2013 Wine Compliance Legislative Updates and a Virtual Seminar Invitation

You may remember reading our posts highlighting what to look for in the legislative season back at the beginning of 2013. Now that many legislative sessions are starting to come to a close, here is a quick check-in on this year’s legislative changes, all of which will be addressed in detail at the ShipCompliant Direct Wine Sales Virtual Seminar, scheduled for October 17th. Reserve your spot today for a complete update on the 2013 wine direct shipping world.

How did the Direct Shipping Bills Stack Up?

Pennsylvania and Massachusetts were the headlining states this year once again when it comes to opening up new states to direct shipping. Although neither state passed a bill prior to the summer recess, legislatures are back in session in both states and direct shipping remains a possibility.

Montana HB 402 will become law tomorrow (Tuesday October 1, 2013), effectively replacing the wine connoisseur’s license with a direct shipping “endorsement” available to Montana wineries and to out-of-state wineries holding a Foreign Winery License. Check out our previous blog post for more detailed information on obtaining this endorsement.

Arkansas Act 483, originally HB 1749, opened up limited direct shipping to the “Natural State” for wineries. The state is still finalizing how they will regulate this new law, which took effect mid-August, but this previous post provides a detailed summary of the Act.

Streamlined COLA Processing

The TTB continues to revamp their website and accept feedback from the industry. Review the status of the COLA Streamlining Accomplishments and Long-term Initiatives on the TTB website.

Existing Direct Shipping Laws, Reworked

Nebraska LB 230 passed and became effective on September 6, 2013. We highlighted the details on the bill that adds new restrictions to the wine direct shipping process.

North Dakota SB 2147 created two new licenses that will allow for wine direct shippers to utilize licensed common carriers and fulfillment houses. This bill took effect August 1, 2013.

Product Registration Updates

In Arkansas, HB 1480 became effective mid-August, and beginning October 15 suppliers will be able to register their products online under the new requirements outlined in this bill.

Reserve your spot today for a complete legislative update and more during the ShipCompliant Direct Wine Sales Virtual Seminar!

While the Autumn Leaves Change in Montana, So Do Their Wine Direct Shipping Regulations


Montana’s new direct shipping law goes into effect October 1 and will replace the current “Wine Connoisseur’s License” process with a “Direct Shipping Endorsement” permit system. Applications for authorization to ship directly to consumers in Montana are now available. Overall, the new law and licensing process are fairly simple; the Endorsement fee will cost $50 and the winery will also have to pay the applicable Foreign Winery registration fee, depending on how many cases the winery expects to send into Montana. Effective Tuesday, October 1, wineries must have the Endorsement in order to ship to consumers in Montana.

Wineries that have been direct shipping wine via the now-obsolete “Wine Connoisseurs License” process, or wineries that have been selling to Montana distributors, will likely already have a Foreign Winery License. Wineries already holding the Foreign Winery License may submit an application for the new Direct Shipping Endorsement with the Foreign Winery’s 2013-2014 license renewal application, or if wineries have already renewed their Foreign Winery License or are Domestic Winery licensees, the Endorsement Application may be filed separately. Wineries that are not already licensed as a Foreign Winery will need to apply for the Foreign Winery License and “Direct Shipment Endorsement” box on the Foreign Winery License Registration form.

What else needs to be done to become compliant and licensed? Many of the specifics of the law change are noted in our previous blog post and in Montana’s 2013 Legislative Wrap-up. Below are some items wineries will need to know during the process of becoming licensed.

1. Fulfillment, Carrier and Distributor Notifications

  • Direct Shippers must notify the Department of any fulfillment houses that will send shipments to Montana consumers on behalf of the licensed winery. Submit the name and the address of the fulfillment warehouse you will use with your Endorsement Application, or anytime you plan to begin using a fulfillment warehouse.
  • Direct Shipper applicants must send a written statement acknowledging that they will only contract with common carriers that agree to deliver table wine only to consumers who are at least 21 years of age.
  • Distributor agreements must be submitted along with the Foreign Winery Application. However, if the Foreign Winery applicant intends to ship only to onsumers in Montana, no distributors need to be noted in Section 6 of the application, and therefore no agreements need be included.

