N.M. Code R. § 15.10.70.8

Current through Register Vol. 35, No. 11, June 11, 2024

Section 15.10.70.8 - OPERATION AND PROFITING BY AUTHORIZED PERSONS

A. No person other than the licensee or lessee or employees of the licensee or lessee, shall sell or serve alcoholic beverages at the licensed premises.

(1) All orders, sales, service, dispensing, delivery and receipt of payment for alcoholic beverages must be completed by the licensee or lessee, or employees of the licensee or lessee, or the employees of a third-party delivery licensee contracted with for delivery purposes.

(2) Sales of alcoholic beverages by a licensee or lessee may not be combined with any sales of another person or entity that is not the licensee or lessee. Nothing in this section shall prohibit the a licensee and a third-party delivery licensee from contracting for the delivery of alcoholic beverages to consumers.

B. Only the licensee or lessee shall directly profit from the sale of alcoholic beverages sold pursuant to a license. A person directly profits from the sale of alcoholic beverages in violation of this rule when any person other than the licensee or lessee receives any portion of the profits earned, or receipts, from the sale of alcoholic beverages, except for:

(1) the payment of rent for the licensed premises based in whole or in part on a percentage of the licensee's gross sales;

(2) the payment to employees of incentive compensation based upon a percentage of gross sales;

(3) revenues received by an affiliate of the licensee from the sale of products other than alcoholic beverages on the licensed premises;

(4) revenues split by a liquor licensee and its lessee pursuant to a hotel management agreement approved by the division, provided that operational control of the licensed premises remain at all times with the lessee and the split of revenue is reasonable;

(5) such other reasonable splitting of revenues specifically approved by the director, who may require additional disclosures and sworn statements as condition for such approval; or

(6) such agreements reviewed and approved by the division in regards to licensees and third-party delivery licensees contracting for delivery services to consumers.

C. Except as provided in this part, it is a violation of the act for any licensee to divide, split, or in any way share the right to sell alcoholic beverages, with any person not named as a licensee on the license.

D. Upon 30 days' written notice, a licensee shall demonstrate compliance with this rule. Failure to demonstrate compliance will result in initiation of proceedings against the licensee by the director, pursuant to Section 60-6C-1 NMSA 1978 et seq. Evidence of compliance will be provided as follows:

(1) proof that all employees are paid by the approved operator or that the employees are providing such services as bona fide volunteers, consisting of copies of canceled paychecks or equivalent documents for the most recent three-month period; and

(2) proof that receipts of the licensed business are deposited directly into a bank account in the sole name of the approved operator, consisting of copies of bank records showing deposits and the name of the approved operator and signatories on the account; and

(3) proof of operation by the licensee or lessee, consisting of copies of all real estate lease agreements, concession agreements, management agreements, contracts for delivery or contracts of any kind to which the licensee or lessee is a party with other persons for operation or profit-sharing in the operation; and

(4) proof that receipts of the business are not shared with non-licensed parties, consisting of copies of all canceled checks for the most recent three-month period with explanations of payments to persons other than suppliers, the approved operator, or employees of the approved operator.

N.M. Code R. § 15.10.70.8

7/15/99; Recompiled 12/31/01, Adopted by New Mexico Register, Volume XXVIII, Issue 08, April 25, 2017, eff. 4/25/2017, Amended by New Mexico Register, Volume XXXII, Issue 18, September 28, 2021, eff. 9/28/2021