Posts from the Permit Instructions Category
The First of May Brings the First of Direct Wine Shipping to the Garden State
May 1st, 2012
Spring brings more than flowers this year for supporters of direct shipping. After three and a half months of anticipation and preparation, the New Jersey Division of Alcoholic Beverage Control posted checklists, forms and applications on their site, making S 3172 a reality for the wine industry. Effective May 1, New Jersey is accepting applications for the Out-of-State Winery License from wineries producing less than 250,000 gallons (roughly 105,000 cases) annually. Annual production dictates the fee for the new license:
- Less than 1,000 gallons – $63
- Between 1,000 and 2,500 gallons – $125
- Between 2,500 and 30,000 gallons – $250
- Between 30,000 and 50,000 gallons – $375
- Between 50,000 and 250,000 gallons – $938
In addition to the listed winery license fees, New Jersey will make out-of-state wineries work hard for entry into the 40th U.S. state to allow direct shipping. The latest information indicates out-of-state wineries must: 1) register their business with the Secretary of State ($125); 2) register their business with the Division of Taxation for payment of state sales and excise taxes; 3) post a beverage tax bond (ranging from $1,000 to $1,000,000 depending on anticipated sales); and 4) submit the license application with the fee, outlined above, to the New Jersey Alcoholic Beverage Control (NJ ABC). New Jersey also requires all products shipped into the state to be brand-registered at a cost of $23 per label.
In an unanticipated twist, corporate laws in New Jersey require any foreign (non-New Jersey) corporation that secures a license from a state agency (for example, a wine shipper’s license from the NJ ABC) to establish nexus with the state. With this nexus, out-of-state winery licensees must also annually file corporate income tax and pay a minimum of $500/year, depending on gross revenues. Partnerships are also subject to a tax of $150/partner/year and annual filing. All wineries applying for the license should be aware that they are subject to this requirement.
On top of direct shipping capabilities for Out-of-State Wineries, with the payment of an additional fee (from $100 to $1000 depending on annual production), licensees may ship directly to New Jersey retailers. Common carriers are not allowed to ship these orders to retailers, and price posting is required on products for sale to retailers. Additionally, licensees have the option to open up to 16 tasting rooms within New Jersey for a fee of $250/site.
Here are the forms referenced in New Jersey’s checklist and instructions, in order of appearance:
- Register for taxes
- Obtain a Beverage Tax Bond
- Complete the Out-of-State Winery License Application
- For each label, complete the Brand Registration Application (Instructions)
- Bi-monthly, file the Alcoholic Beverage Tax Return with Supplemental Schedule
We realize that the application process in New Jersey is a little daunting, so ShipCompliant has already geared up EasyWineLicensing.com to facilitate the licensing process. Visit www.easywinelicensing.com before May 15th with the coupon code “EWLNJ” and save 35% off ShipCompliant service fees to obtain a New Jersey direct shipping license.
Kansas Issues Revenue Ruling and Amends License Term
September 20th, 2010
Governor Parkinson of Kansas signed SB 452 into law, changing the license term for a Special Order Shipping License from one year to two years. The legislation became effective on July 1, 2010. The fee for a new Special Order Shipping License was adjusted to $150 to reflect the new two-year license term. Current holders of a Special Order Shipping License are now required to renew their license for a period of two years and pay a $110 fee. Wineries applying for a new license have two options. Option 1) Pay the two year license fee in full. Option 2) Pay half of the license fee plus the registration fee with their application and pay the remaining half of the license fee plus a 10% surcharge within one year of the date the license was issued. It should be noted that a failure to pay the remaining license fee and 10% surcharge by the due date will result in the automatic cancellation of the license.
On August 23, 2010 the Kansas Department of Revenue issued Revenue Ruling, No. 19-2010-03 which states that taxpayers are not required to remit alcoholic beverages gallonage tax due and owing for the reporting period, if the amount is less than $5. The change in policy was made due to the administrative costs associated with processing payments of less than $5. The ruling does not exempt a licensed direct shipper from any reporting requirements. The reporting period for Special Order Shipper Licensees is one calendar year. Gallonage reports are due no later than January 15th of the following year.
The Special Order Shipping License is required for all offsite shipments to consumers in Kansas and requires wineries to use an approved age verification service and to pay enforcement tax and gallonage tax when applicable. The shipping license is not required for on-site sales. Any winery may ship to a Kansas consumer that purchases wine when visiting their tasting room. Applications and additional direct shipping information is available on the Wine Institute website.
-Annie Bones, State Relations, Wine Institute
The Lone Reciprocal State
August 5th, 2010
New Mexico Stands Alone
In 2004, 13 states had wine shipping reciprocity provisions. Essentially, reciprocal states allowed any winery to ship into their state as long as that winery’s state allowed an equal reciprocal privilege. The Granholm decision of 2005 effectively declared reciprocity unconstitutional (pop quiz: would reciprocity provisions be beyond challenge if HR 5034 passed?). Since then, 12 of the 13 reciprocal states have adopted permit systems that allow wineries from any state to ship in as long as they stay in compliance with the direct shipping rules. Now that Iowa’s new permit system is live, New Mexico stands alone as the only remaining reciprocal state. Previous attempts to bring New Mexico into compliance with Granholm have to date been unsuccessful, so the reciprocity statutes remain in effect.
