The bill also requires the sale of refillable containers to end at midnight, and authorizes the license holders to refill only those containers that were branded by a license holder. 7. House Bill 172 Alcoholic Beverages Charles County Nonalcoholic Items Hours of Sale (1) This bill authorizes an alcoholic beverage licensee in Charles County to sell nonalcoholic items Monday through Saturday between 5 a.m. and 2 a.m. the following day and Sunday between 6 a.m. and midnight. 8. House Bill 199 Alcoholic Beverages Queen Anne s County Beer, Wine and Liquor Tasting License (1) This bill authorizes Queen Anne s County Board of License Commissioners to issue a beer, wine, and liquor tasting (BWLT) license to the holder of a Class A beer, wine, and liquor license. (2) A BWLT license allows the licensee to provide samples of up to 1 ounce of beer from a given brand and 4 ounces from all brands; up to 2 ounces of wine from a given brand and 4 ounces from all brands; and up to 0.5 ounce of liquor from a given brand and 1.5 ounces from all brands to any one person in a single day for tasting. (3) The annual license fee for the BWLT license is $100 which is in addition to the fee for any other alcoholic beverages license held by the license holder. 9. Senate Bill 49 House Bill 212 Alcoholic Beverages Cecil and Queen Anne s Counties Beer and Wine Festivals (1) This bill increases the number of beer and wine festivals (BWF) authorized in Queen Anne s County in which special BWF licenses are issued by the Queen Anne s County Board of License Commissioners from the present one weekend annually, Friday through Sunday inclusive, to a maximum of four weekends annually. (2) The special BWF licensee must be a holder of an existing State retail alcoholic beverages license, a State Class 3 winery license, or a State Class 4 limited winery license. (3) A licensee is permitted to display and sell wine that is manufactured and processed in any state, price filed in accordance with the Comptroller s regulations, and distributed in Maryland at the time the application is filed. (4) A licensee is permitted to display and sell beer that is brewed by a brewer who brews less than 60,000 barrels of beer annually and whose product is distributed in Maryland at the time the application is filed. (5) The licensee may display and sell beer and wine at retail for consumption on or off the licensed premises and display and sell wine at retail that is manufactured and processed in any state for consumption off the licensed premises on the days and for the hours designated for the BWF. (6) A holder of a BWF license is not prohibited from holding another alcoholic beverages license of a different class or nature. 10. House Bill 213 Alcoholic Beverages Queen Anne s County Inspectors (1) This bill repeals the requirement that the alcoholic beverages inspector appointed by the Queen Anne s County Board of License Commissioners be a full-time position. 11. House Bill 301 Alcoholic Beverages St. Mary s County Class 6 Pub- Brewery License (1) This bill enables the Comptroller to issue a Class 6 pub-brewery license in St. Mary s County. 12. Senate Bill 321 House Bill 410 Alcoholic Beverages Frederick County License Fees (1) This bill alters the distribution of alcoholic beverages license fee revenue in Frederick County by requiring the Frederick County Treasurer to keep all alcoholic beverages license fees collected. State of Maryland - Alcohol and Tobacco Tax Annual Report 2013 Page 4

(2) Salaries and expenses for the Frederick county Board of License Commissioners must be paid from the license fees that the Frederick County Treasurer receives. 13. House Bill 455 Alcoholic Beverages Howard County Refillable Wine Containers (1) This bill authorizes the holder of a refillable container license in Howard County to sell wine for consumption off the licensed premises in a refillable container with a capacity of not less than 17 ounces and not more than 34 ounces if the holder is licensed to sell wine in Howard County. (2) The Howard county Board of License Commissioners is authorized to issue, at no cost to a B-SBW license holder, a refillable container permit to a holder of any class of alcoholic beverages license issued by the board except a Class C license and a Class GC license upon completion of the application provided by the board. (3) The refillable container must be sealable; be branded with an identifying mark of the license holder; bear the federal health warning statement; display instructions for cleaning the container; and bear a label stating that cleaning the container is the responsibility of the consumer, and the contents of the container are perishable and should be refrigerated immediately and consumed within 48 hours after purchase. (4) The term of and the hours of sale for a refillable container permit issued to an applicant are the same as that of the applicant s alcoholic beverages license. 14. Senate Bill 371 House Bill 464 Garrett County Alcoholic Beverages Sunday Sales (1) This bill authorizes a holder of a Class D license to sell alcoholic beverages from 1 p.m. to 10 p.m. on Sundays in Garrett County. (2) The establishment of the Class D licensee must be a permanent building; be able to seat at least 20 people at tables; have a full-service commercial kitchen capable of serving at least 20 meals at a time; and be approved by the Garrett County Board of License Commissioners, Department of Public Utilities, Health Department, and the Planning and Land Development Office. (3) The bill further expands Sunday sales to precincts of an election district in which voters approve a local referendum in favor of Sunday sales. (4) For a holder of a Class D license, the Sunday sales option has a one time $250 issuing fee and a $250 annual fee. EFFECTIVE JUNE 1, 2013. 15. Senate Bill 471 - House Bill 491 Alcoholic Beverages Somerset County Selling Near Schools, Places of Worship, Public Libraries, and Youth Centers (1) These bills create exceptions to the prohibition in Somerset County against approving a license to sell alcoholic beverages in a building located within 300 feet of a school, church or other place of worship, public library or youth center unless a licensed establishment existed before a school, church or other place of worship, public library, or youth center was built within 300 feet of the licensed establishment. (2) Additionally the previous owner of the establishment was a holder of a license to sell alcoholic beverages. EFFECTIVE OCTOBER 1, 2013. 16. House Bill 645 Alcoholic Beverages Montgomery County Distance from Schools, Places of Worship, or Youth Centers (1) This bill authorizes the Montgomery County Board of License Commissioners to approve, by majority vote rather than unanimous action, the application for license to sell alcoholic beverages more than 300 feet away from schools, places of worship, or certain youth centers. 17. House Bill 647 Alcoholic Beverages Montgomery County Town of Kensington Beer and Wine Sampling or Tasting MC 9-13 (1) The bill authorizes the Montgomery County Board of License Commissioners to issue three (3) beer and wine sampling or tasting (BWST) licenses to a holder of a Class A license for holding beer and wine tastings or samplings in the town of Kensington. State of Maryland - Alcohol and Tobacco Tax Annual Report 2013 Page 5

