Massachusetts DTC Applications – How to Get Started

As ShipCompliant reported earlier this week, the new Direct Wine Shipper License application and advisory were released over this past weekend. The new permit law replaces the existing unworkable direct shipping law in its entirety. See the previous post to read more about how the new laws, in effect starting January 1, 2015, apply to wineries.

It is expected to take approximately four weeks for applications to be approved. Wineries may NOT engage in any “sales activities” prior to January 1, 2015. (or their license is approved.) Both the Direct Wine Shipper License application and Direct Wine Shipper License Advisory are available on the Wine Institute, ShipCompliant, and Massachusetts Alcoholic Beverages Control Commission (ABCC) websites. Below please find instructions on how to complete the application process. Questions about the application requirements can be directed to Ralph Sacramone of the ABCC at 617-727-3040 ext. 731 or to Annie Bones at abones@wineinstitute.org.

MASSACHUSETTS NEW DIRECT WINE SHIPPER LICENSE APPLICATION INSTRUCTIONS
Step 1: Register with the Department of Revenue to Pay Sales and Excise Taxes

  • Go to MassTax Connect to Register and Pay Excise Taxes (note the date of registration as you will need to enter this on the DTC application.)

Step 2: Application for a Direct Shipper Wine License (effective 1/1/2015)
Part 1 – Applicant Information and Legal Structure

  • Attach vote by the Board of Directors or LLC Managers appointing a manager or principal representative
  • Articles of Organization as filed with the Secretary of State’s Office

Part 2 – Licenses to Manufacture and Export Wine

  • List and attach a copy of your California 02 Winegrower license

Part 3 – Federal Compliance

  • List and attach a copy of your TTB Basic Permit Number
  • List and attach a copy of your FDA Registration

Part 4 – Tax Registration

  • Enter the date that you registered with the MA Department of Revenue to pay sales and excise taxes

Part 5 – Interests in this License

  • All of the limited partners must be listed

Parts 6-8

  • Follow the application’s instructions and provide affidavit(s) if necessary

Part 9 – Previously Held Interests in Other Licenses

  • All of previously held interests must be listed

Part 10 – Transportation and Delivery

  • FedEx Ground should be listed. FedEx Express and UPS are not licensed to deliver DTC wine shipments to MA consumers at this time. The application can be updated by letter if FedEx Express, UPS or any other common carrier enters the market and intend to use their services.

Part 11 – Proof of Age for Sale to Consumers

  • The Code for Direct Shipping Guidelines (http://freethegrapes.org/code-for-direct-shipping) recommends that direct shippers verify the purchaser’s age at the point of online purchase using an approved age verification vendor, such as LexisNexis or IDology.

Part 12 – Proof of Age for Delivery to Consumers
FedEx Ground Control Processes for Alcohol Shipments: FedEx Ground requires Alcohol Shippers to sign a special contract addendum outlining labeling and information requirements

  • Shippers must use FedEx® ShipManager electronic shipping solutions or an approved third-party system
  • Shippers must enter a unique identifier – $AW, in the “Your Reference” field for all wine shipments
  • Shippers must select Adult Signature Service as a condition of delivery of the shipment
  • All wine packages must be labeled with a FedEx approved alcohol label
  • An Adult Signature Service “code” is embedded in the unique bar code tracking ID
  • Delivery scanners alert drivers of the adults signature requirement at point of delivery scan
  • If no eligible recipient is at the address, the scanner prompts driver to apply the proper status code and reattempt delivery at a later time/date
  • FedEx will obtain a signature from any person at least 21 years old (government-issued photo identification required) at the delivery address
  • Part 13

    • Follow the application’s instructions

    Step 3: Direct Wine Shipper License Application Checklist

    • Check payable to ABCC or Commonwealth of MA for $300
    • Transmittal Form
    • Completed Application
    • Articles of Organization as filed with the Secretary of State’s Office
    • Vote by the Board of Directors or LLC Managers appointing a manager or principal representative
    • A copy of your California 02 Winegrower license
    • A copy of your Federal Basic Permit
    • A copy of your FDA Registration

