As we discussed in a previous post, Massachusetts opening to direct shipping is probably the biggest change that we have seen in direct wine shipping since the Granholm Supreme Court decision of 2005. Over the weekend, the Massachusetts ABCC updated their website with a brief advisory on the new direct shipping law that summarizes the law and provides instructions on how to complete the permit process, and how to comply with the reporting requirements.
Click here to download the Massachusetts direct shipping application (if you are having trouble downloading the application from the Massachusetts website, click here).
Here’s a quick summary of the new law:
- Only wineries that hold a TTB license and a license to produce in and export out of their state can qualify for the Direct Wine Shipper License
- Each licensed direct shippers can ship up to 12 9-liter cases of wine to any one individual per calendar year
- Direct shipping reports will be due on an annual basis
- Sales tax is not due for wine products, but is due for any non-wine items such as merchandise
- Excise taxes will be due on all shipments
The 7-page application is fairly straightforward, but in addition to some of the usual information (like business and business owner information), you’ll need to answer a couple out-of-the ordinary questions. Note: We’re working to clarify how to answer a few of the questions with the ABCC, and will update this post once we have more information.
- First, register with the Massachusetts Department of Revenue to pay sales and excise taxes. You’ll need to include the date you registered with the Massachusetts DOR on the application.
- List all businesses (carriers) that will deliver wine on your behalf; carriers must hold a Winery Shipment Transportation Permit
An early concern over the new Massachusetts wine shipping law was that it did not address the issue of common carriers having to license each and every truck that delivers wine. However, a bill to allow common carriers to obtain a fleet license for the delivery of alcohol is pending in the Massachusetts legislature. It seems somewhat unlikely that the fleet license bill will move this session. But, we believe that at least one of the common carriers will begin to license each of their trucks and therefore will be able to deliver wine to Massachusetts addresses as early as the beginning of February.
- List your winery’s methods for proof of age for sale and delivery to consumers.
See our informative post on 7 tips for better age verification, listing the different age verification methods for online wine purchases
- Include with the application a copy of 1) the license(s) you hold which authorize manufacture and exportation of wine; 2) your TTB Permit; and 3) your FDA Registration
- Finally, include a check for $300. Make the check out to the “Massachusetts ABCC” and denote the name of the licensee
We expect Massachusetts will represent an extremely important opportunity for wineries. If is approved, a process that may take as long as four weeks, you can start taking orders as soon as January 1, 2015!
Starting with the October filing period, Indiana requires all alcohol beverage companies working in Indiana to electronically remit monthly excise tax returns and shipment reports. This method for electronic filing and payment is unique to Indiana and does not exist in any other state report.
ShipCompliant will be holding several webinars over the coming weeks to help you navigate these new requirements.
Click here to attend a webinar or sign up for a consultation.
The new Indiana report will be filed automatically for ShipCompliant AutoFile users. All other filers can use the summarized actions below to meet the new Indiana requirements.
Step 1: Register with Indiana’s Excise Tax and Bulk Filing Departments
- Send an email request to Excisetax@dor.in.gov with your FID/FEIN, to obtain your new Alcohol Beverage TID#
- To register with Indiana’s Bulk Filing Department, send an email request to email@example.com for a certificate of registration.
Step 2: Download and install the following software needed to E-File
Step 3: Generate two test .xml files and send to Indiana via the above noted software programs
Step 4: Set-up electronic payments
- Electronic Payment set-up is required for those liable for paying taxes, such as wine direct shippers
- Register for electronic payment at www.in.gov/dor/3976.htm
Submit a test payment of $0.01 to PNC Bank
If you want the full set of instructions on Indiana electronic filing start by visiting the Indiana Department of Revenue FAQ page, or contact the department via the information provided on the FAQ page for more info.
And if this all too much for you to complete by the November due date (during one of the busiest times in the year), have no fear. If you are unable to successfully submit your report through this new bulk-filing process in November, Indiana will accept a paper version of the report for this month only.
Want to avoid the hassle of reporting to Indiana altogether? Sign up for ShipCompliant AutoFile and let us worry about completing the above steps for you. Learn more about AutoFile today!
Eight years after Massachusetts passed an unworkable and overly-restrictive direct shipping bill, and four years since the same law was ruled unconstitutional by a federal court, Bay State legislators finally passed a workable direct wine shipping law that will allow out-of-state and in-state wineries to ship wine directly to state residents. The new law was included in the 2014 budget bill (see page 257), and was signed by Governor Deval Patrick this morning. Set to go into effect on January 1, 2015, the new wine shipping law will make both wineries and Massachusetts wine lovers overjoyed.
