DtC Shipping Laws: Key Updates for Alcohol Shippers

Alex Koral
November 13, 2024

This blog was last updated on November 13, 2024

When engaging in direct-to-consumer (DtC) shipping of alcohol, compliance with different state laws is paramount and so keeping up with law changes is critical. In 2024, the rules in several states for DtC have already been adjusted or will change soon. Here is a review of the major rule changes DtC shippers should be aware of. 

State-by-State Updates to DtC Alcohol Shipping Laws

  1. Massachusetts Tightened DtC Wine Shipping with “Own Production” Rule
    Massachusetts has added an ‘own production’ requirement to its DtC wine shipping law. Under this new rule, licensed wine shippers will only be permitted to ship wines that either they produce or that are produced for them under an exclusive contract. Further, the wine shipper must own the brand name under which the wine being shipped is sold. These own production rules are common and are intended to prevent a DtC shipper from acting as a tacit out-of-state distributor, selling many brands that they have nothing to do with.
    This has been an issue for the Massachusetts Alcohol Beverage Control Commission, which claims that 40% of wine shipments to the state have come from only 20 licensees. Whether this new law will improve this situation in the eyes of the ABCC remains to be seen, but residents of the Bay State will certainly see some reduction in the brands available to ship to them going forward.
  1. Nevada Revises Licensing Requirements for Fulfillment Houses
    Nevada has technically not changed its DtC statute, but it has recently reviewed its law to read that fulfillment houses that facilitate DtC shipments of wine into the state must hold a Certificate of Compliance. Under this new interpretation, all parties sending alcohol into Nevada must be licensed, including agents of otherwise licensed entities.
    Going forward, when a winery applies for a license to ship direct to a customer in the state, it must indicate the specific address where their shipments will originate. If that location is not owned by the winery, the application will not be approved unless the state has an existing record of a Certificate of Compliance for that address. By adopting this new requirement, Nevada joins a grip of other states that require licensing for fulfillment houses.
  1. Maine Announces New Fulfillment House License and Reporting Requirements
    Maine has also added a licensing requirement for fulfillment houses servicing shipments to the state. This rule will take effect on January 1, 2025. fulfillment houses will need to register all locations they will ship wine from at a cost of $60 per address. In addition, fulfillment houses will need to file a quarterly report with the state. Further, Maine has adjusted their reporting requirements for Direct Shipper Licensees.
    Starting January 2025, all licensees will need to file their excise tax return and shipping report quarterly, rather than an annual frequency based on the month their license was issued. While this will mean submitting more returns in a year, it will provide welcome uniformity to the state’s tax filing schedule. This also means that direct shippers will need to file a return in January to cover their shipments back to their last filing in 2024, and then file on a regular basis going forward.
  1. Nebraska’s Brand Registration Deadline Approaches
    Nebraska now requires all brand/labels sold in the state to be registered with the Liquor Control Commission, including all DtC shipped products. An existing registration for three-tier distribution will suffice for DtC shipping—there is no need to double register if a producer is selling their brands in both channels. While the state’s brand registration law has been in effect for several months already, it had granted a term of leeway that is set to end on December 31, 2024.
    One of the most exciting areas of DtC alcohol shipping has been the expansion of the channel to products beyond wine, with the spirits industry being particularly active in lobbying states to change their laws.
  1. New York Expands DtC Shipping to Include Spirits and Cider
    To this, New York also passed a law to extend shipping permissions to include DtC shipment of spirits and cider products as of November 18, 2024. Distillers looking to begin shipping to New York are advised to take note of the laws surrounding shipping, particularly the state-specific reciprocity restrictions around which distilleries it will issue licenses to.
  1. California’s Temporary DtC Spirits Shipping Law Extended… Again
    California also has been active for DtC spirits shipping legislation in the last few years. However, the state has not been able to pass a proper DtC shipping bill and has merely been extending its COVID-related shipping rule. The latest version, passed earlier this year, keeps the “temporary” allowance in effect until January 1, 2026.
    Since this law is only applicable to in-state distilleries, it is in apparent violation of the Supreme Court’s Granholm ruling, and so stands on shaky ground. However, the state continues to promise that it will resolve the issue and pass a proper, nation-wide DtC spirits shipping law next year, which we’re all holding our breath for.

As DtC shipping laws change and continue to spread to additional states, we at Sovos ShipCompliant will be sure to keep you informed. Join us on December 17 for our annual year-in-review webinar, where we’ll discuss the regulatory changes in 2024 along with product updates and reporting best practices.

Register Here

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.

Author

Alex Koral

Alex Koral is Senior Regulatory Counsel for Sovos ShipCompliant in the company’s Boulder, Colorado office. He actively researches beverage alcohol regulations and market developments to inform development of Sovos’ ShipCompliant product and help educate the industry on compliance issues. Alex has been in the beverage alcohol arena since 2015, after receiving his J.D. from the University of Colorado Law School.
Share this post

sales tax vs. use taxes
North America Sales & Use Tax
November 8, 2024
Sales Tax vs. Use Tax, Explained. Who Reports What, and When?

This blog was last updated on November 19, 2024 One of the core concepts in sales tax compliance is also one of the most frequently misunderstood: the differences between sales tax and use tax. These tax types may look similar on the surface, but knowing the differences is essential for staying compliant and avoiding costly […]

2025 bond project
North America Tax Information Reporting
November 4, 2024
2025 NAIC Bond Project – The Insurer’s Guide

This blog was last updated on November 14, 2024 The regulatory landscape for insurance companies is undergoing significant changes with the Principles-Based Bond Project which is set to take effect on January 1, 2025. These changes, driven by the National Association of Insurance Commissioners (NAIC), will impact how insurance companies classify and value bond investments, […]

E-Invoicing Compliance EMEA VAT & Fiscal Reporting
November 1, 2024
VAT in the Digital Age Approved in ECOFIN

This blog was last updated on November 7, 2024 The long-awaited VAT in the Digital Age (ViDA) proposal has been approved by Member States’ Economic and Finance Ministers. On 5 November 2024, during the Economic and Financial Affairs Council (ECOFIN) meeting, Member States unanimously agreed on adopting the ViDA package. This decision marks a major […]

what is peppol
E-Invoicing Compliance North America
October 29, 2024
What it is PEPPOL?

This blog was last updated on October 29, 2024 Peppol E-invoicing explained: What it is and how it works The global adoption of electronic invoicing is accelerating. Governments worldwide are pushing to adopt e-invoicing to digitally transform their national systems and, often, to close the VAT gap. While many countries have introduced their own e-invoicing […]

remote sellers sales tax
North America Sales & Use Tax
October 28, 2024
Will Congress Act to Simplify Remote Seller Sales Tax Collection

This blog was last updated on November 5, 2024 When the United States Supreme Court ruled in 2018, that South Dakota’s law imposing sales tax collection requirements on sellers without in-state physical presence was constitutional, it did not grant states free reign. States are still responsible for ensuring that their sales tax requirements are manageable, […]