While the Autumn Leaves Change in Montana, So Do Their Wine Direct Shipping Regulations


Montana’s new direct shipping law goes into effect October 1 and will replace the current “Wine Connoisseur’s License” process with a “Direct Shipping Endorsement” permit system. Applications for authorization to ship directly to consumers in Montana are now available. Overall, the new law and licensing process are fairly simple; the Endorsement fee will cost $50 and the winery will also have to pay the applicable Foreign Winery registration fee, depending on how many cases the winery expects to send into Montana. Effective Tuesday, October 1, wineries must have the Endorsement in order to ship to consumers in Montana.

Wineries that have been direct shipping wine via the now-obsolete “Wine Connoisseurs License” process, or wineries that have been selling to Montana distributors, will likely already have a Foreign Winery License. Wineries already holding the Foreign Winery License may submit an application for the new Direct Shipping Endorsement with the Foreign Winery’s 2013-2014 license renewal application, or if wineries have already renewed their Foreign Winery License or are Domestic Winery licensees, the Endorsement Application may be filed separately. Wineries that are not already licensed as a Foreign Winery will need to apply for the Foreign Winery License and “Direct Shipment Endorsement” box on the Foreign Winery License Registration form.

What else needs to be done to become compliant and licensed? Many of the specifics of the law change are noted in our previous blog post and in Montana’s 2013 Legislative Wrap-up. Below are some items wineries will need to know during the process of becoming licensed.

1. Fulfillment, Carrier and Distributor Notifications

  • Direct Shippers must notify the Department of any fulfillment houses that will send shipments to Montana consumers on behalf of the licensed winery. Submit the name and the address of the fulfillment warehouse you will use with your Endorsement Application, or anytime you plan to begin using a fulfillment warehouse.
  • Direct Shipper applicants must send a written statement acknowledging that they will only contract with common carriers that agree to deliver table wine only to consumers who are at least 21 years of age.
  • Distributor agreements must be submitted along with the Foreign Winery Application. However, if the Foreign Winery applicant intends to ship only to onsumers in Montana, no distributors need to be noted in Section 6 of the application, and therefore no agreements need be included.

2. Label Registrations

  • Foreign Winery applicants may register their labels via the paper application and must include copies of the COLAs that they will ship into the state. Approval of these labels must be received before shipping them into the state.
  • Wineries already licensed as a Foreign Winery should register their products online through the Montana TaxPayer Access Point (TAP) system. Labels being sold both to wholesalers and to consumers in Montana only need to be registered once. There is no fee for registering labels.

The Wine Connoisseur’s License will remain effective until October 1 for any current connoisseur licensees who opted to renew their license for a shortened period of July 1 – September 30 of the 2013 year. After October 1, consumers in Montana purchasing wine will not need to obtain a connoisseur’s license, but will still need a connoisseur’s license to purchase beer if they wish to receive shipments from registered breweries, as beer was not included in the changes enacted by HB 402.

Seven Companies Approved as Logistics Shippers in North Dakota

It’s been just over a month since North Dakota implemented SB 2147, and the state has been busy processing applications for the new “Alcohol Carrier” and “Logistics Shipper” licenses required under new law. Shortly after SB 2147 became effective, both UPS and FedEx were approved carrier licensees, and as of today, seven fulfillment logistics companies have been approved as “Logistics Shipper” Licensees. These seven include: Alexander Valley Cellars, Napa Valley Wine Warehouse, Vinfillment, Vin-Go, Wine Service Co-op (WSC), WineDirect, and Wine Shipping. Approved Carriers and Shippers may not have received a physical license yet, but do not need to wait to begin shipping. Physical licenses are expected to arrive in the mail soon.

Wineries and Retailers may check the North Dakota website for a list of approved North Dakota Carriers and Logistics Shippers located here under the link titled “List of Alcohol Licensees”, but keep in mind, the list is not updated on a daily basis.

UPS and FedEx Approved as Direct-to-Consumer Alcohol Carriers in North Dakota

Following North Dakota’s implementation of SB 2147 last week, which is explained in detail here, North Dakota announced that alcohol carriers FedEx and UPS have submitted applications and are now approved for shipping direct-to-consumer orders into North Dakota through the end of the year. SB 2147 updated the existing direct shipping law with the requirement that alcohol carrier and fulfillment logistics companies get “Alcohol Carrier” and “Logistics Shipper” licenses, respectively, in order for wine direct shippers to use their services for shipments to North Dakota consumers. FedEx and UPS therefore may now be used for wine direct shipping by North Dakota licensees who ship from their licensed premesis.

Wineries and Retailers licensed to sell and ship to North Dakota consumers should remember, however, that until logistics shippers (aka fulfillment warehouses) are licensed under SB 2147 requirements, only in-house fulfilled orders can be shipped. North Dakota periodically publishes a list of licensed entities on their website located here under the link title “List of Alcohol Licenses”.

Update 10/15/2013:
FedEx will halt shipments effective November 1st, 2013. Please see this post for more information.

Logistics Shippers and Carrier License Applications Required in North Dakota

An update to North Dakota’s existing direct shipping law is going into effect today, August 1. Passed earlier this year, the new law maintains much of the existing law surrounding direct shipping, but also adds two new licenses, “Logistics Shipper License” and “Alcohol Carrier License”, in addition to new shipment reports.

