Archive for November, 2006
Wine Distribution Notes, v11.2
November 30th, 2006
R. Corbin Houchins, Beverage Industry Counsel, just released version 11.2 of his Notes on Wine Distribution. This is a great resource and recommended reading for all that are interested in wine direct shipping. The first sentence of each release describes this resource well:
These notes, now in their thirteenth year, are intended to serve discussion and development of wine distribution options in a changing legal environment, with emphasis on alternatives to three-tier systems.
We will start posting these new releases as soon as they become available.
Sales tax rate decrease in North Carolina
November 27th, 2006
From the North Carolina DOR notice
The North Carolina General Assembly enacted legislation that reduces the general State rate of sales and use tax from 4.5% to 4.25% effective December 1, 2006 and from 4.25% to 4% effective July 1, 2007. Therefore, effective December 1, 2007 2006 the general State rate of sales and use tax will be 4.25%. Effective July 1, 2007, the general State rate will be 4%. Items subject to the general State rate of sales and use tax are also subject to any applicable local rate of sales and use tax. All counties levy a 2.5% local sales and use tax; Mecklenburg County also levies an additional .5% local tax for public transportation.
Compliance Q/A in Kennewick, WA - 11/28
November 22nd, 2006
Welcome to the (brief) second installment of shipping compliance events summary! These events are great opportunities to hear from experts on legislative changes to the rules, best practices for staying compliant and growing your market, special offers on shipping and other related services, and introductions to technology solutions.
November 28th – Washington Wine Industry Summit – Shipping Compliance Q & A
Click here for more information and registration
Three Rivers Convention Center
Kennewick, WA
The free ShipCompliant MapTool
November 13th, 2006
Wine Business Monthly wrote a quick piece this morning about a free tool our team created to help wineries communicate their direct shipping policies in a consistent and brand sensitive manner.
Wineries do not have to be ShipCompliant customers in order to use the free widget that creates a nicely printed PDF map of their OnSite or OffSite direct shipping policies. We have appreciated all the feedback we’ve recieved thus far, so please continue to let us know what you think.
To use the tool, simply select which states you would like to appear on your map, change the titles, upload a logo and choose the colors for your states and you are done. Click here to give it a whirl.
The second wave of the Granholm tsunami
November 7th, 2006
Two states now have court cases that illustrate the second wave of the Granholm tsunami. Explicit discrimination in favor of local wineries relative to out-of-state wineries is, in theory at least, already washed away. We now see another crest on the horizon, aspiring to wipe out de facto discrimination –where the formal text of the challenged regulatory scheme is non-discriminatory, but the result disadvantages interstate commerce. The first case of that category to render a dispositive ruling was Huber Winery v. Wilcher, noted in a previous post.
On October 10, 2006 a federal district court in Tennessee consolidated two cases before it. One is the 2006 S.L. Thomas Family Winery suit, in which both parties have moved for judgment on the pleadings, the plaintiff relying on Granholm, and the state asserting inherent 21st Amendment powers. The state contends that its laws deny direct shipment equally to all wineries, making the suit a de facto discrimination case based on differential inconvenience, similar in that respect to Huber, in which the court rejected the state’s proposed leveling down to on-site sales for all wineries because of the greater burden of visiting a California winery relative to a local winery.
The other case is Jelovsek v. Bredesen, a consumer action filed about a month after the Granholm decision in 2005. In June 2006, the court denied the defendants’ motion to dismiss in Jelovsek, which had argued that a consumer, as distinct from a winery licensee, does not suffer the kind of harm to an interest required for judicial relief. That argument (challenging a plaintiff’s to “standing to sue”) seems unlikely to succeed in a properly conducted Commerce Clause discrimination case, in view of the Granholm opinion’s reference to a consumer right of access to national markets. In any event, the defendants appear to concede that the standing issue has been taken out of the S.L. Thomas Family Winery case by consolidation with Jelovsek.
