Maine, New Mexico, and Washington are the only states that have separate excise tax rates for wine and wine fortified with spirits (Edit: Some states consider a product to be fortified if it is over a certain ABV, regardless of the addition of spirits). To date, we’ve accommodated wineries that shipped fortified products to consumers by having two separate versions of the report or used calculations based on product ABV in each state. Based on user feedback, we wanted to make this process easier and more accurate, so we recently added the ability to specify that a product is fortified in ShipCompliant. With this change, we updated the Maine, New Mexico, and Washington returns listed below so that any orders containing “fortified” products will be taxed at the corresponding rate, beginning with returns that are due on or after March 20.
- Maine Direct Shipper Excise Tax and Premium Report of Table Wine, Sparkling and Fortified Wine
- New Mexico Liquor Excise Tax Return for Direct Shippers
- Washington LIQ-318 Wine Authorized Representative Certificate of Approval Holder Summary Tax Report
- Washington Liquor Shipment and Tax Report (LIQ-778 Distributor)
- Washington Liquor Shipment and Tax Report (LIQ-870 Wine Shipper)
If you are subscribed to one of the returns listed above, we will automatically update your return to tax products based on the new “fortified” product settings starting Friday, February 28 – you do not have to take any action in your ShipCompliant account unless you have fortified products.
To mark products as fortified, select the “Fortified” checkbox when adding or editing products in your account. Please note: Any orders entered prior to specifying that a product is fortified will not be retroactively updated. To learn more, read our client Knowledge Base article.
South Dakota is one of the few remaining states that prohibits the direct-to-consumer shipment of wine, but that could change if supporters of wine shipping quickly encourage the South Dakota House of Representatives to support SB 114. And speed is of the essence since SB 114 must pass out of the House by March 11 if it is to become law this year.
Passed by the South Dakota Senate by a vote of 23-11, SB 114 would allow a licensed winery to deliver up to twelve cases of wine to an individual consumer within a calendar year. The bill includes a $150 annual permit fee and remittance of sales and excise taxes. It also goes a little further than most states with existing shipping laws by requiring both age verification of the purchaser and also the registration of each label shipped into the state in advance.
The next step for SB 114 is to move through the Commerce and Energy Committee in the House of Representatives. Then, if voted through, receive a positive vote on the floor of the South Dakota House of Representatives before the bill would head to the Governor’s desk for signing, which he said he would do. The Commerce and Energy Committee is expected to consider and vote on the bill early next week.
Free the Grapes! is recommending that South Dakotans contact immediately House Commerce Committee members. Winery proponents can help the effort by reaching out to any customers and contacts in South Dakota and urging them to visit the Free the Grapes! website to send their thoughts on the bill to South Dakota lawmakers.
Texas sent out notices to all permitted out-of-state wine direct shippers that as of January 1, 2014, the Texas Alcoholic Beverage Commission (TABC) is updating the filing periods for the C-240, Shippers Excise Tax Return. The notice states that permittees shipping less than 4,000 gallons annually to consumers in Texas may begin filing this return on an annual calendar basis, beginning with the 2014 year. Permittees shipping more than 4,000 gallons of wine annually must continue to file this return on a quarterly basis, however the return will reset as a standard quarterly filing, as opposed to the unusual offset quarterly schedule. In other words:
* Qualified annual filers will file their first annual return due January 15, 2015
* Quarterly filers will file their first calendar quarter return due April 15, 2014
For the first filing period on this new schedule, rather than file a monthly return for December 2013, TABC instructs all permittees to include December 2013 in their first filing period of the new filing structure. ShipCompliant users need not worry calculating this extra month into their new filing periods; this month will already be included in the new filing periods by the time these filing periods need to be submitted to the state. Permittees that are ShipCompliant users and allowed to switch to annual filing should keep an eye out for an alert notifying you when the annual frequency is available for selection in your ShipCompliant account. Please note that you should only switch to the annual frequency if the state has indicated they qualify, and those that are qualified must file annually.
Following up on Sarah’s post about the new permit applications being available in Arkansas, we wanted to give you a quick update on how we’re handling some of the unique requirements in the Arkansas law. The bottom line is that you can now make compliant shipments to Arkansas if you’ve completed the permit process. Continue reading below for the full details of how we implemented this new state in ShipCompliant…
1) We deployed the updates to production last night. We also activated the appropriate rules in the ShipCompliant Direct database. The first thing to note is that this permit allows you to make onsite shipments only. Therefore, if you pass in a shipment with an Order Type of Internet, Phone, Mail, Fax, or Club (all of which map to an “Offsite” Sale Type), the order response will be Non Compliant. Shipments with an Order Type of In Person will results in a Sale Type of Onsite and therefore will be compliant if all other rules checked are also compliant.