Since April of 2010, fulfillment warehouses have been prohibited from shipping into the state on behalf of their winery or retailer clients. Effective today, a fulfillment warehouse can ship into the state once they apply and are approved for a “Logistics Shippers” license. Also effective today, an “Alcohol Carrier” license is required for any carriers shipping direct-to-consumer orders into the state; this includes common carriers such as FedEx and UPS. According to a recent newsletter sent out by North Dakota’s Office of the State Tax Commission,

“All direct shippers, logistics shippers, and alcohol carriers MUST be licensed BEFORE shipping… and must ensure the alcohol beverage is being shipped and delivered by licensed direct shippers, licensed logistics shippers and licensed alcohol carriers.”

No Logistics Shipper or Alcohol Carrier licenses have been issued as of yet. This means that, in effect, until carriers become licensed, direct shipments into North Dakota will not be compliant. Alcohol Carrier and Logistics Shipper licenses may take a week to be processed.

Licensees should also be aware of new shipment reports. The law now requires each of the three aforementioned types of licensees to electronically report shipments into the state. Each licensee must keep records and will be required to report the name and license number of the other licensees they used for each shipment. All licensees will be required to report the name and address of the recipient, the type and quantity of alcohol shipped, and tracking numbers. Direct shippers may file the existing annual electronic report for all 2013 shipments (“Schedule H” for sales of liquor and wine); the new direct shipper reporting requirements will go into effect beginning with the 2014 filing period. Alcohol Carriers and Logistics Shippers must report monthly. To ease the reporting burden, the Office of State Tax Commissioner publishes license names, numbers and addresses of licensees on their website.

ShipCompliant clients should note that we added “Carrier Prohibited” rules for FedEx and UPS to our database that will cause all shipments to North Dakota to be not compliant effective today. Once we receive confirmation that the carriers are licensed, we will remove each rule to allow shipments from approved Alcohol Carriers. Similarly, we applied a “Third Party Shipper Approval Required” rule to North Dakota that will cause shipments from non-approved fulfillment houses to fail compliance checks. Currently, no fulfillment houses are approved, but we will update this rule immediately after getting confirmation of each approved Logistics Shipper.

Application Links:
Alcohol Carrier License Application
– $100/year
Logistics Shipper License Application
– $100/year
Direct Shipping Permit Application
– $50/year Renewals will be sent out in November for the 2014 licensing period

Kentucky Election Day Bill Creates New License for Out-of-State Wine and Spirits Suppliers

All out-of-state wine and distilled spirits suppliers that sell to Kentucky distributors are now required to obtain an “Out-of-State Distilled Spirits/Wine Producer/Supplier License” following the passage of SB 13 in April. Before this bill became effective on June 25, 2013, suppliers still needed to register their brands with the ABC prior to selling to Kentucky distributors but did not need to obtain a license. In an informative fact sheet, Kentucky explains SB 13 was “…a much needed ‘clean up’ of existing statutory problems and inconsistencies that existed in Kentucky law without changing or expanding existing license privileges.” By now, most current out-of-state wine and spirits suppliers have received an application packet from the Kentucky Department of Alcoholic Beverage Control to apply for the new license, needed in order to continue selling to their Kentucky distributors.

SB 13, originally a bill to allow for sales of alcoholic beverages on election days, went through several amendments that also added changes to current law in regards to sampling allowances, elections of wet/dry location changes, and numerous updates to the alcoholic beverage licensing system. These added amendments included the creation of the Out-of-State Distilled Spirits/Wine Producer/Supplier Licenses and accompanying fees:

  • “Out-of-state Distilled Spirits/Wine Producer/Supplier” – 50,000 gallons or more produced imported annually. $1550/year or $3100/two years
  • “Limited Out-of-State Distilled Spirits/Wine Producer/Supplier” – 2001 to 49,999 gallons produced imported annually. $260/year or $520/two years
  • “Micro Out-of-State Distilled Spirits/Wine Producer/Supplier” – 2000 gallons or less produced imported annually. $10/year or $20/two years

If you are an out-of-state wine/spirits supplier that has not yet applied for the new license, or if you wish to begin selling to Kentucky distributors, fill out the application for an Out-of-State Distilled Spirits/Wine Producer/Supplier License and submit to the state, or contact the Kentucky ABC at (502) 564-4850 for further assistance.

UPDATE: License fees are based off of gallons imported into the state of Kentucky on an annual basis-not overall annual production.

Texas Eases Requirement for Direct-To-Consumer Licensing

The direct shipper permit application process has just become a little easier. The Texas Alcohol Beverage Control Commission (TABC) has determined that it is no longer necessary or appropriate to require every Out-Of-State Direct Wine Shipper permit applicant to submit a bond with its application.

As of November 15, 2012, the only direct shipper applicants required to furnish a bond with their application are those who have outstanding debts of $500 or more for a tax or fee imposed by the TABC. This change applies both to wineries looking to renew their Direct Wine Shipper permits and to new applicants. As always, wineries shipping to Texas consumers must have a valid Out-of-State Direct Wine Shipper permit and are required to pay sales and excise taxes. The total cost of a two-year direct shipping permit remains the same, at $526.00.

– Annie Bones, State Relations – Wine Institute