Massachusetts is ranked among the most important states that still had not passed winery direct shipping law. Massachusetts is particularly important given the size of its population and its residents’ love of wine. Only four states have higher per capita consumption rates for wine than Massachusetts.
The new direct shipping law, passed as part of the 2015 fiscal year budget, provides the following conditions for shippers:
- Only bonded wineries may apply for a direct shipping permit
- Direct Shipping License Fee: $300/winery (separate permits required for each “affiliate, franchise or subsidiary”)
- Direct Shipping License Annual Renewal Fee: $150
- Shipments limited to twelve 9-liter cases per purchaser in a calendar year
- Reports to the state must be remitted annually
- Excise Taxes must be remitted on each sale
Over the next six months, the Massachusetts Alcohol Beverage Control Commission will be responsible for creating and making available license applications for direct shippers. We will report here on those developments as well as any others that impact direct shippers.
As wineries were applying for and beginning to use the new DTC shipping licenses for on-site sales to Arkansas consumers, we learned that some of the staff in the Arkansas Department of Finance and Administration were telling holders of direct wine shipper licenses that they were responsible for collecting certain local sales and use taxes. Wine Institute’s local Arkansas counsel has received a legal opinion from the Assistant Commissioner of Revenue, Policy and Legal of the Department of Finance and Administration stating that holders of a wine shipping permit are not required to collect any local taxes. Direct shippers are responsible for collecting and remitting only the statewide sales and excise taxes.
Wineries can register and file reports online through the Arkansas Taxpayer Access Point on the Department’s website at www.arkansas.gov/dfa or manually prepare and mail in the required forms. The state gross receipts (sales) tax rate is 6.5%, in addition to a state liquor excise tax that is 3% of the sales price. Direct shippers are also responsible for paying the $0.75 per gallon wine excise tax and a $.05 wine case excise tax. If the volume of wine being reported is less than one case of wine, round up. Sales and excise taxes must be reported on a monthly basis even if no activity occurred.
Annie Bones, State Relations – Wine Institute
To our valued customers:
The US beverage alcohol industry has it tough. It is one of the most regulated industries in the United States, as well as one of the most fragmented. Our industry is full of thousands of small businesses and startups; Entrepreneurs following their passion and seeking to achieve their dream of building a business as a winery, brewery, distillery or importer.
Today, I’m proud to announce a major milestone in our effort to eliminate the complexity and cost of compliance for beverage alcohol companies: AutoFile – The first fully automated filing and payment solution for regulatory reporting.
No longer will you have to print paper, cut checks, or log into online filing systems. All of your state sales tax, excise tax, direct shipping and wholesale gallonage reports are automatically filed through AutoFile, complete with payment.
AutoFile has many benefits over reporting by hand, or outsourcing:
Simple funding: State payments are made out of an account of your choosing. No painful escrow accounts to manage, or reconciliation to deal with. It’s all under your own accounts!
Total control: Anytime, anywhere, view your compliance activity, place filings on hold, review past activity. Just like online banking you can view everything submitted on your behalf, in real time.
Future proof: If a state regulatory system changes its forms, procedures or methods, rest easy, it’s our problem now, not yours.
Guaranteed: All regulatory filings will be sent on time and accurately, guaranteed.
I encourage you to try it today, using our special free trial offer:
Your first month of reporting is on us, plus we’ll waive your setup fees.
Customers: Click here to start your free trial!
Non-customers: Choose an edition of ShipCompliant right for you.
We are grateful to our many clients that assisted in creating a solution that will help our industry grow further and faster.
Effective May 1, 2014, FedEx will begin accepting on-site direct-to-consumer wine shipment orders to Arkansas residents. Both FedEx Express and FedEx Ground services will be available for wineries licensed to ship wine directly to Arkansas consumers. As we outlined in our blog post back in February, in order to be compliant, wineries must:
- Apply for a $25 wine shipping permit (call the AR ABC for a permit application – 501-682-1105)
- Ship on-site shipments only
- Send orders only to private residences
- Pay sales and excise taxes
- Limit shipment volumes to 1 case per resident per quarter, max
Wineries should also note the FedEx label placed on any shipments satisfies the requirement of having a special shipping label on any on-site orders sent to Arkansas residents. FedEx’s shipping map will be updated on May 1.