    Send to:
    Alcoholic Beverages Control Commission
    P.O. Box 3396
    Boston, MA 02241-3396

    Annie Bones, State Relations – Wine Institute

    New Direct Wine Shipper License Applications Now Available for Massachusetts


    As we discussed in a previous post, Massachusetts opening to direct shipping is probably the biggest change that we have seen in direct wine shipping since the Granholm Supreme Court decision of 2005. Over the weekend, the Massachusetts ABCC updated their website with a brief advisory on the new direct shipping law that summarizes the law and provides instructions on how to complete the permit process, and how to comply with the reporting requirements.

    Click here to download the Massachusetts direct shipping application (if you are having trouble downloading the application from the Massachusetts website, click here).

    Here’s a quick summary of the new law:

    • Only wineries that hold a TTB license and a license to produce in and export out of their state can qualify for the Direct Wine Shipper License
    • Each licensed direct shippers can ship up to 12 9-liter cases of wine to any one individual per calendar year
    • Direct shipping reports will be due on an annual basis
    • Sales tax is not due for wine products, but is due for any non-wine items such as merchandise
    • Excise taxes will be due on all shipments

    The 7-page application is fairly straightforward, but in addition to some of the usual information (like business and business owner information), you’ll need to answer a couple out-of-the ordinary questions. Note: We’re working to clarify how to answer a few of the questions with the ABCC, and will update this post once we have more information.

    • First, register with the Massachusetts Department of Revenue to pay sales and excise taxes. You’ll need to include the date you registered with the Massachusetts DOR on the application.
    • List all businesses (carriers) that will deliver wine on your behalf; carriers must hold a Winery Shipment Transportation Permit

      An early concern over the new Massachusetts wine shipping law was that it did not address the issue of common carriers having to license each and every truck that delivers wine. However, a bill to allow common carriers to obtain a fleet license for the delivery of alcohol is pending in the Massachusetts legislature. It seems somewhat unlikely that the fleet license bill will move this session. But, we believe that at least one of the common carriers will begin to license each of their trucks and therefore will be able to deliver wine to Massachusetts addresses as early as the beginning of February.

    • List your winery’s methods for proof of age for sale and delivery to consumers.

      See our informative post on 7 tips for better age verification, listing the different age verification methods for online wine purchases

    • Include with the application a copy of 1) the license(s) you hold which authorize manufacture and exportation of wine; 2) your TTB Permit; and 3) your FDA Registration
    • Finally, include a check for $300. Make the check out to the “Massachusetts ABCC” and denote the name of the licensee

    We expect Massachusetts will represent an extremely important opportunity for wineries. If is approved, a process that may take as long as four weeks, you can start taking orders as soon as January 1, 2015!

    Wine Labels – It’s a Family Thing

    In addition to being a foundational element of society, “Family” also turns out to be an iconic marketing theme. This is perhaps no more so than in the wine industry where the “family winery” or “family estate” seems so omnipresent among wine brands.  In fact, a quick Google search for “family winery” yields 1.7M results — Clif Family, Benziger Family, Mayo Family…

    We decided to look at this theme using LabelVision, ShipCompliant’s online tool that allows searches and monitoring of label approvals going back to 1995.

    Since 1995, 5.8% of all wine labels approved have had the word “family” associated with it, whether as part of the brand name or located somewhere on the back label. That’s over 74,000 approved labels with “family” located on it somewhere.

    Discovered by LabelVision

    Discovered by LabelVision

    But then we started wondering about the WHOLE FAMILY. Of the 1.2 million wine labels approved since 1995 we found that some members of the family are more popular with wine brand owners than others.

    It’s pretty clear that at least where wine labels are concerned, Dad, Mom and Grandfather are getting lots more love than the cousins.

    One thing we should point out about the 73,000 wine labels approved since 1995 with the word “family” included in the label is that this only includes a search for the English spelling of family and does not include use of the word family written in another language. Were we to look for the words “Famille”, “Familia” or “Famiglia” and other common translations we found over 77,000 approved labels.

