Wisconsin Becomes a Limited State Today: I'll Have Some Wine with that Cheese, Please

Beginning today, October 1, 2008, Wisconsin is open to direct wine shipments from wineries throughout the country. Direct shipments to consumers in Wisconsin must be shipped under Wisconsin’s new “Direct Wine Shipper’s Permit”; reciprocal shipments of wines are no longer allowed. New direct shipping regulations include: a $200 Direct Shipping license, payment of sales and excise taxes, and quarterly reporting. Additionally, the consumer is limited to receiving no more than 108 liters (12 cases) of wine per year from any combination of licensees; the consumer is responsible for staying within the limit, however an individual direct shipper may not ship over 108 liters of wine to any individual in Wisconsin.

Also included in the legislative changes is the ability for wineries that produce less than 25,000 gallons of wine per year, to sell wine to retailers through a “co-operative wholesaler”. Co-operative wholesalers must be created before December 31st, 2008. To learn more about the legislative changes and co-operative wholesalers, read “Direct Shipping Bill Receives Governor’s Signature“. Also, “Permit Applications Available” contains more detailed information on these legislative updates, and information on how to become permitted as a Direct Wine Shipper in Wisconsin.

Wisconsin Becomes a Limited State Today: I’ll Have Some Wine with that Cheese, Please

Beginning today, October 1, 2008, Wisconsin is open to direct wine shipments from wineries throughout the country. Direct shipments to consumers in Wisconsin must be shipped under Wisconsin’s new “Direct Wine Shipper’s Permit”; reciprocal shipments of wines are no longer allowed. New direct shipping regulations include: a $200 Direct Shipping license, payment of sales and excise taxes, and quarterly reporting. Additionally, the consumer is limited to receiving no more than 108 liters (12 cases) of wine per year from any combination of licensees; the consumer is responsible for staying within the limit, however an individual direct shipper may not ship over 108 liters of wine to any individual in Wisconsin.

Also included in the legislative changes is the ability for wineries that produce less than 25,000 gallons of wine per year, to sell wine to retailers through a “co-operative wholesaler”. Co-operative wholesalers must be created before December 31st, 2008. To learn more about the legislative changes and co-operative wholesalers, read “Direct Shipping Bill Receives Governor’s Signature“. Also, “Permit Applications Available” contains more detailed information on these legislative updates, and information on how to become permitted as a Direct Wine Shipper in Wisconsin.

Two Upcoming Virtual Seminars; One for Wineries, One for Retailers

Virtual Seminar - WineriesShipCompliant continues its series of ‘Virtual’ Seminars on Shipping Compliance, this year with two separate offerings for wineries and retailers.  Click the links below for more information and to register.

The winery focused seminar presented along with Wine Institute, FedEx and Wine Business Monthly, will feature Steve Gross, Director of State Relations at Wine Institute, with a state-by-state legislative update.  Special guest Tom Ourada, Tax Revenue Specialist with Wisconsin DOR, will provide insight on Wisconsin’s new direct shipping legislation.  These informative presentations will be complemented by shipping compliance tools and workflows from ShipCompliant and FedEx.

The retailer focused seminar presented along with Specialty Wine Retailers Association (SWRA) and Wine Business Monthly, will feature Tom Wark, Executive Director of SWRA, with a state-by-state update from the retailer perspective along with best practices and a product demo from ShipCompliant.

Both events are run in a ‘virtual’ online format where you hear the speakers by calling into a conference phone line and see their presentations by logging into a coordinating web conference.

Don’t miss this opportunity to get time-critical updates without the cost of attending an event in person.

Wisconsin Permit Applications Available

The Wine Direct Shipper permit application is now up on Wisconsin’s website. Wisconsin approved licensed direct shipping legislation back in March, which will allow wineries in every state to ship limited amounts of wine to Wisconsin residents, beginning October 1, 2008. Here’s some basic information on how to apply for the direct wine shipping permit:

Form BT-138, “Alcohol Beverages Tax Bond” (the bond amount should be equal to two times the estimated monthly tax due; minimum of $1000) and Form AB-123, “Distilled Spirits/Wine Permit Application” should be mailed to the WI DOR along with payment. Prospective direct wine shippers also must register to pay sales tax. The wine shipping permit application will not be processed until an Application for Business Tax Registration (aka “Seller’s Permit”) is completed. The fee for business tax registration is $20. If filing online (recommended – the application is processed much faster if done online), mail in the business tax registration fee with your $200 wine shipper permit fee and wine shipper permit application.