2. Label Registrations

  • Foreign Winery applicants may register their labels via the paper application and must include copies of the COLAs that they will ship into the state. Approval of these labels must be received before shipping them into the state.
  • Wineries already licensed as a Foreign Winery should register their products online through the Montana TaxPayer Access Point (TAP) system. Labels being sold both to wholesalers and to consumers in Montana only need to be registered once. There is no fee for registering labels.

The Wine Connoisseur’s License will remain effective until October 1 for any current connoisseur licensees who opted to renew their license for a shortened period of July 1 – September 30 of the 2013 year. After October 1, consumers in Montana purchasing wine will not need to obtain a connoisseur’s license, but will still need a connoisseur’s license to purchase beer if they wish to receive shipments from registered breweries, as beer was not included in the changes enacted by HB 402.

Seven Companies Approved as Logistics Shippers in North Dakota

It’s been just over a month since North Dakota implemented SB 2147, and the state has been busy processing applications for the new “Alcohol Carrier” and “Logistics Shipper” licenses required under new law. Shortly after SB 2147 became effective, both UPS and FedEx were approved carrier licensees, and as of today, seven fulfillment logistics companies have been approved as “Logistics Shipper” Licensees. These seven include: Alexander Valley Cellars, Napa Valley Wine Warehouse, Vinfillment, Vin-Go, Wine Service Co-op (WSC), WineDirect, and Wine Shipping. Approved Carriers and Shippers may not have received a physical license yet, but do not need to wait to begin shipping. Physical licenses are expected to arrive in the mail soon.

Wineries and Retailers may check the North Dakota website for a list of approved North Dakota Carriers and Logistics Shippers located here under the link titled “List of Alcohol Licensees”, but keep in mind, the list is not updated on a daily basis.

Is this the year for wine shipments in Pennsylvania?

Pennsylvania, along with Massachusetts, remains one of the two remaining key states that wineries and consumers both hope to see open for direct wine shipping. The possibility that this could be the year for direct shipping coming to the Keystone State remains quite real, depending on what happens when lawmakers return to the capital in the fall to consider a number of wine bills still on the table.

In June, House Bill 121 sponsored by Representative Curt Sonney passed the House and was delivered to the Senate for consideration. This is the second year that a shipping bill successfully moved through one half of the Pennsylvania General Assembly. Last year a bill passed through the Senate, but was held up in the House where the issue of direct wine shipments became conflated with the effort to privatize the state’s liquor distribution system.

Despite the fact that both a House and Senate version of privatization included direct shipping provisions, it is expected that HB 121, or another separate bill, such as Senate Bill 101, will be considered independently of privatization in the fall. However, HB 121 does have some problematic provision. For instance, as currently written HB 121 would require direct shippers to impose both a 6% sales tax on all wines as well as the state’s “Johnstown Flood” tax of 18% on top of the retail price of the wine. Such a tax burden could make the direct shipment channel prohibitive for many consumers. Senate Bill 101 compromises on this issue and creates a more palatable 12% “direct wine shipment tax” instead of the full 18% Johnstown Flood tax.

Still, optimism is currently running high that some form of direct shipment will be enacted this years as indicated by a recent article in the Pittsburgh Post Gazette that support for direct shipping has bi-partisan support. The Post-Gazette article also reported that direct wine shipments have the support of the Pennsylvania Liquor Control Board (PLCB) as well as the influential United Food and Commercial Workers Local 1776, the union representing state liquor store employees.

It appears then that despite the ongoing struggle and battles over privatization, 2013 may very well be the year for wine shipments to Pennsylvania. We’ll monitor developments in Pennsylvania and report any significant movement on the various direct shipping bills as they occur.