(2) A BWST license authorizes tasting or sampling of alcoholic beverages only on the licensed premises of the holder of a Class A license. (3) A licensee may allow consumption by an individual for sampling or tasting purposes of not more than one (1) ounce from a single brand of wine; four (4) ounces from all brands of wine in a single day; three (3) ounces from a single brand of beer; and twelve (12) ounces from all brands of beer in a single day. (4) Once a bottle is opened, the bottle used for the beer or wine tasting or sampling must be marked that it is to be used for that purpose only. (5) The license holder must notify the board in writing at least seven (7) days before each sampling or tasting event. (6) All applications for BWST licenses must be made on forms supplied by the local board and may be issued without a public hearing. 18. House Bill 649 Alcoholic Beverages Montgomery County Refillable Beer Containers MC 4-13 (1) This bill authorizes the Montgomery County Board of License Commissioners to issue refillable container permit to a holder of a Class B or Class D beer and light wine license issued in the county. (2) A refillable container permit entitles the holder to sell draft beer for consumption off the licensed premises in a refillable container with a capacity of not less than 32 ounces and not more than 128 ounces. (3) The refillable container must be sealable; be branded with an identifying mark of the license holder; bear the federal health warning statement; display instructions for cleaning the container; and bear a label stating that cleaning the container is the responsibility of the consumer, and the contents of the container are perishable and should be refrigerated immediately and consumed within 48 hours after purchase. (4) The term of a refillable container permit is the same as that of the applicant s alcoholic beverage license. 19. House Bill 672 Alcoholic Beverages Montgomery County Consumption of Wine Not Bought from License Holder Class H Licenses (1) This bill adds Class H alcoholic beverage licensees in Montgomery County, allowing the sale of wine, to the types of licensees that may allow an individual to consume wine not purchased from or provided by the restaurant or facility. (2) The Comptroller will collect the sales and use tax imposed on the corkage fees charged by the restaurants. 20. Senate Bill 767 House Bill 749 Alcoholic Beverages Garrett County Licenses, Permits, and Other Authorizations (1) This bill authorizes the Garrett County Board of License Commissioners to issue, and requires the board to adopt implementing regulations, for a Class BDR beer and wine (on-sale) license, a refillable container permit, and a beer festival license. (2) The bill gives a Class BDR beer and wine, Class D beer and light wine, and Class D beer, wine, and liquor license holders a catering option. (3) Additionally, the bill allows specified holders to sell alcohol in commemorative or special event bottles for consumption at a catered special event. (4) A Class BDR beer and wine or beer, wine, and liquor license may be issued to an applicant who already holds a Class B beer, wine, and liquor license or a Class B beer and wine license. A Class BDR license allows the holder to sell beer and light wine for consumption on the licensed premises and brewed beverages for consumption off the licensed premises. (5) The one time issuing fee for a new Class BDR license without the catering option is $500 in addition to the annual fee of $500, and the onetime issuing fee with the catering option is $625 in addition to the annual fee of $625. (6) Additionally, the State Comptroller may issue a general statewide caterer s (SCAT) license to qualified caterers for use throughout the State or a limited SCAT license for use in three contiguous political subdivisions. The annual fee for a general SCAT license is $2,000. The annual fee for a limited SCAT license ranges from $750 to $1,500. (7) In addition to giving a catering option to a Class BDR beer and wine license holder, the bill gives a catering option to a Class D beer and light wine retail license holder and a Class D beer, wine and liquor on-sale license holder. (8) At no cost, the Garrett County Board of License Commissioners may grant a Class B beer and State of Maryland - Alcohol and Tobacco Tax Annual Report 2013 Page 6

light wine or beer, wine, and liquor license holder, a Class D beer and light wine license holder, a Class D beer, wine, and liquor license holder, and a special Class C license holder a privilege to sell alcohol in commemorative bottles, approved prior to the event, for consumption off the licensed premises at a catered special event on days and hours approved by the board. (9) Moreover, this bill authorizes the Garrett County Board of License Commissioners to issue a refillable container permit to a draft beer license holder who also holds any class of alcoholic beverages licenses, except a Class C license or a Class A license. (10) A refillable container permit entitles the holder to sell draft beer for consumption off the licensed premises in refillable container with a capacity of not less than 32 ounces and not more than 128 ounces. (11) A refillable container must be sealable; be branded with an identifying mark of the license holder; bear the federal health warning statement; display instructions for cleaning the container; and bear a label stating that cleaning the container is the responsibility of the consumer, and the contents of the container are perishable and should be refrigerated immediately and consumed within 48 hours after purchase. (12) For a location where Sunday sales are allowed, Sunday sales may begin at 10 a.m. for a wine festival and 1 p.m. for a beer festival. (13) The county board may issue two beer festival licenses annually to a holder of a retail alcoholic beverages license issued by the board, a Class 5 brewery license, a Class 6 pub-brewery license, or a Class 7 micro-brewery license. (14) This bill adds an individual in an establishment in Garrett County for which a Class B Bed and Breakfast license is issued to the list of individuals that may consume wine not purchased or provided by the license holder under specific circumstances. EFFECTIVE JUNE 1, 2013. 18. Senate Bill 629 House Bill 816 Alcoholic Beverages Allegany County Video Lottery Facility Sales and Consumption (1) The two identical bills establish a Class BWL-VLF (video lottery facility) and a Class BWL-VLC (video lottery concessionaire) beer, wine, and liquor license in Allegany County. (2) The Class BWL-VLF and Class BWL-VLC licenses authorize the sale of beer, wine, and liquor for consumption anywhere in the video lottery terminal (VLT) facility or on the grounds controlled by the Class BWL-VLF license. (3) The annual license fee is $15,000 for a Class BWL- VLF license and $5,000 for a Class BWL-VLC license. (4) The hours for sale of alcoholic beverages under an entertainment facility license or an entertainment concessionaire license are the same as the hours of operation for a VLT facility. EFFECTIVE APRIL 9, 2013. 19. House Bill 901 Alcoholic Beverages Howard County Alcoholic Beverages Establishments Distance from Schools State of Maryland - Alcohol and Tobacco Tax Annual Report 2013 Page 7 (1) This bill alters the minimum distance restriction in Howard County so that a Class B license to sell alcoholic beverages may not be granted for a restaurant located within 400 feet from the nearest point of a public school building. 20. House Bill 1070 Alcoholic Beverages City of College Park Sales by License Holders Near School Buildings (1) This bill authorizes an alcoholic beverages license to be granted in the City of College Park to an establishment that is located within a commercial district and is located more than 400 feet from a school building. (2) There is a one-time application fee of $700 and a license fee of $1,500 annually thereafter. EFFECTIVE OCTOBER 1, 2013. 21. House Bill 1072 Alcoholic Beverages City of Laurel Sales by License Holders PG 308-13 (1) This bill authorizes the Prince George s County Board of License Commissioners to issue a license to sell alcoholic beverages in any building regardless of its distance from a place of worship in the City of Laurel. EFFECTIVE OCTOBER 1, 2013. 22. House Bill 1074 Alcoholic Beverages Prince George s County Hours of Sale and Fee for Golf Course Licenses PG 318-13 (1) This bill alters the type of special seven-day Class B-GC (golf course) alcoholic beverages license available to a golf course located on the premises of the Maryland-National Capital Park and

