Ohio to Permit DtC Shipping for Larger-Scale Wineries

Alex Koral
July 2, 2021

As direct-to-consumer (DtC) shipping of alcohol has become an increasingly valuable market for suppliers and manufacturers over the last many years, regulatory restrictions in states have hampered the ability of certain parties to enjoy the same benefits. However, with the passage of HB 110 in Ohio, recently signed into law by Governor Mike DeWine, a key limitation on wine DtC shipping will soon go away.

Currently, Ohio will only issue a license for DtC shipping to wine manufacturers that produce less than 250,000 gallons of wine annually (and as we know, holding an active license is often a prerequisite for DtC shipping of alcoholic beverages). HB 110, though, contains a key provision establishing a new S-2 type DtC shipping license that will be available to wineries producing more than 250,000 gallons of wine per year. An S-2 type license will have an initial cost of $250, with an annual renewal fee of $100.

The changes in HB 110 are set to become effective on September 28, 2021.

This change will create a two-tier schema for DtC shipping of alcoholic beverages in Ohio, with smaller-scale wineries and beer manufacturers operating under the existing S-1 DtC shipping license, while larger-scale wineries will require a new S-2 type license. But the availability of this new license is very good news for the DtC wine shipping industry and Ohio consumers as many more wineries that were previously excluded from the Ohio market will soon be able to ship there.

Notably, the DtC compliance rules for S-1 permit holders are unchanged by HB 110, so wineries and breweries currently shipping DtC to Ohio consumers should not see any adjustments to their current regulations. Wineries that will soon ship under a S-2 license will also be required to abide by the established regulations on S-1 licensees, including making good faith efforts to verify the age of purchasers at the time of sale, selling only wines that they directly manufacture themselves, and collecting and remitting all applicable Ohio sales and excise taxes.

In addition to establishing the S-2 DtC shipping license for larger-scale wineries, HB 110 creates new provisions for fulfillment houses servicing shipments to the state. These new provisions echo similar new rules established recently in Tennessee and Kansas. Under these provisions, fulfillment houses are required to register with Ohio prior to fulfilling shipments of alcohol and must file an annual report of the shipments they serviced. Type S-2 licensees using fulfillment houses will be required to only use those fulfillment houses that abide by Ohio’s new regulations.

HB 110 also makes clear that the S-1 and S-2 type DtC shipping licenses are only available to wine or beer manufacturers, and not to businesses licensed as retailers in Ohio or other states. This provision is notable in light of action by Ohio over the last couple of years, under the 21st Amendment Enforcement Act, to crack down on apparent shipments by unlicensed businesses.

The change to Ohio’s DtC wine shipping laws to allow larger-scale wineries to join the market has been a long time coming, and reflects the ongoing efforts by groups such as Free the Grapes! and Wine Institute to effect positive change for the DtC shipping market. A similar restriction in New Jersey, restricting wineries that produce more than 250,000 gallons of wine annually from DtC shipping there, is also targeted for change. We all certainly hope that New Jersey will soon follow the lead of Ohio and remove this barrier on New Jersey residents’ ability to fully enjoy the benefits of an open, though regulated, DtC wine shipping market.

Take Action

Find out how ShipCompliant Direct can help with your DtC compliance processes, from license management to real-time compliance checks and tax determination and reporting.

Sign up for Email Updates

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


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

North America ShipCompliant
September 26, 2023
How Can Women-Led Beverage Alcohol Companies Change the Industry?

The beverage alcohol industry might no longer be strictly viewed as a “boys’ club,” but there are a minority of women leading organizations in the space. However, the number of women-led wineries, breweries and distilleries is on the rise, which – as we’ll explain – is likely a very positive thing for the industry. Let’s […]

North America ShipCompliant
September 25, 2023
Potential Government Shutdown Will Affect Beverage Alcohol Industry

Unless Congress is able to pass an appropriations bill in the next few days, the U.S. government is set to shut down all nonessential services effective October 1, 2023. This will include (among many other agencies) the Alcohol and Tobacco Tax and Trade Bureau (TTB), which will impact the beverage alcohol industry. If the shutdown […]

EMEA VAT & Fiscal Reporting
September 25, 2023
VAT in the Digital Age – Union One Stop Shop (OSS) Expansion

Entering into force on 1 January 2025, the EU Commission’s VAT in the Digital Age (ViDA) proposals have been introduced in an effort to modernize VAT across the EU.  One pillar of ViDA is the “single VAT registration,” which would reduce compliance costs for businesses. The Commission proposes to achieve this by expanding the Union […]

North America Tax Information Reporting
September 25, 2023
Why Conduct a Pilot Season for Tax Information Reporting?

Another tax information reporting season is just around the corner and now is the time to start preparing your teams handling forms such as Series 1099, 1098, 1042-S, 3921, 5498, W-2, W-2G and more. Getting your teams ready and testing your reporting process ahead of January ensures you are set up for a successful season. […]

North America Tax Information Reporting
September 21, 2023
Sovos Education Returns to Orlando with Statutory Accounting CPE

If you didn’t join us in D.C. or San Francisco earlier this year, you won’t want to miss one last opportunity in 2023 to take part in live continuing education. Sovos Education is returning to the Orlando area for a full week of statutory accounting CPE opportunities and we’re hoping to see you there. Sun […]