2) Because the Arkansas DFA is going to accept the FedEx and UPS standard alcohol shipping labels and stickers as meeting the requirement for special shipping labels, we did not add any custom rules to comply with this provision. Using your standard alcohol shipping practices here will achieve compliance with respect to the labeling provision.
3) We did add a new rule called for the provision that requires all shipments to be delivered to a residential address. If you are using version 1.1 or 1.2 of the API will see this rule type come through as Business Address Shipping Prohibited. Please work with Emily Sheehan, our Integration Specialist, if you have any questions about handling or testing this new rule type. The rule is live now in Arkansas in our sandbox (dev) and demo (demo) environments.
4) When shipments are sent to ShipCompliant, they are checked for compliance against our rules database and that process always includes an address validation step prior to determining the rules that are applicable for that shipment. As part of our algorithm for validating addresses, we’ll always set the Residential Business Delivery Indicator (RBDI) flag to either R for Residential or B for Business per USPS standards. When checking this new rule type for compliance, we’ll look at that flag and only shipments with an RBDI set to R will pass the compliance check process.
In summary, if you have a permit and make an onsite shipment to a residential address in Arkansas, an order will now pass the compliance check process in ShipCompliant once you acknowledge the new rules in ShipCompliant Direct. We’ve included two sample XML responses below to illustrate both compliant and non-compliant shipments to Arkansas.
Product renewals for 2014 in South Dakota can now be done online. South Dakota now joins Arkansas as one of the most recent states to institute on-line product registrations, continuing the trend toward digital product registration, away from the realm of pulp and fiber and into the digital space.
Suppliers of wine, spirits and beer to South Dakota can complete their product registration renewals for 2014 via South Dakota’s new on-line product registration portal. Paper-based product registration is still an option – forms, fees and instructions for paper registration are available on South Dakota’s Special Tax Division website.
HOW SOUTH DAKOTA’S ON-LINE PRODUCT REGISTRATION WORKS
To utilize the new South Dakota on-line product registration portal, suppliers will need their 4-digit “BR License Number” (provided in a recent communication from the state) as well as an email address. Upon logging in, suppliers will see a list of all currently registered products associated with their BR License Number. Suppliers need merely click the box next to the product they would like to renew for distribution in 2014. Should suppliers find that they would like to edit any details of their products (i.e. to add a COLA # or edit the label description), it is possible to easily edit details of any product. All renewals are preliminarily approved upon submission. State fees for on-line registration of wine products is $30 for an initial label of a brand and $22.50 for subsequent labels under the same brand. The fee for on-line registration of beer is $30 per label, and for spirits $55 per label. Payment may be made by credit card or check.
South Dakota’s new on-line product registration will allow suppliers to more quickly register new products, renew, and edit products currently licensed and in distribution in the state.
Anyone with any questions, please leave a comment here, or contact Tonna Finch at the SD Department of Revenue by email, or by phone at 605-773-5397.
With passage of HB 1480 (now titled “Act 1105“), the state of Arkansas is requiring that all wine and spirits suppliers actively distributing wine and spirits into the state must register each distributed product with the state. Wine & spirits products (beer is not required) currently in distribution must be registered by December 31 and all registration takes place on-line.
The state fee for on-line product registration is $20/label. Suppliers can no longer send the “Manufacturer’s Request for Brand Registration or Change of Wholesaler” form in a paper format. This is now done on-line.
How to Register Your Currently Distributed Products:
- Visit Arkansas’ Electronic Registrations Website
- Have a list of your actively distributed COLA numbers, names of your Arkansas distributors, and any brand owner authorization letters if the registrant is not the owner of the brand being registered with the state
- Payment is via credit card
Through December 31, 2013, suppliers may download an excel spreadsheet of their COLAs by Federal Basic Permit Number. Labels will initially be approved directly upon completion of workflow process. The state will review incoming registration to ensure non-violation of sole source requirements and other rules and regulations.
-All currently active products must be registered by December 31
-Product registrations are valid through June 30, 2014
-Label Registration status can be verified by COLA Number
-Newly distributed products may be registered beginning January 1, 2014
Feel free to ask any questions you may have about Arkansas product registration on this blog post and we will answer them as quickly as possible.