Posts from the North Dakota Category
Updated North Dakota DTC Reporting Requirements
May 9th, 2011
Effective July 1, 2011, North Dakota law will require that direct-to-consumer (DTC) shippers now be subject to the same $100 per day fee for the late filing of reports that is currently required of in-state wineries and other licensees. Additionally, the penalties for failure to pay or late payment of excise taxes by DTC shippers will now be the same as those covering in-state licensees. Similarly, the state tax commissioner will be granted the same authority it has over in-state wineries and other licenses to make an examination of the books and premises of direct shippers in determining full compliance of relevant state laws and rules.
The annual fee for a Direct Shipper’s license is $50 and must be paid within 30 days of making the initial shipment. Wineries with an approved license may ship up to 3 nine liter cases each month to a consumer. All shipments must originate from the address listed on the licensee’s permit. Applications and reporting information are available on Wine Institute’s website under State Shipping Laws.
by Sally Jefferson, Regional Government Affairs Manager, Wine Institute
Excise Taxes Updates, New York Up and North Dakota Down
April 23rd, 2009
The wine excise tax rate in New York will increase on May 1, 2009 from $0.1893 per gallon to $0.30 per gallon. Wine Institute was part of a coalition of industry members that actively opposed the NY Governor’s proposal for a wine excise tax and demonstrated the detrimental effects an excise tax increase would have on the economy. These efforts resulted in the original proposal for a $0.32 increase being reduced to only $0.1107 per gallon.
In other news North Dakota will no longer have a separate tax category for sparkling wine. Beginning July 1, 2009 sparkling wine will be taxed at $0.50 per gallon, the same rate as table wine. This is a significant decrease from the current excise tax of $1.00 per gallon of sparkling wine.
-Annie Bones, State Relations – Wine Institute
It’s Not Easy Being Green…But Electronic Filing Makes It Easier
June 9th, 2008
Image, “Office Paper, 2007″ by Chris Jordan.
June 5th was World Environment Day. And in honor of the wonderful planet on which we live, here’s a look at how some states are doing their part to make it easy for direct-to-consumer wine shippers to be eco-friendly.
Generally speaking, businesses are looking to become greener; it can be cost effective, it’s good marketing, and it is better for the environment. There are several practices wineries can utilize when making the decision to become green – recycling, conservation, green farming, renewable energy, and alternative packaging – but one thing that can’t be controlled is paper consumption for licensing and reporting. Direct wine shipping is undoubtedly paper-filled; there are permit applications, licenses, monthly reports, and tax returns – just to name a few – that must be printed and mailed. There’s no doubt that the paper used in the filing of these forms contributes to the enormous rate of paper consumption in the United States. In 2007, 96.7 million tons of paper and paperboard were consumed in the United States and 54.3 million tons were recovered through recycling*. However, despite the fact that over half of the consumed paper was recovered, recovery is not the be all and end all of environmental protection. Prevention is the best and most efficient way to protect the environment from paper waste**. Electronic filing is an effective means of said prevention for wineries who can be required to submit over 500 forms per year, with an average of four pages a form. That’s 2000 sheets of paper just for reporting wine shipments!
Currently, about half the states offer some sort of electronic filing, the bulk of which consists of sales and use tax returns. Excise tax reports and copies of invoices are rarely available for electronic submission. However, North Dakota is on the forefront, offering an electronic filing option for their Direct Shipper’s Liquor Tax Report. Also, Hawaii allows direct shippers to submit copies of invoices via email. States should follow North Dakota and Hawaii’s lead, transitioning from a paper-based system to one that makes additional forms available for e-filing. Ultimately, the goal would be mandatory electronic filing for all forms in all states, if they made it easy. Such a transformation in the process will significantly reduce the amount of paper consumed and help decrease the country’s overall consumption rate, which, coupled with a continuing increase in recovery/recycling rates, will result in a near elimination of all paper waste in the not-so-distant future. Apart from environmental concerns, electronic filing could also increase administrative efficiency, reducing labor and material costs for both the state alcohol commission and for the those submitting the forms. Electronic filing is not only green, but convenient!
