(1) For purposes of this section: (a) (i) "Landed case cost" means the sum of: (A) the cost of the product; (B) inbound shipping costs the department incurs; and (C) case handling costs the department incurs. (ii) "Landed case cost" does not include the outbound shipping cost from a warehouse of the department to a state store. (b) "Proof gallon" means the same as that term is defined in 26 U.S.C. Sec. 5002. (2) Except as provided in Subsections (3), (4), and (7): (a) spirituous liquor sold by the department within the state shall be marked up in an amount not less than 88.5% above the landed case cost to the department; (b) wine sold by the department within the state shall be marked up in an amount not less than 88.5% above the landed case cost to the department; (c) heavy beer sold by the department within the state shall be marked up in an amount not less than 66.5% above the landed case cost to the department; and (d) a flavored malt beverage sold by the department within the state shall be marked up in an amount not less than 88.5% above the landed case cost to the department. (3) (a) Liquor sold by the department to a military installation in Utah shall be marked up in an amount not less than 17% above the landed case cost to the department. (b) Except for spirituous liquor sold by the department to a military installation in Utah, spirituous liquor that is sold by the department within the state shall be marked up 49% above the landed case cost to the department if: (i) the spirituous liquor is manufactured by a manufacturer producing less than 30,000 proof gallons of spirituous liquor in a calendar year; and (ii) the manufacturer applies to the department for a reduced markup. (c) Except for wine sold by the department to a military installation in Utah, wine that is sold by the department within the state shall be marked up 49% above the landed case cost to the department if: (i) (A) except as provided in Subsection (3)(c)(i)(B), the wine is manufactured by a manufacturer producing less than 20,000 gallons of wine in a calendar year; or (B) for hard cider, the hard cider is manufactured by a manufacturer producing less than 620,000 gallons of hard cider in a calendar year; and (ii) the manufacturer applies to the department for a reduced markup. (d) Except for heavy beer sold by the department to a military installation in Utah, heavy beer that is sold by the department within the state shall be marked up 32% above the landed case cost to the department if: (i) a small brewer manufactures the heavy beer; and (ii) the small brewer applies to the department for a reduced markup. (e) The department shall: (i) for purposes of Subsections (3)(b) and (c), calculate the production amount of a manufacturer: (A) by, if the manufacturer is part of a controlled group of manufacturers, including the combined volume totals of spirituous liquor, wine, or cider, as applicable, for all manufacturers that constitute the controlled group of manufacturers; and (B) without considering the manufacturer's production of any other type of alcoholic product; and (ii) verify that a manufacturer meets a production amount described in Subsection (3)(b) or (c) and the production amount of a small brewer under a federal or other verifiable production report. (f) A manufacturer seeking to obtain a reduced markup under Subsection (3)(b), (c), or (d), shall provide to the department any documentation or information the department determines necessary to determine if the manufacturer is part of a controlled group of manufacturers. (g) The department may, at any time, revoke a reduced markup granted to a manufacturer under Subsection (3)(b), (c), or (d), if the department determines the manufacturer no longer qualifies for the reduced markup. (4) Wine the department purchases on behalf of a subscriber through the wine subscription program established in Section 32B-2-702 shall be marked up not less than 88.5% above the cost of the subscription for the interval in which the wine is purchased. (5) The department shall deposit 10% of the total gross revenue from sales of liquor with the state treasurer to be credited to the Uniform School Fund and used to support the school meals program administered by the State Board of Education under Section 53E-3-510. (6) (a) Each month, the department shall collect from each package agency located at a manufacturing facility owned or operated by a person licensed under Chapter 11, Manufacturing and Related Licenses Act, 12.295% of the package agency's reported monthly revenue and deposit the money as follows: (i) 1.695% of the reported monthly revenue into the Alcoholic Beverage Control Act Enforcement Fund; (ii) 10% of the reported monthly revenue into the Uniform School Fund and used to support the school meals program administered by the State Board of Education under Section 53E-3-510; and (iii) 0.60% of the reported monthly revenue into the Underage Drinking Prevention Media and Education Campaign Restricted Account. (b) The department may collect a fee established in accordance with Section 63J-1-504 from a package agency described in this subsection to cover the costs of regulation. (7) This section does not prohibit the department from: (a) selling discontinued items at a discount; or (b) rounding the price of liquor in accordance with Section 32B-2-213. (8) The Legislature shall annually appropriate to support substance use disorder treatment services, an amount equal to the revenue generated from a 0.5% markup above the landed case cost to the department on spirituous liquor.
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