UPS and FedEx Approved as Direct-to-Consumer Alcohol Carriers in North Dakota

Following North Dakota’s implementation of SB 2147 last week, which is explained in detail here, North Dakota announced that alcohol carriers FedEx and UPS have submitted applications and are now approved for shipping direct-to-consumer orders into North Dakota through the end of the year. SB 2147 updated the existing direct shipping law with the requirement that alcohol carrier and fulfillment logistics companies get “Alcohol Carrier” and “Logistics Shipper” licenses, respectively, in order for wine direct shippers to use their services for shipments to North Dakota consumers. FedEx and UPS therefore may now be used for wine direct shipping by North Dakota licensees who ship from their licensed premesis.

Wineries and Retailers licensed to sell and ship to North Dakota consumers should remember, however, that until logistics shippers (aka fulfillment warehouses) are licensed under SB 2147 requirements, only in-house fulfilled orders can be shipped. North Dakota periodically publishes a list of licensed entities on their website located here under the link title “List of Alcohol Licenses”.

Update 10/15/2013:
FedEx will halt shipments effective November 1st, 2013. Please see this post for more information.

Logistics Shippers and Carrier License Applications Required in North Dakota

An update to North Dakota’s existing direct shipping law is going into effect today, August 1. Passed earlier this year, the new law maintains much of the existing law surrounding direct shipping, but also adds two new licenses, “Logistics Shipper License” and “Alcohol Carrier License”, in addition to new shipment reports.

Since April of 2010, fulfillment warehouses have been prohibited from shipping into the state on behalf of their winery or retailer clients. Effective today, a fulfillment warehouse can ship into the state once they apply and are approved for a “Logistics Shippers” license. Also effective today, an “Alcohol Carrier” license is required for any carriers shipping direct-to-consumer orders into the state; this includes common carriers such as FedEx and UPS. According to a recent newsletter sent out by North Dakota’s Office of the State Tax Commission,

“All direct shippers, logistics shippers, and alcohol carriers MUST be licensed BEFORE shipping… and must ensure the alcohol beverage is being shipped and delivered by licensed direct shippers, licensed logistics shippers and licensed alcohol carriers.”

No Logistics Shipper or Alcohol Carrier licenses have been issued as of yet. This means that, in effect, until carriers become licensed, direct shipments into North Dakota will not be compliant. Alcohol Carrier and Logistics Shipper licenses may take a week to be processed.

Licensees should also be aware of new shipment reports. The law now requires each of the three aforementioned types of licensees to electronically report shipments into the state. Each licensee must keep records and will be required to report the name and license number of the other licensees they used for each shipment. All licensees will be required to report the name and address of the recipient, the type and quantity of alcohol shipped, and tracking numbers. Direct shippers may file the existing annual electronic report for all 2013 shipments (“Schedule H” for sales of liquor and wine); the new direct shipper reporting requirements will go into effect beginning with the 2014 filing period. Alcohol Carriers and Logistics Shippers must report monthly. To ease the reporting burden, the Office of State Tax Commissioner publishes license names, numbers and addresses of licensees on their website.

ShipCompliant clients should note that we added “Carrier Prohibited” rules for FedEx and UPS to our database that will cause all shipments to North Dakota to be not compliant effective today. Once we receive confirmation that the carriers are licensed, we will remove each rule to allow shipments from approved Alcohol Carriers. Similarly, we applied a “Third Party Shipper Approval Required” rule to North Dakota that will cause shipments from non-approved fulfillment houses to fail compliance checks. Currently, no fulfillment houses are approved, but we will update this rule immediately after getting confirmation of each approved Logistics Shipper.

Application Links:
Alcohol Carrier License Application
– $100/year
Logistics Shipper License Application
– $100/year
Direct Shipping Permit Application
– $50/year Renewals will be sent out in November for the 2014 licensing period