World Environment Day may have come and gone, but everyday should be an “Earth Day”.
It's Not Easy Being Green…But Electronic Filing Makes It Easier
June 9th, 2008
Image, “Office Paper, 2007″ by Chris Jordan.
June 5th was World Environment Day. And in honor of the wonderful planet on which we live, here’s a look at how some states are doing their part to make it easy for direct-to-consumer wine shippers to be eco-friendly.
Generally speaking, businesses are looking to become greener; it can be cost effective, it’s good marketing, and it is better for the environment. There are several practices wineries can utilize when making the decision to become green – recycling, conservation, green farming, renewable energy, and alternative packaging – but one thing that can’t be controlled is paper consumption for licensing and reporting. Direct wine shipping is undoubtedly paper-filled; there are permit applications, licenses, monthly reports, and tax returns – just to name a few – that must be printed and mailed. There’s no doubt that the paper used in the filing of these forms contributes to the enormous rate of paper consumption in the United States. In 2007, 96.7 million tons of paper and paperboard were consumed in the United States and 54.3 million tons were recovered through recycling*. However, despite the fact that over half of the consumed paper was recovered, recovery is not the be all and end all of environmental protection. Prevention is the best and most efficient way to protect the environment from paper waste**. Electronic filing is an effective means of said prevention for wineries who can be required to submit over 500 forms per year, with an average of four pages a form. That’s 2000 sheets of paper just for reporting wine shipments!
Currently, about half the states offer some sort of electronic filing, the bulk of which consists of sales and use tax returns. Excise tax reports and copies of invoices are rarely available for electronic submission. However, North Dakota is on the forefront, offering an electronic filing option for their Direct Shipper’s Liquor Tax Report. Also, Hawaii allows direct shippers to submit copies of invoices via email. States should follow North Dakota and Hawaii’s lead, transitioning from a paper-based system to one that makes additional forms available for e-filing. Ultimately, the goal would be mandatory electronic filing for all forms in all states, if they made it easy. Such a transformation in the process will significantly reduce the amount of paper consumed and help decrease the country’s overall consumption rate, which, coupled with a continuing increase in recovery/recycling rates, will result in a near elimination of all paper waste in the not-so-distant future. Apart from environmental concerns, electronic filing could also increase administrative efficiency, reducing labor and material costs for both the state alcohol commission and for the those submitting the forms. Electronic filing is not only green, but convenient!
World Environment Day may have come and gone, but everyday should be an “Earth Day”.
Six Veils Out of Seven: Retailer Shipments Under Granholm
January 30th, 2008
On January 14, 2008, a district court in Texas rendered a mostly pro-trade decision in Siesta Village Market, LLC v. Perry that clarified much, but danced around the hottest issue, leaving the final veil in place.
The case upholds the basic Specialty Wine Retailers contention that a state that allows its retailers to deliver to consumers must permit direct shipment by out-of-state retailers. It also has some important things to say about the meaning of Granholm’s less pellucid passages. In particular, it attempts to deal with the most significant internal tension of the Granholm majority opinion, viz., the difficulty of squaring the holding of the opinion, that states cannot require out-of-state wineries to become residents as a condition to reaching local markets, with a dictum-within-a-dictum quoted from a 1990 Supreme Court case, North Dakota v. United States, to the effect that the 21st Amendment empowers states “to require that all liquor sold for use in the State be purchased from a licensed in-state wholesaler.” (For an explanation of the difference between holdings and dicta, see the blog post, Discrimination Against Out-of-State Retailers After Granholm).
The Siesta Village decision and its implications merit further discussion, in particular on the following points:
1. Texas had a “citizenship” requirement of at least a year’s residence in the state for most licenses. It had already been declared unconstitutional when applied to newly arriving wholesalers with physical premises within the state. Siesta Village goes farther by analyzing the statute as a location requirement and holding it unconstitutional on Commerce Clause grounds, to the extent it prevented issuance of the requisite retailing licenses to out-of-state retailers.