Planning Commission from a beer and wine license to a beer, wine, and liquor license. (2) The annual fee is set at $500. (3) The bill further expands the hours of sale for the new license to begin at 9 a.m. daily. 23. House Bill 1079 Alcoholic Beverages Prince George s County Salary of Part- Time Liquor Inspectors (1) This bill makes technical corrections to Article 2B Alcoholic Beverages to clarify that the annual salary of a part-time liquor inspector in Prince George s County is $10,900. 24. House Bill 1081 Alcoholic Beverages Prince George s County Entertainment Permit Class BH Licensees PG 301-13 (1) This bill authorizes the holder of a Class BH (hotel) alcoholic beverages license in Prince George s County that obtains a special entertainment permit to allow an individual under the age of twenty-one (21) years to be present on the licenses premises while alcoholic beverages are being served during specified events. (2) Special events include the following events: anniversary party, baby shower, baptism reception, Bar Mitzvah, Bat Mitzvah, beautillion, cotillion, birthday party, book signing, church event, confirmation reception, corporate reception, engagement party, faith-based event, family reunion, family themed theatrical, graduation party, performance, political event, retirement party, rites-of-passage event, scholarship award ceremony, school event, tea party, wedding, wedding reception, and any family oriented event defined in regulations adopted by the county board. (3) The board will determine the number of events per week that the license holder may exercise the privileges of the permit. (4) The board shall hold a public hearing in order to issue this permit and hear all arguments for and against the license holder from obtaining a special events permit. (5) The board shall hold a similar hearing in order to revoke a special entertainment permit or to protest the renewal of the special entertainment permit. (6) The annual fee for the permit is $1,500 in addition to the fee for the Class BH license. EFFECTIVE JUNE 1, 2013. 25. House Bill 1082 Alcoholic Beverages Prince George s County Alcoholic Beverages Class A Licenses and Class B- AE Licenses PG 317-13 (1) This bill increases the number of Class B-AE (arts and entertainment) licenses from five (5) to eight (8) that can be issued in Prince George s County. (2) Additionally, the Board of License Commissioners may not issue a new Class A license, or transfer an existing Class A license to a location within three-fourths of a mile of a correctional facility in Upper Marlboro. 26. House Bill 1105 Alcoholic Beverages Prince George s County Prohibition on Use of Self-Scanning Cash Registers PG 311-13 (1) This bill prohibits a retail alcoholic beverages licensee in Prince George s County from selling alcoholic beverages by means of a self-scanning cash register, or other automated system operated by a customer on a self-service basis, that is capable of recovering stored information related to the sale of price of individual retail items. (2) Violators are subject to a maximum fine of $1,000 for the first offense; $2,500 for a second offense; and $2,500 or suspension or revocation of their license for a third or subsequent offense. 27. House Bill 1240 Alcoholic Beverages Howard County Continuing Care Retirement Community License Ho. Co. 10-13 (1) This bill authorizes the Howard County Board of License Commissioners to issue a Class C beer, wine, and liquor license to a continuing care retirement community that is composed of residents of a continuing care retirement community that has obtained a certificate of registration from the Maryland Department of Aging; operates solely for the use of residents and guests of the community; and is not directly or indirectly owned or operated as a public business. (2) The annual fee for the license is $250. (3) The license authorizes the licensee to keep for sale and to sell at retail to any resident or guest of State of Maryland - Alcohol and Tobacco Tax Annual Report 2013 Page 8

the community beer, wine, and liquor for onpremises consumption only. 28. House Bill 1292 Alcoholic Beverages Calvert County Alcoholic Beverage Licenses and Appeals (1) This bill authorizes the Calvert County Board of Licensed Commissioners to issue a continuing care retirement community onsale beer, wine and liquor license to a club at a retirement community that meets specified requirements. (2) The club or retirement community must be composed of residents of a continuing care retirement community that has obtained a certificate of registration from the Maryland Department of Aging, has at least 50 bona fide members; and has annual dues that average at least $5 per member. (3) Moreover, this bill adds Calvert County to the list of jurisdictions in which a circuit court may remand certain proceedings to the local licensing board. EFFECTIVE JUNE 1, 2013. 29. House Bill 1305 Alcoholic Beverages City of Annapolis Residency Requirement (1) This bill specifies that an applicant for an alcoholic beverages license issued in the City of Annapolis may meet the residency requirement by residing anywhere in Anne Arundel County for two (2) years preceding the filing of an application. 30. Senate Bill 957 House Bill 1387 Alcoholic Beverages Frederick County Banquet Facility License and cannot be sold more than thirty (30) calendar days before the special anniversary or event. 31. House Bill 1431 Alcoholic Beverages Prince George s County Towne Centre at Laurel PG 320-13 (1) This bill authorizes Prince George s County Board of License Commissioners to issue up to six (6) Class B-DD (Development District) licenses to restaurants located within the Towne Centre at Laurel. (2) Furthermore this bill removes Laurel Commons from the list of areas in Prince George s County that are underserved by restaurants. 32. Senate Bill 1004 - House Bill 1448 Alcoholic Beverages Calvert County Sunday Sales (1) This emergency bill removes the prohibition against a Class B or Class C license holder from selling alcoholic beverages at a bar or counter on Sunday in Calvert County. EFFECTIVE MAY 2, 2013. 33. Senate Bill 128 House Bill 343 Alcoholic Beverages Harford County Hours of Sale for Class B Licensees (1) These identical bills expand the hours for sale of beer and wine under a Class B Café License. (2) The Class B Café licensee may sell alcoholic beverages between 8 a.m. and 2 a.m. the following day instead of between 10 a.m. and 11 p.m., Monday through Sunday, inclusive. 34. Senate Bill 129 Alcoholic Beverages Class H-CC (Corporate Club/Conference Center) License (1) These identical bills alter the existing Class B-B.F. beer, light wine, and liquor on-sale license in Frederick County by providing that the banquet facility must contain a dining room for preparing full-course meals for at least 100 people inside or outside the premises at one seating. (2) Furthermore, the bill alters the requirement for light wine, the license now allows for the consumption of beer, wine or liquor. (3) If the beer, wine, or liquor is in a collectible bottle commemorating a special anniversary or event State of Maryland - Alcohol and Tobacco Tax Annual Report 2013 Page 9 (1) This emergency bill authorizes the Harford County Liquor Control Board to issue a Class H- CC beer, wine, and liquor license to establishments that have a banquet room, conference center, or specified meeting room; and a corporate dining room. (2) The licensee may hold multiple events in the licensed establishment simultaneously. (3) The annual fee is $3,000 and no more than six (6) Class H-CC licenses may be in effect at a time.

