Update on Idaho Direct Shipper’s Permit Application process

Wineries can begin applying for Idaho direct shipping permits. Wineries must complete the Idaho Business Registration Form and the Idaho Beer and Wine Tax Application (BWA). Both forms should be submitted to the Idaho Tax Commission with a $1000 Bond, a Certified Copy of the Winery’s License (In California it is the Type 02 License) and a check for $50. Idaho does not have a current bond application available at this time, and is therefore accepting any generic bond application. Also a winery may submit a copy of their state winery license with a signed and notarized statement that it is an unaltered copy of the original, in lieu of a certified copy. The Idaho Tax Commission will forward all of the documents to the Alcoholic Beverage Control Division and the ABC will then issue the direct shipper’s permit. There are monthly reporting requirements.

Idaho permit instructions posted

Idaho released instructions for getting permitted for direct shipment on Thursday. The document can be found in Word format on the Wine Institute site here. Three different permits are actually required before wineries can ship.

1) Wine tax permit from the Idaho State Tax Commission: To get the tax permit, first fill out the updated Beer and Wine Tax Permit Application (BWA), which is not yet available.

2) Seller’s permit from the Tax Commission: Register online for a seller’s permit at business.idaho.gov.

3) Direct shipper permit from the Idaho State Police�s Alcohol Beverage Control Bureau (ABC): The Tax Commission will forward your BWA to the ABC, who will automatically issue the direct shipper permit.

Also listed in this document are more details about the new rules.

– Excise, sales, and use taxes

– Annual reporting

– Volume limit of 24 cases per individual per year

– Package label requirements

– Common carrier must verify the age of the recipient

Idaho removes reciprocity

Idaho officially removed its reciprocity language in House Bill No. 454, establishing itself as a limited direct state. Idaho joins California and Washington as reciprocal states that moved to a limited direct model to comply with Granholm. Other reciprocal states are likely soon to follow, including Colorado and Hawaii.

With the new legislation, which goes into effect on July 1st, out of state wineries can purchase a $50 annual permit to ship wine directly to Idaho consumers. Limitations include a per individual volume limit of 24 cases per year, sales and excise taxes, and an annual reporting requirement.

The Granholm case effectively established that states must treat in-state and out-of-state wineries evenhandedly. Although the Granholm opinion did not specifically address the legality of reciprocity, Idaho did not want to risk a court challenge. Check out the Statement of Purpose from the admendment to HB 454 (emphasis added):

In a recent United States Supreme Court ruling requiring equal treatment of in-state and out-of-state wineries in the direct shipment of wine to consumers, Idaho’s law needs to be changed to a permit state from a reciprocal state.

This change would be equally beneficial to Idaho wineries as to out-of-state wineries. This proposal will establish a permit system that applies the same rules to all wineries, regardless of location.

This proposal would increase the collection of sales and excise taxes on wine shipped to Idaho consumers and establish greater public safeguards to prevent wine shipments to minors. It also will create a licensing requirement and fee to support oversight of wine shipments. This will also eliminate the potential for a legal challenge to our existing law.