    ShipCompliant’s LabelVision Tool allows user to identify keywords and receive an email alert whenever that keyword shows up on a new label approval, making this addition to our product line up critical for those looking to protect trademarks. However, as you can see from our investigation of the family, LabelVision is also capable of helping researchers delve into numerous marketing trends.

    Massachusetts, Key Legislative Updates Highlighted at 9th Annual Wine Compliance Virtual Seminar

    –For Immediate Release–

    Virtual seminar addresses wine shipping rule changes and new reporting innovations for wineries.

    Boulder, Colo. — On Tuesday, November 11, ShipCompliant, the leading compliance provider for wine, spirits and beer producers, will hold its 9th annual Direct Shipping Virtual Seminar for wineries. Attendees will learn about recent legislative and regulatory changes affecting wine shipping as well as the newest innovations to help wineries streamline reporting. This year’s seminar also includes best practices for end of year reporting. The online seminar is open free of charge to all members of the wine industry.

    “The opening of Massachusetts represents the most significant opportunity for direct shippers since Granholm.” said Jeff Carroll, ShipCompliant’s Vice President of Product. “The new rules, requirements, and the status of common carrier licensing will be covered on Tuesday.”

    The seminar will take place at 10:00am PST. Hundreds of wine industry representatives attend this seminar each year. ShipCompliant recommends wine club managers, heads of marketing and hospitality, compliance managers, shipping department managers, winery owners, and third party marketers all attend the seminar.

    Online registration for the ShipCompliant Virtual Seminar is available now.

    About ShipCompliant
    Founded in 2002 and located in Boulder, Colorado, ShipCompliant is a leader in automated alcohol beverage compliance services. ShipCompliant provides wine and spirits suppliers and importers with a full suite of web-based software tools to ensure compliance with federal and state regulations for direct and wholesale distribution. ShipCompliant works with the industry’s leading software providers and fulfillment companies to provide fully integrated solutions for direct and three-tier distribution. For more information, please visit: www.shipcompliant.com.

    Media Contact
    Jeff Carroll
    Jeff (at) ShipCompliant (dot) com
    (303) 996-2343

    Ship or Distribute to Indiana? Here’s How to Meet Their New Requirements

    Starting with the October filing period, Indiana requires all alcohol beverage companies working in Indiana to electronically remit monthly excise tax returns and shipment reports. This method for electronic filing and payment is unique to Indiana and does not exist in any other state report.

    ShipCompliant will be holding several webinars over the coming weeks to help you navigate these new requirements.

    Click here to attend a webinar or sign up for a consultation.

    The new Indiana report will be filed automatically for ShipCompliant AutoFile users. All other filers can use the summarized actions below to meet the new Indiana requirements.

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    Step 1: Register with Indiana’s Excise Tax and Bulk Filing Departments

    • Send an email request to Excisetax@dor.in.gov with your FID/FEIN, to obtain your new Alcohol Beverage TID#
    • To register with Indiana’s Bulk Filing Department, send an email request to bulkfiler@dor.in.gov for a certificate of registration.

    Step 2: Download and install the following software needed to E-File

    Step 3: Generate two test .xml files and send to Indiana via the above noted software programs

    Step 4: Set-up electronic payments

    • Electronic Payment set-up is required for those liable for paying taxes, such as wine direct shippers
    • Register for electronic payment at www.in.gov/dor/3976.htm
      Submit a test payment of $0.01 to PNC Bank

    If you want the full set of instructions on Indiana electronic filing start by visiting the Indiana Department of Revenue FAQ page, or contact the department via the information provided on the FAQ page for more info.

    And if this all too much for you to complete by the November due date (during one of the busiest times in the year), have no fear. If you are unable to successfully submit your report through this new bulk-filing process in November, Indiana will accept a paper version of the report for this month only.

    Want to avoid the hassle of reporting to Indiana altogether? Sign up for ShipCompliant AutoFile and let us worry about completing the above steps for you. Learn more about AutoFile today!