(4) The licensee may hold only one self-sponsored event per year in the banquet, conference, or meeting room. EFFECTIVE MAY 2, 2013. 35. Senate Bill 131 House Bill 345 Alcoholic Beverages Harford County Liquor Control Board Reserve Account (1) These identical bills reserve an account for the Harford County Liquor Control Board which is a special, non-lasping account not to exceed $100,000 that will ensure that issuance and renewal of licenses, licensing enforcement, and other services will continue in the event of unanticipated financial circumstances. (2) The Harford County Liquor Control Board must hold the reserve account separately and account for the reserve account. A designee must administer the reserve account. (3) The reserve account will consist of money from specified sources, including license fees, fines, and investment income. (4) No more than twenty percent (20%) of the aggregate net proceeds received by the Harford County Liquor Control Board may be payable to the reserve account. (5) If current year appropriations exceed expected revenues, the board may incur expenditures from the reserve account. 36. Senate Bill 150 House Bill 133 Dorchester County Alcoholic Beverages Refillable Containers. (1) These identical bills authorize the Dorchester County Board of License Commissioners to issue a refillable container license to a holder of a Class B or Class D alcoholic beverages. (2) A refillable container license entitles the holder to sell draft beer for consumption off the licensed premises in a refillable container with a capacity of not less than 32 ounces and not more than 128 ounces. (3) The refillable container must be sealable; be branded with an identifying mark of the license holder; bear the federal health warning statement; display instructions for cleaning the container; and bear a label stating that cleaning the container is the responsibility of the consumer, and the contents of the container are perishable and should be refrigerated immediately and consumed within 48 hours after purchase. (4) A refillable container license applicant must complete the form that the board provides and pay an annual license fee of $50 if the applicant already has an off-sale privilege or $500 if the applicant does not have that privilege. (5) A refillable container license holder cannot display or provide shelving for beer in areas that are accessible to the public for off-premises consumption. (6) The term of a refillable container license is the same as that of the applicant s alcoholic beverage license. EFFECTIVE JUNE 1, 2013. 37. Senate Bill 235 Alcoholic Beverages Baltimore City License Revocation (1) This bill specifies that an order by the Baltimore City Board of Liquor License Commissioners to revoke a license may be stayed, pending appeal, only by the court with which the appeal has been filed. (2) Furthermore, this bill prohibits a person, whose license has been revoked from giving, serving, dispensing, keeping, or allowing the consumption of any alcoholic beverage until a stay is granted or the revocation is reversed on appeal. 38. Senate Bill 349 House Bill 275 Alcoholic Beverages Wicomico County Liquor Act of 2013 (1) These identical bills make numerous changes to the alcoholic beverages law in Wicomico County and authorize the Wicomico County Board of License Commissioners to issue a refillable container license to a holder of any class of alcoholic beverages license issued by the board, except a Class C license, Class D license, Class B- Conference Center license, or Class B-Stadium license. (2) The refillable container must be sealable; be branded with an identifying mark of the license holder; bear the federal health warning statement; display instructions for cleaning the container; and bear a label stating that cleaning the container is the responsibility of the consumer, and the contents of the container are perishable and should be refrigerated immediately and consumed within 48 hours after purchase. (3) A refillable container license applicant must complete the form that the board provides and pay an annual license fee of $500. State of Maryland - Alcohol and Tobacco Tax Annual Report 2013 Page 10

(4) The term of a refillable container license is the same as that of the applicant s alcoholic beverage license. (5) Additionally, the bill allows a holder of a Class B beer and light wine on-sale license to sell light wine and beer in aluminum containers and eliminates the requirement that light wine be sold with meals at a stadium. (6) The bills increase the number of days which beer, wine, or beer and wine sampling or tasting events may be held to fifty (50) in any period for which a license is in effect. (7) The bills repeal the Boards authority to determine the time by which establishments must stop serving alcohol on New Year s Eve Day. (8) Moreover a Class B hotel and restaurant alcoholic beverages license and a Class B beer, wine, and liquor (golf course) license to begin selling alcoholic beverages at 10 a.m. on Sunday. 39. Senate Bill 351 Alcoholic Beverages Somerset County Beer and Wine Tasting License (1) This bill authorizes the Somerset County Board of License Commissioners to issue a beer and wine tasting (BWT) license to a holder of a beer, wine, and liquor license or a beer and wine license. (2) A BWT license allows the licensee to provide free tastings of beer or wine, except during a festival event. (3) The Board must regulate the quantity of beer or wine served to individuals and the number of bottles of beer or wine from which it is being served. (4) A BWT license has a one-time issuing fee of $100 and a $150 annual fee. (5) This bill also eliminates the Wine Tasting (WT) license. 40. Senate Bill 392 Alcoholic Beverages Cecil County Refillable Containers (1) This bill authorizes the Cecil County Board of License Commissioners to issue a refillable container license to a holder of a Class A or Class B alcoholic beverages license. (2) A refillable container license entitles the holder to sell draft beer off the licenses premises in a refillable container with a capacity of not less than 32 ounces and not more than 128 ounces. State of Maryland - Alcohol and Tobacco Tax Annual Report 2013 Page 11 (3) The refillable container must be sealable; be branded with an identifying mark of the license holder; bear the federal health warning statement; display instructions for cleaning the container; and bear a label stating that cleaning the container is the responsibility of the consumer, and the contents of the container are perishable and should be refrigerated immediately and consumed within 48 hours after purchase. (4) The refillable container license applicant must complete the form the Board provides and pay an annual license fee of $50. (5) The hours of sale for a refillable container license are the same as that of the applicant s alcoholic beverage license. 41. Senate Bill 949 Alcoholic Beverages Worcester County (1) This bill makes numerous changes to the alcoholic beverages law in Worcester County. The bill authorizes the Worcester County Board of License Commissioners to issue a Class EF (entertainment facility) beer, wine, and liquor onsale license. (2) The Class EF licensee may sell beer, wine, and liquor from one or more outlets in the entertainment facility for consumption anywhere throughout the entertainment facility. A Class EF may not sell alcoholic beverages for off-sale consumption. An applicant for a Class EF license must have an initial capital investment in the facility of at least $45 million. (3) A Class EF license authorizes dancing; the playing of music and the annual license fee is $15,000. (4) Additionally, the bill specifies that seven (7) day license holders may sell beer, wine, and liquor on-sale and off-sale in Worcester County. (5) Moreover, the bill requires that for establishments licensed to serve alcoholic beverages in Worcester County, the licensee or supervisory employee designated by the licensee be certified by an approved alcohol awareness program and be present during the hours in which alcohol is sold on the premises. However, this requirement does not apply to a Class C license. (6) The bill changes the date for when an alcoholic beverages licensee may begin to elect to purchase wine and liquor from a licensed wholesaler in addition to or instead of from the department of liquor control from May 1, 2016 to July 1, 2014. (7) Acting as a wholesaler, the Worcester County Department of Liquor Control may purchase wine and liquor, on which the excise tax has not

been paid, from a licensed wholesaler, and the department may only resell the wine and liquor to a non-dispensary, licensed retailer and only after the excise tax has been paid. (8) Acting as a retailer, the Worcester County Department of Liquor Control may purchase wine and liquor, on which the excise tax has been paid, from licensed wholesaler for retail sale in dispensary stores. 42. Senate Bill 1028 Alcoholic Beverages Baltimore County License Transfers (1) This bill allows the transfer of a Class B or Class D alcoholic beverages license in Baltimore County from election district 15 to the Towson Commercial Revitalization District, the Quarry at Greenspring, the Metro Center at Owings Mills, and the Promenade at Catonsville to be included in the total number of transferred licenses required by Chapter 558 of 2012. (2) The Baltimore County Board of Liquor License Commissioners must transfer a certain number of Class B or Class D licenses from election district 15 by April 30, 2017. EFFECTIVE JUNE 1, 2013. 2013 Legislative Session (4) If the quantity brought from a United States armed forces installation or reservation does not exceed $100 for other tobacco products or five (5) cartons of cigarettes. (5) A person who willfully ships, imports, sells into or within, or transports within, this State cigarettes or other tobacco products on which the tobacco tax has not been paid, the penalty for a first violation is a mandatory fine of $150 for each carton of cigarettes or each package of other tobacco products. (6) For each subsequent violation, a person is subject to a mandatory fine of $300 for each carton of cigarettes or each package of other tobacco products transported. (7) In addition to a mandatory fine for a first or subsequent violation, a person may be subject to imprisonment not exceeding two (2) years. EFFECTIVE OCTOBER 1, 2013. 2. Senate Bill 98 House Bill 182 Business Regulation Other Tobacco Products Wholesalers License Fee Exception for Cigarette Subwholesalers (1) These identical bills exempt cigarette subwholesalers from having to pay a fee of $250 to the Comptroller in application for a license to act as a wholesaler of other tobacco products. EFFECTIVE OCTOBER 1, 2013. Tobacco/OTP Taxes and Tobacco/OTP Regulations STATEWIDE: 1. Senate Bill 69 Tobacco Products Tobacco Tax Exemptions and Penalties (1) This bill increases the amount of cigarettes and other tobacco products that a consumer may bring into the State without being required to pay the tobacco tax. (2) Furthermore, the bill increases and makes mandatory the monetary criminal penalties associated with willfully shipping, importing, selling into or within, or transporting with the State cigarettes or other tobacco products on which the tobacco tax has not been paid. (3) The tobacco tax does not apply to cigarettes or other tobacco products that a non-resident consumer traveling through with other tobacco products having a retail value of $100 or five (5) cartons of cigarettes; or State of Maryland - Alcohol and Tobacco Tax Annual Report 2013 Page 12