Don’t Forget to Remit Iowa Excise Taxes
Speaking of Iowa, effective July 1st wineries from any state (previously the reciprocity provision restricted the states from which wineries could ship into Iowa) can ship into Iowa so long as they are actively licensed as a "Wine Direct Shipper". Licensed shippers are required to remit excise tax monthly to the Iowa Department of Commerce – Alcoholic Beverages Division (ABD), and the first excise tax report is due this month. Each monthly report should be postmarked by the 10th of the month.
Although it’s possible that electronic filing may be available in the near future, for now the ABD is requiring that licensees complete the Report of Wine Shipments to Iowa Consumers spreadsheet, print it out, and mail it to:
Iowa Dept. of Commerce, Alcoholic Beverages Divisions
ATTN: Tax Division
1918 S. E. Hulsizer Road
Ankeny, IA 50021.
The form is fairly self-explanatory. For each shipment, licensees fill out the name and address of the recipient, the date of shipment, invoice number, total gallons of wine shipped, the shipping company (UPS, FedEx Express, or FedEx Ground), the amount of wine tax owed (multiply total gallons by $1.75), the permit number of the shipping company (UPS=AC0000003, FedEx Express=AC0000002, and FedEx Ground=AC0000001), and the tracking number of the package(s) that shipped. Reporting the tracking number and shipping company is not new to wineries as New York, Missouri, and Virginia all require one of the two data points.
Once you have completed filling out the spreadsheet, print out the completed form and make your payment out to “Iowa Alcoholic Beverages Division”. Stuff your envelope with the form and the check, and make sure it is postmarked by August 10th!
Set Your Sights on the Hawkeye State: Get Started by Applying for a Direct Shipping License in Iowa
June 14th, 2010
The direct shipping applications for Iowa are now available. As of July 1, 2010 Iowa will require wineries to obtain a direct shipping license to ship wine directly to consumers. Previously a reciprocal state, Iowa’s borders will soon be open to all wineries across the country who obtain a permit, regardless of reciprocity status with the state. Additionally, there are no restrictive requirements on the winery (such as a volume production cap), making Iowa’s market accessible to all permitted wineries.
The permit application can only be completed online at Iowa’s elicensing website. You may view Iowa’s user guide for instructions on how to begin the licensing process. The “Wine Direct Shippers License (DS)” requires a fee of $25 and a $5,000 bond. Though the direct shipper license application is completed online, copies of state and federal winery licenses, and bond should be mailed to the Iowa Department of Commerce, Alcoholic Beverages Division. Monthly reports and excise taxes are required although they have yet to release these forms. Iowa will not require wine direct shippers to collect sales tax. Start your application process today and be one of the first to become compliant in Iowa.
Direct Shipping Licensing Updates
March 4th, 2010
Michigan
Direct shipping permits for Michigan are renewable on May 1. The annual renewal cost for the Michigan Permit is $100; the same as the initial permit fee. For those wineries that do not have a direct shipping permit for MI now is good time to consider applying. Licenses are valid from May 1 – April 30 and the $100 fee is not prorated. The permit allows wineries to ship up to 1,500 9-liter cases to Michigan consumers. Brand registration is required. This can be completed through the MLCC’s online label registration program for no fee. Sales tax and excise tax must be paid and reports must be filed.
New Hampshire
New Hampshire has updated its direct shipping permit application. The updated application is now available on Wine Institute’s website along with the instructions. Please be sure to complete the application in its entirety and attach all required documents. Incomplete applications will be returned. Applicants will be happy to note that there is no permit fee. Approved shippers are allowed to ship up to 60 containers of not more than 1 liter each to each consumer during a calendar year. Monthly reports and tax payments are required.
Tennessee
The Tennessee Alcohol Beverage Commission has updated their ”Direct Shipper Application Requirements – ABC” document posted on the TN ABC and Wine Institute websites. The original version of the document did not include the “Wholesale Gallonage Letter” requirement. The Wholesale Gallonage letter is one of 2 documents issued by the TN Department of Revenue that wineries must submit with their application. The second document is the “Certificate of Registration for Sales and Use Tax.” While the application on the TN Department of Revenue website says a bond is required, a bond is not required for wineries. For the TN DOR wholesale gallonage and sales and use tax application form, go to: http://www.state.tn.us/revenue/forms/general/f13005_1.pdf. Licenses are valid 1 year from the date issued and the annual license fee is $150.00. There is also a 1 time non-refundable application fee of $300. Additional information about the application process is available on the Wine Institute website. Wineries may also contact Sharon Loveall at the TN Alcoholic Beverage Commission with any questions about winery direct shipping permits at 615.741.1602, ext. 141
By Annie Bones, State Relations – Wine Institute
