Pennsylvania Becomes 44th State to Allow Direct-to-Consumer Shipping

by Michael Kaiser

6.9.16

The Keystone State has become the 44th US state to allow some form of direct-to-consumer shipping of wine. Yesterday Governor Tom Wolf (D) signed House Bill 1690 into law, opening up state. Now, only six states prohibit direct-to-consumer shipping: Alabama, Delaware, Kentucky, Oklahoma, Mississippi and Utah. Pennsylvania is a “control state” and the Pennsylvania Liquor Control Board (PLCB) will remain in place.

Prior to HB 1690, Pennsylvania did have a DTC permit process.  The permit was extremely difficult to obtain as it required all sales to be fulfilled through the PLCB. The new DTC rules resemble the laws that WineAmerica, and our partners the Wine Institute and Free the Grapes! support. When HB 1690 is implemented, it will allow any wine producer licensed with the PLCB, another state, or another country to ship wine to a consumer. However, federal import rules would prohibit a foreign producer to ship. The new DTC license is only open to wine producers, not wine wholesalers or retailers.

To obtain the DTC license, a winery will need to send an application to the PLCB. The application must include a copy of the winery license and a $250 application fee. The applicant winery must also obtain a sales tax license (available here) and show proof of the license to the PLCB. The annual renewal fee for the DTC license is $250. The DTC sales limits are 36 standard cases to a consumer per calendar year per winery. There are no sales restrictions, so a wine that is sold by the PLCB can also be shipped directly to a consumer. The tax requirements are: 6% state sales tax, variable local county and city taxes–which could raise the total tax to 10%–and an excise tax of $2.50 per gallon collected from the purchaser and remitted to the state Department of Revenue.

Another key modernization development in HB 1690 is the ability of restaurants, hotels, and grocery stores with in-store restaurants to sell up to four bottles of wine for off-site consumption.

The bill also creates a commission to study the the possibility of privatizing the PLCB. The commission must provide a report to the Pennsylvania legislature in six months.

The new law goes into effect on August 8. WineAmerica will provide updates as needed.

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Questions? Contact Michael Kaiser, Director of Public Affairs, mkaiser@wineamerica.org.

WineAmerica is the national voice the American wine industry. Based in Washington, D.C., WineAmerica represents wineries in 43 states and leads a coalition of state and regional wine and grape associations.  As an industry leader, WineAmerica encourages the dynamic growth and development of American wineries and winegrowing through the advancement and advocacy of sound public policy.

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Direct shipping comes to South Dakota

  

This week, South Dakota became the 43rd state to allow direct-to-consumer wine shipment to consumers. The legislation, HB 1001, was signed by the Governor Daugaard on February 19 and establishes a wine direct shipper license through the South Dakota Department of Revenue.

The bill would allow for any winery that holds a federal basic permit to obtain a direct shipper license. There is an annual fee of $100. The winery holding the license may ship up to 12 cases of wine produced under their permit to an adult consumer in South Dakota during a calendar year. Age verification is required. Shippers must pay sales and excise taxes and file quarterly shipment reports. Additionally, labels that are not already and registered and consigned to a wholesaler must be registered with the Department of Revenue prior to any shipment.

The legislation goes into effect on January 1, 2016. WineAmerica will provide additionally information as it becomes available.

Questions? Contact Michael Kaiser at mkaiser@wineamerica.org or 202-223-5172.

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Massachusetts to Allow Direct Wine Shipments

Massachusetts has become the 41st state to allow for direct wine shipments from in-state and out of state wineries.  The 2014 budget bill, which approves the appropriations for Fiscal Year 2015, was signed into law by the governor.  The direct shipping language was included in this bill, which will go into effect on January 1, 2o15.

The specifics of the bill are as follows:

  • Only bonded wineries may apply for a direct shipping permit

  • $300 initial direct shipping license fee,  and each subsidiary of the winery must have a separate license

  • $150 annual renewal fee

  • Shipping is limited to 12 standard cases per year per purchaser

  • Annual reports are required

  • Excise taxes remitted on each sale

  • Adult signature required

The Massachusetts Alcohol Beverage Control Commission has until January 1, 2015 to draft the licenses required for individual wineries.

There is one remaining obstacle for wine shipments into Massachusetts.  Common carriers, such as Fed Ex and UPS, are required to register each vehicle used for delivery in the state.  The registration is for a wine delivery permit and is $200 per vehicle.  It remains to be seen if the Massachusetts legislature will remedy this before it the new shipping bill goes into effect.

WineAmerica will provide its members with the necessary information as it becomes available.

 

Are you a WineAmerica member? Email us your questions! mkaiser@wineamerica.org

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