STATE GROSS REVENUE: 1933-2013 (a) Alcoholic Beverages License Fees $11,776,264 (b) Tax on Distilled Spirits 811,288,041 (c) Manufacturer s Tax on Distilled Spirits 1,528,684 (d) Tax on Wine 184,533,771 (e) Tax on Beer 444,262,206 (f) Alcoholic Beverages Permit Fees 16,763,041 (g) Cigarette Tax 6,390,802,853 (h) Other Tobacco Products Tax 143,986,280 (i) Other Tobacco Products Licenses 48,625 Miscellaneous Revenue - Alcoholic Beverages Miscellaneous Revenue - Tobacco Tax 1,462,711 69,167,185 Total $8,075,619,662 (a) License fees are collected from manufacturers, wholesalers, railroads, steamboats and airline companies. (b) The distilled spirits and sparkling and fortified wine tax was created on December 5, 1933 at $1.10 per wine gallon not over 100 proof. The tax on distilled spirits increased to $1.25 per wine gallon on 100 proof or less on October 1, 1939, and increased to $1.50 per wine gallon on 100 proof or less on July 1, 1955. (c) The manufacturer s tax on distilled spirits began on April 1, 1936 at the rate of 5 cents per proof gallon. The rate decreased to 2 ½ cents per proof gallon on June 1, 1937, brandy and neutral spirits were exempt. This tax was repealed on September 30, 1939. (d) Prior to April 1, 1935, the tax levied on sparkling and fortified wines was the same rate as distilled spirits at $1.10 per gallon. As of May 17, 1935, the tax on distilled spirits; however, all wines of whatever alcoholic content were taxed at a rate of $ 0.20 cents per gallon. The wine tax rate increased to 40 cents per gallon on July 1, 1972. (e) The beer alcoholic beverages tax was created on April 1, 1936 at the rate of 2.4375 cents per gallon. The rate increased to 3 cents per gallon on October 1, 1938, and further increased to 9 cents per gallon on July 1, 1972. (f) Certain permit fees were established June 1, 1943 at an annual fee of $5.00 for each permit. As of June 1, 1959, permit fees of $50.00 established for: Public Storage, Public Transportation, Public Storage and Transportation, Nonresident Dealer, Import-Export, and Bulk Transfer. Permit fees of $25 established for: Individual Storage, Private Bulk Sales, and Non- Beverage (Commercial). Permit fees of $2.00 established for: Change of Domicile, Individual Transportation, and Vehicle Identification per vehicle. No permit fee for Non- Beverage eleemosynary or fuel-alcohol. Solicitor s Permit created on June 1, 1973; the Wine Exhibition Permit on July 1, 1985 ($50.00 fee); and the Charity Wine Auction Permit on July 1, 1986 ($500.00 fee). Non-Resident Storage Permits created on July 1987 ($500.00 fee). Alcohol Awareness Program Permit created on July 1, 1989 ($15.00 fee). Numerous license and permit fees increased effective May 1, 1992. Alcohol Awareness Instructor s Permit created on October 1, 1994 ($5.00 fee); Family Beer and Wine Facility Permit on June 1, 1996 ($400.00 fee); Private Bulk Sales Permit on October 1, 1997 ($25.00 fee); Winery Special Event Permit on October 1, 2000 ($25.00 fee). Direct Wine Seller s Permit has been repealed, and replaced on July 1, 2011 by Direct Wine Shipper Permit ($200 fee) and Common Carrier Permit ($100 fee). Fee per vehicle for Vehicle Identification card increased from $2.00 to $10.00 on June 1, 2003. Fee for a Charity Wine Auction permit reduced $500.00 to $10.00 on June 1, 2004. Non-resident winery permit created on April 25, 2006 ($50.00 fee). Brewery Special Event Permit created on June 1, 2008 ($25.00 fee). Resident Dealer Permit created on July 1, 2009 ($200 fee), and the fees for a Public Storage and Transportation Permit, Nonresident Dealer s Permit, and a Bulk Transfer Permit increased to $200. (g) Tobacco tax on cigarettes effective July 1, 1958, at rate of 3 cents per pack. Tax increased to 6 cents per pack on July 1, 1961; 10 cents per pack on June 1, 1975; 13 cents per pack on July 1, 1980; 16 cents per pack on June 1, 1991; 36 cents per pack on May 1, 1992; 66 cents per pack on July 1, 1999; $1.00 per pack on June 1, 2002; and $2.00 per pack on January 1, 2008. Prior to 1961, cigarette tax was imposed by certain counties and Baltimore City. (h) Tobacco tax on Other Tobacco Products became effective on July 1, 2000 at a rate of 15% of the wholesale price. (i) Other Tobacco Products Licenses effective May 1, 2011. Annual OTP fees: In-state manufacturers: $25.00, all wholesalers: $250 (waived if have cigarette wholesaler license); storage warehouse: $ 25.00 Note: The Alcoholic Beverages Division merged with the Cigarette Tax Unit in fiscal year 1972. Tobacco revenue begins in fiscal year 1972. State of Maryland - Alcohol and Tobacco Tax Annual Report 2013 Page 13

GROSS REVENUE NET OF REFUNDS % Of Gross Net Total Receipts Refunds Receipts Receipts Receipts: Spirits at $1.50 per wine gallon $ 15,836,621 $ 291 $ 15,836,330 3.5% Wine at $.40 per gallon 6,136,492 894 6,135,598 1.4% Beer at $.09 per gallon 8,897,401 2,380 8,895,021 2.0% Cigarette Tax 379,396,873 84,710 379,312,163 84.7% Other Tobacco Tax 34,175,600 22,090 34,153,510 7.6% Alcoholic Beverage License Fees 383,630-383,630 0.1% Alcoholic Beverage Permit Fees 1,121,790 395 1,121,395 0.3% Miscellaneous Alcoholic Beverages 30,780 4,000 26,780 NA Miscellaneous Tobacco Tax 2,473,430 22,459 2,450,971 0.5% Fines 1,750-1,750 NA Other Tobacco License Fees 25,575-25,575 NA SUBTOTAL $ 448,479,942 $ 137,219 $ 448,342,723 100.0% Distribution: Budget Restoration Fund $ (5,000,000) $ (5,000,000) TOTAL $ 443,479,942 $ 137,219 $ 443,342,723 Notes: Miscellaneous Alcoholic Beverages are Tax Application Fees, cash bonds, certified copies, service charges, sale of confiscated alcohol beverages and seized cash. The Budget Reconciliation and Financing Act of 2012 required transfer of $5 million of Tobacco Tax to the Budget Restoration Fund in FY 2013. Other Tobacco License Fees: manufacturers, wholesalers, and storage warehouse. Fee waived for OTP wholesaler who has a cigarette wholesaler license. OTP licenses effective 5/1/2011. Cigarette license fees paid to special fund for cost of enforcing Cigarette Sales Below Cost Act. State of Maryland - Alcohol and Tobacco Tax Annual Report - 2013 Page 14

