FY20 Gross Liquor Sales Training & Important Dates

ALOHA! FY20 Gross Liquor Sales (GLS) Webinar Training Session 1 Manufacturer, Wholesale, Retail Presented by Akiko Reyes Liquor Control Auditor II

Appointment Required Our temporary office, Suite 111 (1st Floor), is open to the public, with all service BY APPOINTMENT ONLY GLS Report Review Additional License Fee Payment by Credit Card or Cash GLS Report Drop-off Go to our website http:www.honolulu.gov/liq/gls/html to schedule 2

Important Dates GLS Report Due Friday, July 31, 2020 GLS Additional License Fee Due Friday, October, 30, 2020 * * * This year only * * *

What is Considered Late? Report submitted or postmarked after 7/31/20 Report submitted on time, but the additional license fee was not fully paid by the extended deadline 10/30/20 Report with issues Not resolved by 10/30/20 Do NOT fax or email your GLS Report !

What happens if you file your report late, do not file, or failed to pay by the deadline One day late . 1. You will receive a citation 2. You may have to attend hearings 3. You may pay a penalty ($150 - $1,000+) 4. You may be selected for an audit

FY20 Additional License Fee Payment Additional Payment deadline: Extended to Friday, October 30, 2020, for this year only. The 2.35% service fee is waived for all credit card payments made by Friday, October 30, 2020. You may make multiple payments using various payment methods. You are liable to pay the full amount even if you cancel your license before October 30, 2020. Recommendation: Try to make payment at least once a month. 6

Gross Liquor Sales How to Calculate Additional License Fee using a fillable form 7

Auto Calculated * Check if payment is enclosed Definition of Gross Liquor Sales (GLS) Gross sales means the total receipts actually received from the sale of liquor without the deduction on account of the cost of property sold or expenses of any kind. (Ref. HRS 281-1) 8

Additional License Fee Due (Gross Liquor Sales Deductible) x Assessment Rate = Additional License Fee Due If GLS < $150,000* = No Additional License Fee Due * Pro-rated Deductible will be applied for partial filing 9

1. Line 1 Total Liquor Sales You need You must retain Financial Records Source Documents Source documents are records that capture original transactions in detail. Source documents are prepared at the time of the transaction and used to verify financial records. Financial records are used to prepare GLS report. If audited, accuracy of your financial records will be verified with source documents. Examples of Financial records: Examples of Source Documents: * Financial Statements (i.e. Profit & Loss & Balance Sheet) * Sales/Purchase Report * POS Report * Cash Register Tapes (Z-tapes) * Customer Invoices * POS reports * Pre-numbered Chits * Original Liquor Purchase Invoices * Cancelled Checks

If you encounter Issues POS System Cash Register System Unsure which sales total to report: gross sales vs. net sales. Cash register was not properly set up with different sales department keys (food, liquor, non-liquor, etc.) or used one department to key to record all sales and cannot determine total liquor sales. Total comps on the report includes discounts, food comps and cannot determine liquor comps. Total bottle fee includes bottle fee for non-liquor items (water, soda, etc.) Total bottle fee includes bottle fee for non-liquor items (water, soda, etc.) Did not record complimentary drinks/samples Call (808) 768-7343 Email liq-auditing@honolulu.gov Don t have any reports?

Line 1 Total Liquor Sales (P&L, Annual Sales Report, POS) Enter Total Liquor Sales for the reporting period 1. Line 2 General Excise Tax (4.712%; 0.5%) Enter the amount of the General Excise Tax assessed to customers on the total liquor sales reported on Line 1. 2. Line 3 Liquor Bottle Fees (6 cents) Enter the amount of liquor bottle fees assessed to customers on the total liquor sales reported on Line 1. 3. 4.Line 4 Complimentary Drinks / Samples (Full Sales Value) Enter the full sales value of complimentary drinks and/or free samples provided to customers. If there is no sales price related to the complimentary drink or sample, enter the value at four (4) times the amount of liquor purchased. (ref. 3-81-17.54(f))

Check Payment Accept Licensee s Company Check Only City and County of Honolulu Lic. #L0600 GLS payment Don t forget to sign Don t forget to sign Honolulu Liquor Commission Attn: GLS Processing 711 Kapiolani Blvd., Suite 600 Honolulu, Hawaii 96813-5249 Please mail your check to 13

Cost of Liquor Sold Required to complete this section 14

Retail Class (D) Auto Calculate Wholesale Class (C) Manufacturer Class (A) 15

Cost of Liquor Sold (COLS) IMPORTANT: If you did not take a physical inventory, as long as your business maintained approximately the same amount of inventory throughout the year, you may enter the same amount on both beginning and ending inventory, and report total purchases as your COLS. (Total purchases = COLS) If you use a perpetual inventory system that records real-time transactions of liquor products received and sold, you may enter zero on beginning and ending inventory and enter your COLS in total purchases (Line B) 16

A. Line A - Beginning Liquor Inventory as of July 1 Enter the beginning liquor inventory as of July 1. It should be the ending inventory as of June 30 reported on the last year s GLS report B. Line B * Retailer - Enter the total amount of liquor purchased during the fiscal year * Wholesale Enter the total amount of liquor costs for the fiscal year * Manufacturer Enter the total costs of the finished products ready for sale C. Line C - Ending Liquor Inventory as of June 30 Take a physical count of your liquor inventory as of June 30, and enter the cost value D. Line D - Cost of Liquor Sold for the Period (Auto Calculate) Beginning Inventory plus Total Liquor Purchases (Costs) minus Ending Inventory to calculate your Cost of Liquor Sold for the period (Lines A + B - C = COLS) 17

Signature Must be signed by authorized person 18

Authorized Signature Required The report must be signed by the owner, partner, corporate officer, member, or authorized agent registered with the Honolulu Liquor Commission. It must be submitted with the original signature of the authorized party. No faxed or emailed GLS report will be accepted. (Ref. 3-81-17.54(e)) To register new Authorized Agent or renew Agent status (1 year term), submit Notification of Authorized Agent form (Form No. LIQ-LIC-106) with the GLS report. You may also email the form to LCIS@Honolulu.gov. 19

Audit Related Rule Violations Most 1. Late or Non-filing of GLS Report 2. Inaccurate GLS Report 3. Not maintaining adequate books and records 4. Unable to provide records for inspection 5. Purchasing liquor from retailers Least

FY20 GLS REPORT CHECK LIST Use a correct form (License Class Annual, Partial, or Temp) Fill in all the required fields Check Payment Enclosed if enclosing a payment An owner, officer, member, or authorized agent must sign the report Must submit GLS report on or before Friday, July 31, 2020 Pay off your additional license fee by Friday, October 30, 2020 Retain your documents for 4 years (Ref. 3-81-17.54(d))

Inspection and Maintenance of Records If audited, you must produce records within 3 calendar days for inspection Records must be kept for 4 years (Ref 3-81-17.54(d)) A Copy of GLS Report Financial Records Source Documents

2020 GLS Report Due Date FRIDAY, JULY 31, 2020 Need assistance? Call (808) 768-7343 Email liq-auditing@honolulu.gov Website http:www.honolulu.gov/liq/gls/html

FY20 GLS Webinar Training Mahalo Akiko Reyes Liquor Control Auditor II (808) 768-7343 Liq-auditing@honolulu.gov