2. The Siesta Village judge takes Granholm as a location parity case, and his opinion is explicit that physical presence requirements “plainly discriminate against interstate commerce.” However, like every analyst of Granholm, he had to deal with a key question posed by the quotation from North Dakota, noted above: If a state has the right to require all wine to “be purchased from a licensed in-state wholesaler,” how does one give effect to the Commerce Clause policy against location discrimination? One way of resolving the issue is to require the state to accept methods of consummating the purchase requirement that do not substantially burden interstate commerce relative to local, such as running the sale through the local middle tier without requiring the wine to take an economically disadvantageous logistical path when sold by an out-of-state retailer. Another is to declare that the quotation is dicta and therefore not binding in applying the Granholm holding to a different chain of distribution where its effect on commerce is more problematic –rather too bold a departure to expect in a district court opinion. In the event, the judge simply let the contradiction lie, holding that the retailers have to comply with Texas laws requiring a state retail license and purchase from a Texas-licensed wholesaler, a deferral that has been described as a ticket to the next round of litigation. Meanwhile, the Texas Alcoholic Beverage Control Commission has informally commented that it is not their problem.
3. Experts disagree on the extent to which Granholm was a “weak record case” that could have gone the other way had the states made a better showing of regulatory problems, for example in tax collection and averting deliveries to underage recipients. Siesta Village takes the opposite view, and granted summary judgment, which means the court decided Texas failed to show substantial likelihood that, if it were afforded a full hearing, it would present evidence on which a judgment in its favor could be based. To win in a direct discrimination case a state would have to show there is no reasonable alternative to discrimination for achieving legitimate regulatory objectives. The court reads Granholm to say that the availability of licensing and modern communications makes such an argument inherently implausible, and comes close to saying a state can never prevail on the proposition that interstate delivery is more likely to cause underage drinking than intrastate delivery.
4. Another point of controversy among lawyers is whether the Commerce Clause is indifferent to whether a court cures discrimination by leveling up or down. Siesta Village takes the side of those who argue that it makes no sense to level down in enforcing a constitutional provision intended to encourage interstate trade, at least in the absence of a clear legislative statement requiring termination of in-state privileges in case of invalidity of interstate prohibition. In constitutional law terms, the Siesta Village judge may have discovered a penumbra to the Commerce Clause that would prevent courts from taking such simplistic approaches as counting the number of lines of statutory text that would have to be rewritten and picking the smaller revision.
5. Although Siesta Village rejected the wholesalers’ strange argument that the discrimination arose not from Texas’s intent, but from the happenstance of the plaintiffs’ locations, it indulged in dicta indicating states can adopt on-site-only laws, in which case the “accident of geography,” and not state discrimination, would be responsible for excluding remote sellers. It appeared to accept the reasoning that because there is no “direct shipment market” in those states, the remote sellers are not excluded from anything by the prohibition, which is arguably a flawed argument under the Commerce Clause, whose policy extends to disproportionate burden as well as overt discrimination.
Appeals seem likely. Meanwhile, the parties in Knightsbridge Wine Shoppe, LTD v. Jolly, who agreed to extend Granholm, at least temporarily, to non-producing retailers selling to California consumers, will presumably take up their cudgels on application of the Siesta Village analysis, versus that of the New York case, Arnold’s Wines, Inc. v. Boyle on September 9, 2007. In Arnold’s Wines, the New York federal district court dismissed a retailer suit without an evidentiary hearing, on the grounds that the state had a 21st Amendment right to require all sales to go through an in-state wholesaler, a proposition suggested by the vexing dictum in the Granholm opinion.
The Arnold’s Wines decision seems to miss Granholm’s point that a state may have the right to require all wine to go through three tiers, but does not have the right to apply its rule with location discrimination unless it provides evidence that its discrimination against interstate sellers is required by a legitimate state objective that cannot be achieved through nondiscriminatory means. The Siesta Village judge expressly declined to follow Arnold’s Wines, which it plausibly characterized as putting the 21st Amendment above the Commerce Clause, precisely what Granholm forbids.