ALCOHOLIC BEVERAGES REVENUE Distilled Spirits MONTH 2010 2011 2012 2013 July $ (25,414) $ 3,653 $ 5,103 6,392 August 1,148,602 1,090,974 1,083,729 1,066,315 September 1,172,960 1,241,994 1,265,587 1,354,790 October 1,221,980 1,304,146 1,363,891 1,183,935 November 1,516,280 1,366,632 1,524,607 1,619,166 December 1,341,627 1,466,976 1,416,202 1,465,339 January 1,359,538 1,388,356 1,480,282 1,450,681 February 846,267 830,745 884,267 953,706 March 1,040,027 1,100,065 1,210,285 1,315,482 April 1,438,661 1,375,343 1,405,788 1,261,215 May 1,335,620 1,369,325 1,319,170 1,317,639 June 2,767,433 3,036,738 3,011,570 2,841,669 TOTAL $ 15,163,580 $ 15,574,948 $ 15,970,480 $ 15,836,330 % change from prior year 3.1% 2.7% 2.5% -0.8% Wine MONTH 2010 2011 2012 2013 July $ 3,005 $ 18,148 $ 26,617 33,679 August 410,967 406,500 403,343 433,196 September 425,741 434,383 485,715 512,420 October 430,065 461,712 488,122 466,889 November 501,654 485,983 491,560 536,132 December 529,269 553,074 583,161 605,293 January 577,063 603,349 634,102 615,470 February 371,602 373,505 389,123 439,634 March 426,431 467,562 513,362 483,678 April 528,363 528,103 484,125 485,641 May 462,302 500,049 483,820 485,838 June 933,592 963,936 1,025,659 1,037,728 TOTAL $ 5,600,053 $ 5,796,304 $ 6,008,709 $ 6,135,598 % change from prior year 4.4% 3.5% 3.7% 2.1% Beer MONTH 2010 2011 2012 2013 July $ 48,294 $ 344,561 $ 65,246 65,583 August 847,532 567,119 853,410 899,869 September 833,947 902,866 876,358 836,841 October 805,710 769,338 759,984 696,791 November 712,897 711,291 628,799 685,795 December 635,750 659,421 683,501 743,354 January 647,297 631,047 634,780 645,949 February 606,578 619,395 654,800 619,989 March 649,542 618,286 694,952 643,279 April 792,550 754,757 789,516 690,180 May 768,778 757,634 726,848 779,950 June 1,788,302 1,771,766 1,662,114 1,587,442 TOTAL $ 9,137,176 $ 9,107,481 $ 9,030,310 $ 8,895,022 % change from prior year -1.1% -0.3% -0.8% -1.5% State of Maryland - Alcohol and Tobacco Tax Annual Report - 2013 Page 15

TOBACCO REVENUE Cigarettes MONTH 2010 2011 2012 2013 July $ 11,310,522 $ 10,552,294 $ 8,776,820 8,836,652 August 33,689,372 35,121,420 38,385,802 33,231,779 September 32,967,653 35,870,535 35,357,167 35,351,427 October 34,151,835 32,206,063 35,833,769 29,693,822 November 32,443,647 34,560,962 30,621,552 34,284,437 December 32,598,455 33,096,918 33,523,746 31,585,402 January 32,330,598 27,328,588 29,287,144 30,010,392 February 28,918,341 30,215,600 27,722,118 21,666,630 March 30,050,019 31,190,467 29,864,195 33,494,362 April 32,122,394 30,464,397 33,683,405 30,517,959 May 34,784,800 33,112,054 32,948,361 31,241,965 June 59,538,346 61,539,499 61,699,558 59,397,317 TOTAL $ 394,905,982 $ 395,258,797 $ 397,703,637 $ 379,312,145 % change from prior year 0.2% 0.1% 0.6% -4.6% Other Tobacco Products MONTH 2010 2011 2012 2013 July $ 292,049 $ 326,462 $ 241,261 364,061 August 964,250 1,000,763 949,065 2,831,775 September 898,593 983,739 974,523 3,297,503 October 1,208,771 1,211,352 1,275,966 3,139,577 November 886,496 916,433 920,704 2,826,410 December 853,243 884,507 1,111,746 2,924,140 January 1,153,678 1,159,359 1,106,513 3,086,334 February 801,510 759,072 882,625 2,536,998 March 892,560 1,058,310 988,297 2,035,574 April 1,143,726 1,225,444 1,242,245 3,578,334 May 968,898 923,874 980,644 2,434,011 June 1,878,179 2,054,847 2,130,200 5,098,793 TOTAL $ 11,941,951 $ 12,504,162 $ 12,803,788 $ 34,153,510 % change from prior year 8.8% 4.7% 2.4% 166.7% State of Maryland - Alcohol and Tobacco Tax Annual Report - 2013 Page 16

STATE REVENUE - LICENSES Licenses Issued Revenue FY2013 Annual Fee Collected Total Alcohol License Fees: 46 Application $ 200 $ 9,260 284 330 Renewal 30 8,520 $ 17,780 Manufacturer's Licenses: 5 Distillery (Cost Varies) 6,700 37 Rectifying (Cost Varies) 22,050 2 Winery (Cost Varies) 1,313 68 Limited Winery (Cost Varies) 13,110 18 Brewery (Cost Varies) 22,520 1 Pub-Brewery (Cost Varies) 500 24 Micro-Brewery (Cost Varies) 11,750 2 Farm Brewery (Cost Varies) 350 157 $ 78,293 Wholesaler's Licenses 49 Beer, Wine and Liquor (Cost Varies) 87,870 17 Wine and Liquor (Cost Varies) 28,040 10 Beer and Wine (Cost Varies) 12,313 20 Beer (Cost Varies) 20,665 33 Wine (Cost Varies) 37,833 59 188 Limited Winery (Cost Varies) 2,930 189,650 Railroad Licenses: 2 2 Beer, Wine and Liquor (Cost Varies) 400 400 Steamboat Licenses: 47 47 Beer, Wine and Liquor (Cost Varies) 6,938 6,938 Airplane Licenses: 8 8 Beer, Wine and Liquor (Cost Varies) 1,600 1,600 Caterer's Statewide: 58 58 Alcoholic Beverages (Cost Varies) 106,750 106,750 Cigarette Licenses: 21 Manufacturer 25 525 51 Wholesaler 750 38,250 40 Subwholesaler (Cost Varies) 19,708 1 Vendor 500 500 1 Storage Warehouse 25 25 8 Application Fee 200 1,600 103 225 Renewal Fee 30 3,090 Other Tobacco Products Licenses: 3 Manufacturer 25 75 102 Wholesaler 250 25,500-105 Storage Warehouse 25-63,698 25,575 1120 Total Licenses Issued $ 490,683 State of Maryland - Alcohol and Tobacco Tax Annual Report - 2013 Page 17

