Archive for December, 2008
Kentucky On-Site Requirement Invalidated, but Questions Remain
December 31st, 2008
On December 24th, the US Court of Appeals for the Sixth Circuit affirmed, in the Cherry Hill case, the judgment of the district court, invalidating the on-site purchase requirement.
The district court ruled, pursuant to the Supreme Court’s decision in Granholm v. Heald, 544 U.S. 460 (2005), that the in-person purchase requirement in portions of Kentucky’s statutory scheme discriminated against interstate commerce by limiting the ability of out-of-state small farm wineries to sell and ship wine to Kentucky consumers.
Although this decision sets an important precedent, especially in light of a contradictory decision in Indiana, several questions remain unresolved. Despite the justifiably positive news in the press, direct shipping to Kentucky seems unlikely in the near term.
The biggest obstacle is the fact that the common carriers (FedEx and UPS) have not approved the state of Kentucky for direct shipping. Among other reasons for not yet opening up the Bluegrass State, the carriers are not thrilled about dealing with the 53 Dry and 16 Moist counties.
Furthermore, in spite of the recent victory in Massachusetts where the 30,000 gallon capacity cap was declared unconstitutional, the Cherry Hill challenge of the 50,000 gallon capacity cap in Kentucky was not successful. So, even if the carriers approved Kentucky for shipping, only “small farm” wineries would be eligible for a permit.
Corbin Houchins provided great analysis of the original district court ruling two years ago, and I recommend revisiting that post for more information on Cherry Hill. He highlighted an additional question about the two case “per visit” limit, and how that would apply given the unconstitutionality of the on-site visit requirement.
Happy Holidays
December 23rd, 2008
Happy Holidays from the ShipCompliant Team! Thank you so much for your continued support. This picture was taken recently from the rooftop of our office in Boulder, CO.
-Jim, Pawel, Luke, Jane, Kim, Manzi, Elizabeth, Barclay, Kent, Michael, Jason, Jeff, Trent, Sarah, David, Mike, Colin, Ryan and Robb (not pictured: Mackenzie and Jamie)
Tips for Making End of Year Reporting Easier
December 23rd, 2008
Scrooge asks: Do you have tracking numbers for all 2008 Missouri shipments? Are you ready with your TTB IDs for the products you shipped into New York? Are you aware of Wisconsin’s new electronic filing requirement? If so, will you go with the manual Free File of the XML file submission? Did all of your holiday orders ship in 2008, or will some get pushed to January?
Each year, January is a perfect storm of reporting with up to 79 different submissions for monthly, quarterly and annual tax and shipping reports, 50% more than a more typical monthly load of 53. This January brings up to 21 new (or significantly more complex) reports over last January, depending on the number of states (and cities) to which you ship. Some of these reports require extensive information that is not typically stored on an individual order basis and must be collected and tied to each shipment.
We put together a page full of tips and tricks for completing your end of year reporting as painlessly as possible. Click here to read our 5 Tips for Making End-of-Year Direct Shipping Reporting Easier.
Up and Running (So Far)
December 19th, 2008
Happily for the plaintiffs, Judge Zobel’s final judgment in Family Winemakers of California v. Jenkins took the path that seemed most likely from the tone and content of her memorandum and order of 19 November 2008 and leveled up. The judgment entered 18 December 2008 orders the state “to permit wineries of all sizes to apply for licenses under Mass. Gen. Laws ch. 138, § 19F(b),” which does not contain the § 19F(a) disqualification of wineries that have sold to a Massachusetts wholesaler within six months of applying for the license, formerly applicable to all 30,000-gallon-and-over wineries. In her November opinion, the judge had noted that the “choice” to use direct shipment only after abandoning all sales through wholesalers for six months was, in effect, prohibition.
Final judgment does not settle the issue of a possible stay of the injunction pending appeal. The state has 30 days from entry of the judgment to file notice of appeal, which would be a prerequisite to moving for a stay in the trial court and, if unsuccessful there, in the Court of Appeals.
By R. Corbin Houchins, Attorney at Law
Utah Allows Shipment of Wine? Well, Not Exactly
December 18th, 2008
In one of the most regulated and restricted states in the US, residents may now special-order alcohol online. The Utah Department of Alcoholic Beverage Control (DABC) announced that Utah residents may use an online Special Order Form to purchase alcohol that is otherwise unavailable in the State’s liquor stores. The alcohol would then be shipped to a DABC store location of the buyer’s choosing for pickup. Available since September of this year, the system was relatively unknown until recently due to limited exposure.
Residents of Utah may special order from any licensed vendor located in the United States, which includes producers, authorized agents, and wholesalers, among others. For Utahns ordering international products, they must order the product from a licensed US importer. All vendors, of domestic and international products alike, must be registered with the DABC. There is no cost associated with registration. For more information about what type of vendor to order from and how to register as a vendor refer to the website.
After deciding on the product and vendor from whom to purchase, the ordering process is very straightforward. Some important information required for ordering includes the product name, size and vintage and also the specific DABC store location and date desired for pickup. When ordering, Utahns should keep in mind that vendors may not ship products individually and be prepared to order by-the-case. Also, applicable sales taxes (state and local) are paid by the consumer.
Although the order form takes a relatively short amount of time to fill out, delivery takes much, much longer. The buyers should expect delivery 45 days after the DABC receives the price quotation, at the earliest. This is due, in part, to the custom nature of each order.
The fact that Utah, a heavily controlled state, created an easy-to-use order form for residents to purchase almost any alcoholic beverage available in the US (albeit with a lengthy transaction completion time line) is an acknowledgement of the importance of consumer access and choice. However, it is very important to note that the new special order form does not allow direct shipments to Utah residents because the products may only be picked up at a DABC store.