Compliance Events Summary
November 7th, 2006
Welcome to the first installment of shipping compliance events summary! These events are great opportunities to hear from experts on legislative changes to the rules, best practices for staying compliant and growing your market, special offers on shipping and other related services, and introductions to technology solutions.
November 8th – Wine Institute Sonoma County Member Workshop
http://www.wineinstitute.org/programs/workshops/2006/sonoma-nov.php
Vintners Inn Santa Rosa, CA
8:30 am
November 13th - Wine America Fall Board of Directors & Annual Membership Meeting
http://www.wineamerica.org/meetings/fall.htm
The Inn on the Lake Canandaigua, NY
8:00 am
November 14th - Finger Lakes Direct Shipping Compliance Seminar
http://www.shipcompliant.com/spdr/
Ithaca’s South Hill Business Campus Ithaca, NY
9:00 am
If you know of shipping compliance related events and we’ve missed them, please send an email to comments@shipcompliantblog.com and we’ll get them up there regularly.
Thank you.
FedEx begins shipping to Vermont
November 6th, 2006
From their wine landing page:
FedEx Express and FedEx Ground expands wine shipping services to accept legal wine shipments to consumers into, out of, and within Vermont. The effective date is November 1, 2006. For those shipping wine to VT consumers, please note changes on State Pairing Guide.
Vermont’s consumer direct legislation actually went into effect in May of this year, but this is the first time that a carrier has been approved to ship into Vermont. Licensed wineries can now officially begin shipping. The application requirements and license restrictions are spelled out pretty clearly in Vermont’s instructions on the permit application. In a nutshell, the permit costs $300, there are sales tax, excise tax, and reporting requirements, and a twelve case per calendar year per customer volume limit applies.
More on Georgia sales tax
November 3rd, 2006
A few weeks ago, Annie mentioned that wineries shipping directly to Georgia that do not otherwise have a nexus in Georgia are not required to collect sales tax. We have had a number of questions about this issue, mostly related to the fact that different people have received different answers to this question in the past from Georgia. A few months ago, a representative from the Georgia Department of Revenue gave clear guidance on this in a pair of emails. Responding to the question of whether a winery with no wholesaler in Georgia has to collect sales tax, the representative wrote the following
The simple answer to your question is that the Special Order Shipping License is not conditioned on licencees paying sales tax to the State of Georgia. There is no general requirement saying that these licencees must collect and pay Georgia sales tax on sales. Whether a Special Order Shipping Licensee is subject to sales tax collection requirements must be analyzed on a case by case basis taking into account whether the licensee has a nexus with the State. Relevant questions in the analysis of nexus would include, but not be limited to, whether the licensee has a physical presence in the State such as having an office or having salespeople that are based in the State.
When asked for further clarification on whether the Special Order Shipping License creates a nexus in Georgia by a winery that does not have any presence in Georgia, the winery received the response below
A Special Order Shipping License alone, without any other conditions that would establish a nexus with Georgia, does not establish a nexus. The Georgia law that created the Special Order Shipping License was effective July 1, 2000, not in 2006. The information listed on the Georgia Department of Revenue site www.etax.dor.ga.gov/salestax/salestax_genlinfo.shtml is correct. Tangible personal property (in this case wine) purchased by a Georgia resident via the Internet and delivered to a Georgia address is subject to Georgia sales and use tax regardless of where the vendor is located. The Georgia resident would report and remit Use Tax on Form ST-3USE. The tax rate is based on the county where delivery takes place. You have asked if the consumer does not pay the tax themselves on the purchase of your wine, could this fall back on your winery? Lacking nexus, you would not be required to collect and remit the sales tax; nor would you be required to remit the consumer’s use tax. However, a company that charges and collects the Georgia sales tax must remit that tax to the State of Georgia.
To summarize, any winery can make onsite shipments into Georgia. Only wineries without a distributor in Georgia can receive a Special Order Shipping License and make offsite shipments (as well as onsite shipments). In both cases, the winery is not required to collect or pay sales tax.