STATE REVENUE - ALCOHOL PERMITS Permits Issued Revenue FY2013 Annual Fee Collected 417 Alcohol Awareness Instructor $ 5 $ 2,085 23 Alcohol Awareness Program 15 345 56 Brewery Special Event 25 1,400 143 Bulk Transfer 200 28,600 96 Change of Domicile 5 480 7 Charity Wine Auction 10 70 748 Direct Wine Sellers 200 149,600 4 Common Carrier 100 400 3 Family Beer and Wine 400 1,200 9 Import and Export 75 675 65 Individual Storage 50 3,250 41 Individual Transportation 10 410 6 Non-Beverage 50 300 1,319 Non-Resident Dealer 200 263,700 7 Non-Resident Storage 500 3,500 45 Non-Resident Winery 50 2,250 7 Private Bulk Sale 25 175 21 Public Storage 75 1,575 16 Public Storage and Transportation 200 3,200 493 Public Transportation 75 36,975 16 Resident Dealer 200 3,200 2,817 Solicitor 50 140,850 46,653 Vehicle Identification Cards 10 466,530 5 Wine Exhibition 50 250 41 Winery Offsite Permit 100 4,100 251 Winery Special Event 25 6,275 53,309 $ 1,121,395 Notes: (1) The permit year begins November 1st and ends the following October 31st. (2) Direct Wine Shipper Permit effective July 1, 2011. State of Maryland - Alcohol and Tobacco Tax Annual Report - 2013 Page 18

PER CAPITA CONSUMPTION ALCOHOL BEVERAGES Per Capita Gallons Per Capita Gallons Distilled Distilled County Spirits Wine Beer County Spirits Wine Beer Allegany 1.78 1.41 24.03 Harford 1.51 2.42 17.23 Anne Arundel 2.25 3.96 19.63 Howard 1.48 2.96 12.25 Baltimore 1.93 2.72 15.53 Kent 2.46 3.96 23.41 Baltimore City 2.35 2.31 18.70 Montgomery 1.06 2.47 9.51 Calvert 1.95 2.74 19.79 Prince George's 1.73 1.57 13.85 Caroline 1.53 1.44 21.59 Queen Anne's 2.06 1.80 23.93 Carroll 1.60 2.67 18.84 St. Mary's 1.59 1.25 17.61 Cecil 3.02 3.18 27.03 Somerset 1.08 1.25 14.81 Charles 2.06 1.72 15.30 Talbot 2.41 5.90 19.49 Dorchester 1.62 1.84 22.47 Washington 1.91 1.69 20.64 Frederick 1.71 2.58 17.97 Wicomico 1.05 1.93 19.68 Garrett 2.40 2.55 26.49 Worcester 7.40 5.52 56.33 Note: These figures are based on deliveries to retail licensees in the subdivisions by Maryland wholesaler licensees. State of Maryland - Alcohol and Tobacco Tax Annual Report - 2013 Page 19

PER CAPITA TAX DOLLARS AND CONSUMPTION ALCOHOLIC BEVERAGES AND CIGARETTES Per Capita Tax Dollars (Based on Net Revenue) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Distilled Spirits $ 2.344 $ 2.369 $ 2.440 $ 2.522 $ 2.551 $ 2.611 $ 2.661 $ 2.698 $ 2.722 $ 2.674 Wine 0.829 0.864 0.869 0.908 0.929 0.952 0.983 $1.004 1.024 1.036 Beer 1.713 1.685 1.683 1.677 1.682 1.614 1.603 $1.570 1.539 1.502 Total $ 4.886 $ 4.918 $ 4.992 $ 5.107 $ 5.162 $ 5.177 $ 5.247 $ 5.272 $ 5.285 $ 5.212 Cigarettes $ 48.086 $ 48.096 $ 48.403 $ 47.786 $ 60.614 $ 69.992 $ 69.288 $ 68.454 $ 67.785 $ 64.039 Per Capita Consumption in Gallons (Based on Deliveries to Retailers) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Distilled Spirits 1.555 1.581 1.620 1.670 1.686 1.729 1.771 1.787 1.794 1.802 Wine 2.039 2.100 2.132 2.221 2.276 2.324 2.404 2.450 2.497 2.498 Beer * 18.714 18.453 18.496 18.226 18.285 17.962 17.691 17.162 16.743 16.170 Total 22.308 22.134 22.248 22.117 22.247 22.015 21.866 21.399 21.034 20.470 Cigarettes 48.931 48.766 48.944 48.262 43.251 35.441 35.022 31.731 34.220 32.359 * Based on Maryland Department of Health population estimates. Sources: (1) U.S. Census Bureau, http://quickfacts.census.gov (2) Brief Economic Facts - Counties of Maryland and Baltimore City Maryland Department of Business & Economic Development State of Maryland - Alcohol and Tobacco Tax Annual Report - 2013 Page 20

CIGARETTE SALES STATEWIDE Cigarettes (Packs of 20)* 191,670,000 Note: Sales by political subdivisions are not available for cigarettes WHOLESALE ALCOHOLIC BEVERAGES SALES Deliveries Statewide Total Gallons Deliveries by Political Subdivision Distilled Spirits 10,676,172 Wine 14,796,654 Beer 95,775,916 Distilled Spirits Wine Beer Allegany 131,384 104,312 1,778,794 Anne Arundel 1,239,847 2,179,724 10,806,958 Baltimore 1,577,878 2,223,675 12,695,135 Baltimore City 1,462,726 1,433,556 11,618,531 Calvert 175,035 245,412 1,773,872 Caroline 49,901 47,212 706,261 Carroll 266,788 446,738 3,150,634 Cecil 307,620 322,961 2,749,123 Charles 309,844 259,239 2,303,543 Dorchester 52,642 59,936 731,516 Frederick 409,682 618,785 4,305,642 Garrett 71,652 76,083 790,806 Harford 374,925 602,394 4,284,570 Howard 443,763 886,275 3,669,491 Kent 49,701 79,983 472,626 Montgomery 1,065,713 2,476,916 9,554,052 Prince George's 1,521,658 1,379,089 12,205,707 Queen Anne's 99,866 169,601 1,163,003 St. Mary's 173,530 196,116 1,919,564 Somerset 28,372 32,759 388,743 Talbot 91,991 224,783 742,534 Washington 284,248 252,052 3,078,822 Wicomico 105,752 194,452 1,980,729 Worcester 381,654 284,601 2,905,260 TOTALS 10,676,172 14,796,654 95,775,916 State of Maryland - Alcohol and Tobacco Tax Annual Report - 2013 Page 21

