Untangling the complex world of wine direct shipping and compliance

Everything is bigger in Texas, including 4 month quarters and 13 month years

February 25th, 2014
By Jessamyn Boltz - ShipCompliant Research Team

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.


How to make compliant shipments to Arkansas

February 11th, 2014
By Jeff Carroll - VP of Compliance, ShipCompliant

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.



Arkansas opens for wine shipments, but only for onsite sales going to private residences

February 10th, 2014
By Sarah Fine - ShipCompliant Research Team


Wineries may now apply for an Arkansas “Wine Shipping Permit”, making the state available to onsite direct wine shipments only for the first time. The application for the $25 license may only be obtained by calling the Arkansas Alcoholic Beverage Control Division (the ABC’s number is 501-682-1105) and requesting an application be sent to the winery applicant. Once the application for the ABC has been submitted, the applicant can begin the process of obtaining sales tax and vinous liquor excise tax licenses. The entire process could take up to three to four weeks to complete. Upon receipt of approved licenses, the winery may then begin to legally ship direct-to-consumer wine orders to Arkansas residents.
 
 
Requirements of the Licensee

  1. Licensed Wine Shippers may ship up to one case to an Arkansas resident per calendar quarter.
  2. Licensees must regularly remit excise taxes, vinous liquor excise tax (3%) and state sales tax (6.5%). Please note, if you register online to pay taxes, you will be required to file and pay online (strongly recommended). Similarly, if you register via paper application to pay taxes, you will be required to file and pay using paper forms.
  3. Arkansas is the only state that requires wineries to obtain a license to ship onsite-only orders (placed in person at the winery) unlike the other onsite-only states, open via Federal Onsite (Delaware, Oklahoma, Rhode Island and South Dakota). Internet, club and phone orders are not allowed.
  4. As noted in our previous blog post, a special shipping label must be on every shipment; however, the alcohol-specific shipping labels provided by UPS and FedEx will satisfy this requirement.
  5. Wineries may only ship to residential addresses (no shipping to businesses or commercial locations), a requirement unique to the state of Arkansas.

Resources:
- Sample Arkansas Wine Shipping Permit and Instructions (call the state’s ABC to obtain your individual application – 501-682-1105)
- Online Registration for Sales and Vinous Liquor Excise Taxes (click on “New Business Registration”; online registration is recommended)
- Further instruction on how to register for a Sales Tax Permit
- Act 483, To Permit the Direct Shipment of Vinous Liquor from a Winery to Arkansas Residents


Happy New Year from ShipCompliant

January 1st, 2014
By Jamie Jimenez - Marketing, ShipCompliant

ShipCompliant is excited to announce the release of our 2014 cookbook. Click below to request your copy!Click here to request your free copy of the ShipCompliant cookbook!


South Dakota Takes Wine Product Registration Online

December 20th, 2013
By Sarah Fine - ShipCompliant Research Team

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.