Wisconsin Wine Direct Shipper Permit Application

10 Days Left Until Illinois Permit Deadline

Just a friendly reminder that beginning June 1st, 2008, Illinois will require a permit for all direct-to-consumer wine shipments to the state. A winery must receive the permit before it may begin/resume shipment to the state. In 10 days, under the newly-promulgated wine shipping law, wineries and retailers that have been shipping to Illinois under a reciprocal agreement will no longer be able to ship to the state without a permit. The Illinois Liquor Control Commission has not given any indication of a grace period for shipping while applications are in process.

For expedient processing, an applicant should submit a copy of its state liquor license along with the Out-of-State Winery Shipper’s License application. An applicant must also submit the brand registration form (for brands not already registered with the state) prior to, or simultaneously to the submission of the application. In addition, a winery must register for sales and excise tax. An accelerated tax permit approval process is available for those wineries which have a distributor in state. In any event, and with time running out, electronic submissions will be approved faster than those send via conventional mail. See our previous post for more detailed instructions and a checklist for the application process with links to forms.

Also, as a reminder, Georgia will open up on July 1st, and Wisconsin will begin their new permit system on October 1st. We’ll have the full details of the application process in both states as they become available.

Wisconsin Direct Shipping Bill Receives Governor's Signature

Senate Bill 485 was passed into law yesterday, making Wisconsin the newest addition to the list of permit states. Wisconsin was one of the three remaining states that had yet to change their direct shipping laws since the Granholm ruling. Direct shipping law did not authorize intra-state shipments of wine to consumers, and the reciprocity agreement defined by Wisconsin only allowed California wineries to ship directly to the state’s residents. Now, a winery in any state may ship wine directly to a Wisconsin resident once the winery has received a direct wine shipper permit from Wisconsin.

The new direct wine shippers permit allows licensees (licensed wineries that are located in- and/or out-of-state) to ship wine directly to an of-age and non-intoxicated individual in Wisconsin. The individual may receive no more than 108 liters of wine annually from any combination of licensees. The individual is responsible for compliance with this annual limit. The fee for this permit is no more than $100/year. Sales tax, excise tax and reporting are required quarterly.

This is good news for direct to consumer sales – no capacity caps, no touchy age-validation restrictions… but there’s a catch concerning self-distribution: all sales to retailers must go through a wholesaler.

Legislative Intent… Without the 3-tier system, the effective statewide regulation and collection of state taxes on alcohol beverages sales would be seriously jeopardized. It is further the intent of the legislature that without a specific statutory exception, all sales of alcohol beverages shall occur through the 3-tier system, from manufacturers to licensed wholesalers to retailers to consumers. Face-to-face retail sales at licensed premises directly advance the state’s interest in preventing alcohol sales to underage or intoxicated persons and the state’s interest in efficient and effective collection of tax.

Luckily, there are a couple safeguards for small manufacturers.

“All wholesalers must work diligently to ensure that distribution channels are available for the sale of intoxicating liquor products through wholesalers to retailers in this state.”

The legislation isn’t clear about methods or consequences for wholesalers if they fail to adhere to this clause.

The other safeguard: small wineries (producing under 25,000 gallons of wine in a year) may group together to form a “Cooperative Wholesaler”; this Cooperative must become licensed to act as a regularly-licensed-wholesaler in order to sell to retailers or other regularly-licensed-wholesalers. The maximum number of Cooperatives allowed is six, and they must be created between October 1, 2008 and December 31st, 2008. The Cooperative must have a single location within the state of Wisconsin (a winery can only belong to one Cooperative). If the Cooperative’s members consist of both in- and out-of-state wineries, then the board of directors must also include both in- and out-of-state members. Members may not be employees of the Cooperative, but may volunteer.

The bill passed through the Senate and the House in late February and was approved by Governor Doyle on March 13th. Last year, a similar bill was passed by the House and Senate, but was vetoed by Governor Doyle partly because the bill would have banned self-distribution altogether, and did not “adequately address the needs of small entrepreneurial wineries.” This year’s bill seems to address the aforementioned needs and received backing by the Wisconsin Wine and Spirit Institute. The new law goes into effect on October 1, 2008.