This is a question most of us have asked while visiting wineries, and we probably have not thought much beyond the “yes,” “no,” or “yes, but not to [fill-in-the-state] answer. We had the opportunity recently to research the issue and were amazed at the hodgepodge of state rules and the burden placed on small businesses.
Within New York State, wineries can ship to residents (no more than 36 cases per year to any one resident) as part of their winery license. They must used an authorized shipper, and packages must be clearly labeled as containing alcohol. Packages can be delivered only to persons of age 21 years or older (signature required). With regard to other states, the New York State Liquor Authority (SLA) maintains reciprocal agreements with 24 states that allow wineries in New York to ship to residents in the other state. These agreements are subject to various limitations, such as quantities and number of shipments per year. The SLA ensures that shipping between states is on equal terms so that if, say, Connecticut limits New York State wineries to x number of gallons, then Connecticut wineries shipping to New York must follow the same restrictions. Beyond details of these agreements, wineries must follow all laws and regulations of the destination state.
Two very useful sources of information on wine shipping are the California Wine Institute and ShipCompliant. The Institute primarily serves its California member wineries, but has a rich stock of information on its website. Details on state shipping laws are provided by ShipCompliant, which is a partner of the Institute.
In general, issues surrounding shipping wine to a consumer involve the possible need for the winery to:
- Have a direct shippers license in the destination state.
- Register its brand.
- Provide a bond.
- Pay taxes.
In most states that allow shipment, a direct shipping license is required. One exception is the state of Connecticut where, in the case of a small farm winery, shipping is allowed through an in-state transporter (e.g., UPS). Otherwise, the winery must apply for a license, which might be free or might cost a few hundred dollars. Each state has its own documentation requirements (possibly requiring a bond), and the process takes as long as it takes.
Beyond licensing, wineries can expect to pay tax in the destination state. There may be sales tax (percent of price), excise tax (cents per gallon), or both. For some states, sales tax may vary depending on the county to which the wine is being shipped. Tax may be due monthly or quarterly with varying due dates, and the winery might be required to use the state’s on-line tax filing system, which can introduce another learning curve into the process. On the other hand, some states require not only forms, but also paper copies of all invoices.
For a fee, ShipCompliant can manage the shipping process for you, can integrate with the transporters’ data systems, and even pay taxes. Easy Wine Licensing (a ShipCompliant partner) can also obtain licenses and manage renewals. The only rub is that small wineries are hard pressed to afford their services. Thus, the onus is on the owners, or perhaps the tasting room manager or an outside sales person, to use whatever tools are available – phones, calendars, copiers, and Excel spreadsheets.
As frustrating as this all is, one can only sympathize with the needs of states to protect their revenue base. As far as taxes go, wineries are treated no differently than Amazon or mail-order electronics or plumbing parts suppliers. Sadly, because wine is alcohol, consumers in about half of our states have no access to any New York wine except wine produced by large commercial wineries that are represented by wholesalers. Where boutique wine can be shipped, the need for small businesses to deal with both licenses as well as taxes creates steep hurdles.