Municipal Law Q&A Test your knowledge of municipal practices and procedures with the questions and answers below. Click here to submit a question to Ancel Glink.
Municipal Q&A - March 2007
Can a municipality regulate the sale of alcoholic beverages over the Internet?
Answer: State and local liquor control regulations apply in regard to both (1) the sale of liquor from outside the municipality for delivery within the municipality, and (2) where the seller is located within the municipality and delivers outside the municipal jurisdiction.
(1) The Illinois Liquor Control Act provides regulatory control of sales outside of Illinois. The statute reads:
Any person manufacturing, distributing, or selling alcoholic liquor who knowingly ships or transports or causes the shipping or transportation of any alcoholic liquor from a point outside this State to a person in this State who does not hold a manufacturer's, distributor's, importing distributor's, or non-resident dealer's license issued by the Liquor Control Commission, ... is in violation of this Act.
235 ILCS 5/6-29.1. The statute bars out-of-state sellers from shipping liquor (except limited amount of wine; see 5/6-29) to either retailers or individual customers. The State Liquor Control Commission enforces the statute by investigating, giving notice to the violator, and, if the violation continues, notifying the State's Attorney of the county where the violation occurred to file a complaint. The penalty provision is for a fine of $1,000 for the first offense, $5,000 for the second, and $10,000 for the third and subsequent offenses.
The General Assembly's findings prefaced to the statute clearly identify the evil to be remedied: the legislature finds that "selling alcoholic liquor from a point outside this State through various direct marketing means, such as catalogs, newspapers, mailers, and the Internet, directly to residents of this State poses a serious threat to the State's efforts to prevent youths from accessing alcoholic liquor; to State revenue collections; and to the economy of this state." 235 ILCS 5/6-29.1. Thus, State law prohibits sale of alcoholic beverages (except wine) over the Internet to residents of Illinois.
(2) As for sales over the Internet from within the municipality, the municipality does have regulatory authority. The municipality may prohibit a licensee from delivering alcoholic beverages by mail or common carrier. There is a significant public policy issue involved: assuring that alcoholic beverages are not delivered into the possession of minors. The State Liquor Act provides:
No express company, common carrier, or contract carrier that carries or transports alcoholic liquor for delivery within this State shall knowingly give or knowingly deliver to a residential address any shipping container clearly labeled as containing alcoholic liquor and labeled as requiring signature of an adult of at least 21 years of age to any person in this State under the age of 21 years. An express company, common carrier, or contract carrier that carries or transports such alcoholic liquor for delivery within this State shall obtain a signature acknowledging receipt of the alcoholic liquor by an adult who is at least 21 years of age.
235 ILCS 5/6-16(a)(ii). The statute contains additional provisions concerning written evidence of the age of the recipient of the delivery, such as a driver's license, and an affirmative defense based on reliance on such identification. The Act does not apply to delivery outside of Illinois, but every other State has similar legislation. Moreover, any State which has enacted a provision similar to §6-16(a)(ii), above, would consider delivery to a resident of that State from an Illinois seller to be prohibited.
Although the Liquor Control Act does purport to regulate delivery of alcohol by requiring a signature of an adult, the statute contains no specific enforcement provision. A delivery of alcohol without obtaining a proper signature would be a "prohibited sale," and perhaps the United Parcel Service or the U.S. Postal Service could be haled into court or before the State Commission to face a charge. But it seems unlikely that a local liquor control commissioner could cite either one for an ordinance violation.
In light of the considerations above, the only type of delivery that could be effectively regulated would be personal delivery by the licensee to the buyer off-premises, along the lines of a pizza delivery to your door. Perhaps there is a way for a municipality to demand that UPS or the U.S. Postal Service obtain a signature and forward that signature, along with evidence of proper identification, to either the shipper or the local liquor commissioner to demonstrate that the delivery complied with the state statute or a regulatory ordinance. But under the Commerce Clause of the U.S. Constitution, it is unlikely that such local regulation of a national carrier could survive. Apart from the Commerce Clause, such a requirement would be very difficult to administer.
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