MARYLAND WINERY GALLONAGE SALES Fiscal Sales Sales to Sales to Sales % Year Retailers Winery Samples Wholesalers Out-of-State Other Total Change 2003 13,504 49,785 7,472 40,765 1,312 0 112,838 13.2 % 2004 16,996 56,705 6,172 58,377 828 0 139,076 23.3 2005 20,802 62,497 4,919 72,328 1,035 201 161,783 16.3 2006 21,879 71,292 5,193 92,447 865 183 191,859 18.6 2007 13,748 84,295 6,205 123,123 1,167 119 228,658 19.2 2008 19,678 97,871 6,872 144,876 910 73 270,280 18.2 2009 31,657 101,735 9,451 133,867 1,279 129 278,117 2.9 2010 39,256 100,329 9,620 154,998 5,361 102 309,666 11.3 2011 34,125 117,148 12,438 179,294 2,188 406 345,599 11.6 2012 33,896 117,748 15,070 147,182 2,714 232 316,842 (8.3) 2013 36,808 140,918 16,594 144,554 4,508 1,298 344,680 8.8 % State of Maryland - Alcohol and Tobacco Tax Annual Report - 2013 Page 22

MARYLAND BREWERY GALLONAGE SALES Fiscal Sales at the Sales To Sales Consumed Returned To % Year Brewery Wholesalers Out-of-State On Premise Brewery Total Change 2003 368,717 606,415 970,878 5,998 (4,836) 1,947,173 2.5 2004 364,969 526,071 613,586 2,595 (1,725) 1,505,497 (22.7) 2005 343,529 638,157 738,342 1,561 (3,584) 1,718,005 14.1 2006 311,843 691,824 936,465 1,068 (2,996) 1,938,204 12.8 2007 429,717 580,387 1,557,511 75 (4,517) 2,563,173 32.2 2008 322,611 499,096 1,539,660 0 (3,204) 2,358,163 (8.0) 2009 319,997 491,198 1,617,973 0 (2,956) 2,426,213 2.9 2010 451,356 774,777 1,647,804 3,210 (29,658) 2,847,489 17.4 2011 260,647 1,045,959 2,253,338 2,875 (46,330) 3,516,489 23.5 2012 340,295 1,277,382 2,294,544 9,880 17,387 3,939,488 12.0 2013 390,701 1,599,903 2,562,829 20,634 15,372 4,589,440 16.5 % State of Maryland - Alcohol and Tobacco Tax Annual Report - 2013 Page 23

SUMMARY OF ACTIVITIES Audits Completed: Brewery (Maryland) 27 Beer Wholesaler (Maryland) 36 Rectifier, Distillery or Winery 38 Liquor and Wine Wholesaler (Maryland) 42 Cigarette Wholesaler 41 Other Tobacco Products 13 197 Inspection and Verification of Monthly Returns and Reports: Maryland Manufacturer and Wholesaler: Brewery Tax Return 467 Beer Wholesaler Report 673 Distilled Spirits and Wine Tax Returns 2,516 Railroad, Steamboat and Airline Tax Returns 290 Out-of-State Brewer Tax Return 2,412 Out-of-State Wineries Tax Return 450 Cigarette Wholesaler Monthly Report 537 Cigarette Manufacturer Sample Tax Return 163 Cigarette Stamp Purchases and Payments Return 503 Other Tobacco Products Tax Return (Wholesaler) 1,344 Other Tobacco Products Tax Return (Retailer) 323 Direct Wine Shippers 2,972 OTP Floor Tax 3,929 16,579 Refund Claims Verified and Approved: Amount No. of Claims Alcoholic Beverages (Non-Military) Beer: $ 2,379.55 12 Wine: $ 890.93 4 Distilled Spirits: $ 290.87 2 Cigarettes: $ 84,709.71 5 All other claims: $ 3,598.05 9 Other tobacco products: $ 27,722.06 12 Floor Tax: $ 12,510.45 67 Escrow: $ 30,394.16 199 310 Other Reports: Auditor s reports reviewed and entered 197 Credit Control Reports received and checked 6,006 Returned check reports received and checked 388 Keg books 913 Public storage-transportation reports 307 Import-Export, Non-resident storage reports 73 7,884 Total 24,970 State of Maryland - Alcohol and Tobacco Tax Annual Report - 2013 Page 24

BULK TRANSFER PERMITS Under Article 2B, 2-101(f), a person whose license has expired or otherwise has been discontinued may, within 60 days, obtain a bulk transfer permit in order to transfer with or without consideration whether by sale, gift, inheritance, assignment or otherwise, the stock of alcoholic beverages on hand as of last day the license was effective. The fee for a bulk transfer permit is $200. The table below indicates the number of bulk transfer permits issued in the respective jurisdictions, an approximate 17.3% decline from the prior year. Allegany County City of Annapolis Anne Arundel County Baltimore City Baltimore County Calvert County Caroline County Carroll County Cecil County Charles County Dorchester County Frederick County Garrett County Harford County Howard County Kent County Montgomery County Prince George s County Queen Anne s County St. Mary s County Somerset County Talbot County Washington County Wicomico County Worcester County Total: 4 1 10 18 26 2 1 9 1 6 1 5 2 6 7 0 15 12 0 2 2 1 3 5 4 143 State of Maryland Alcohol and Tobacco tax Annual Report 2013 Page 25

STATE OF MARYLAND AREA AND POPULATION CHART Land Area in Square Miles Population Allegany County 424 74,012 Anne Arundel County 415 550,488 City of Annapolis 7 38,620 Baltimore County 598 817,455 Baltimore City 81 621,342 Calvert County 213 89,628 Caroline County 319 32,718 Carroll County 448 167,217 Cecil County 346 101,696 Charles County 458 150,592 Dorchester County 541 32,551 Frederick County 660 239,582 Garrett County 647 29,854 Harford County 437 248,622 Howard County 251 299,430 Kent County 277 20,191 Montgomery County 491 1,004,709 Prince George's County 483 881,138 Queen Anne's County 372 48,595 St. Mary's County 357 108,987 Somerset County 320 26,253 Talbot County 269 38,098 Washington County 458 149,180 Wicomico County 374 100,647 Worcester County 468 51,578 Total 9,714 5,923,183 Sources: (1) U.S. Census Bureau, http://quickfacts.census.gov (2) Brief Economic Facts - Counties of Maryland and Baltimore City Maryland Department of Business & Economic Development State of Maryland - Alcohol and Tobacco Tax Annual Report - 2013 Page 26

STATE OF MARYLAND ALCOHOLIC BEVERAGE RESTRICTIONS Frederick County Beer Only: Districts: 14th, 17th, and 22nd Restrictions: 3rd District of Middletown. See Article 2B, 8-211(d-1) No Alcoholic Beverages: Districts: 6th, 10th, 16th, 19th, and 23rd All Alcoholic Beverages Permitted: Districts: 1st, 2nd, 4th, 5th, 7th, 8th, 9th, 11th, 12th, 13th, 15th, 18th, 20th, 21st, 24th, 25th, 26 th Montgomery County No Alcoholic beverages: 12th District (Damascus), Barnesville, Kensington, Laytonsville, Washington Grove, and City of Takoma Park. Certain exceptions apply. See Article 2B, 8-216 State of Maryland-Alcohol and Tobacco Tax Annual Report- 2013 Page 27