JD Key Consulting Logo
Signed Into Law
Signed May 19, 2025Effective 2025-09-01
SB1378

Regular Session

Relating to the powers of certain nonresident seller's permit holders who also hold a winery permit.

Government Affairs & Regulatory Compliance Analysis

SB1378: Government Affairs Overview

SB1378 establishes a strict operational firewall between Nonresident Seller’s Permit holders and Winery Permit holders, prohibiting direct sales between these entities even if they share ownership. While the bill creates a narrow, retroactive exception allowing cross-tier ownership for specific legacy operators (pre-2010), it mandates that all inventory transfers between the two tiers cease immediately upon the effective date.

Sen. Tan Parker·Senate Bill·Regular Session

Moderate
Low Cost
Effective:2025-09-01

Need Help Navigating This Legislation?

JD Key Consulting provides strategic guidance on Texas regulatory compliance and legislative impact for your business.

SB1378
Moderate
Relating to the powers of certain nonresident seller's permit holders who also hold a winery permit.
Moderate Compliance Urgency
Requires near-term attention
Cost Impact
Low
Effective
2025-09-01
Enforcing Agencies
TABC
Primary Author: Sen. Tan Parker
89th Texas Legislature
jdkey.com
01

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

  • Effective Date: September 1, 2025
  • Compliance Deadline: September 1, 2025 (Operations must be bifurcated by 12:01 AM).
  • Agency Rulemaking: TABC is not required to promulgate new rules to enforce the sales prohibition; enforcement will be immediate based on statutory authority. However, guidance on "affiliate" definitions regarding management contracts may be issued in Q4 2025.

Immediate Action Plan

  • 1. Verify Eligibility: Confirm your Winery Permit was issued before May 1, 2010, and verify your location against the 2020 Census data to ensure you qualify for the ownership exception.
  • 2. Sever Supply Chains: Immediately halt all direct product transfers between the Nonresident Seller and the Winery.
  • 3. Restructure Logistics: Route all future inventory needs through a licensed Texas Wholesaler/Distributor.
  • 4. Audit Internal Ledgers: Review Q3 2025 financial records to ensure no inter-company invoices are dated on or after September 1, 2025.

Operational Changes Required

Contracts

  • Inter-Company Supply Agreements: Any Master Supply Agreements (MSA) or purchase orders facilitating the sale of wine from the Nonresident Seller entity to the Winery entity are void as of September 1, 2025. You must execute termination amendments immediately.
  • Distribution Agreements: You must secure third-party wholesaler agreements if the Winery intends to continue stocking brands previously imported by the affiliated Nonresident Seller.

Hiring/Training

  • Procurement Staff: Retrain purchasing managers at the Winery level. They must be blocked from ordering inventory from the affiliated Nonresident Seller.
  • Accounting Staff: Accounts Payable/Receivable teams must be trained to flag and reject any invoices generated between the two entities.

Reporting & Record-Keeping

  • Inventory Segregation: Maintain distinct physical and digital inventory records. Commingling stock is a presumptive violation.
  • Negative Confirmation: Establish an internal audit control to prove zero sales occurred between affiliates. TABC auditors will look for "transfer pricing" schemes disguised as management fees.

Fees & Costs

  • No Statutory Fee Increases: The bill does not increase permit fees.
  • Operational Cost Impact: Margins will decrease for the Winery entity, as they must now purchase inventory through a third-party wholesaler (adding a tier of markup) rather than acquiring it directly from their affiliated importer.

Strategic Ambiguities & Considerations

  • Definition of "Affiliate": The statute relies on TABC’s broad interpretation of "affiliate." Operators using complex holding companies or "shared services" management agreements to obscure the relationship between the Seller and Winery will likely face scrutiny. TABC may view "management fees" that fluctuate with sales volume as a disguised, prohibited sales transaction.
  • Population Bracket Volatility: The ownership exception relies on specific population brackets (130k-150k in a specific county type). If the 2030 Census shifts these figures, the statutory authority for the ownership exception could technically expire without legislative correction.

Need Compliance Guidance on This Legislation?

JD Key Consulting specializes in Texas regulatory compliance strategy. Work directly with James Dickey—former Chairman of the Republican Party of Texas—to understand this bill's impact on your operations and develop an actionable compliance plan.

Schedule a Consultation

Information presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.

02

Legislative Timeline

This bill's path through the Texas Legislature

Filed
Feb 18, 2025
Passed Senate
Apr 10, 2025
Passed House
May 2, 2025
Signed
May 19, 2025
Effective
Sep 1, 2025
TopicsAlcoholic Beverage RegulationPermitsWine & Wineries
03

Senate Authors

Sen. Tan ParkerRepublican · Primary Author

House Sponsors

Rep. Charlie GerenRepublican · Primary Sponsor
Joint Sponsors

Bill Text(with markup)

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

Related Legislation

Explore more bills from this author and on related topics

More from Sen. Tan Parker

View all bills by Sen. Tan Parker

Related by Topic

View more Alcoholic Beverage Regulation legislation
Quick Reference

Frequently Asked Questions

Common questions about SB1378

Q

What does Texas SB1378 do?

SB1378 establishes a strict operational firewall between Nonresident Seller’s Permit holders and Winery Permit holders, prohibiting direct sales between these entities even if they share ownership. While the bill creates a narrow, retroactive exception allowing cross-tier ownership for specific legacy operators (pre-2010), it mandates that all inventory transfers between the two tiers cease immediately upon the effective date.

Q

Who authored SB1378?

SB1378 was authored by Texas Senator Tan Parker during the Regular Session.

Q

When was SB1378 signed into law?

SB1378 was signed into law by Governor Greg Abbott on May 19, 2025.

Q

Which agencies enforce SB1378?

SB1378 is enforced by Texas Alcoholic Beverage Commission (TABC).

Q

How significant are the changes in SB1378?

The regulatory priority for SB1378 is rated as "moderate". Businesses and organizations should review the legislation to understand potential impacts.

Q

What is the cost impact of SB1378?

The cost impact of SB1378 is estimated as "low". This may vary based on industry and implementation requirements.

Q

What topics does SB1378 address?

SB1378 addresses topics including alcoholic beverage regulation, permits and wine & wineries.

Q

What are the key dates for SB1378?

Key dates for SB1378: Effective date is 2025-09-01. Consult with legal counsel regarding applicability.

Q

What are the penalties under SB1378?

SB1378 establishes the following penalties: administrative penalty of Permit suspension or cancellation (Standard TABC sanctions for Code violations) for Sale of wine by a Nonresident Seller's Permit holder (or affiliate) directly to their own Winery Permit.. Consult with legal counsel for specific applicability to your situation.

Need Strategic Guidance on This Legislation?

JD Key Consulting is an Austin, Texas-based government affairs firm led by James Dickey, former Chairman of the Republican Party of Texas. We specialize in Texas regulatory compliance and legislative strategy for data centers, energy, banking, and manufacturing.

Legislative data provided by LegiScanLast updated: January 11, 2026