The Latest on Retailer Direct-to-Consumer (DtC) Shipping

Lizzy Connolly
October 15, 2021

Retailer direct-to-consumer (DtC) shipping still has a way to go in terms of being as widely accepted as DtC wine shipping. However, there has been continued interest in making that a reality. 

Sovos ShipCompliant keeps a close watch on the latest updates in the beverage alcohol industry, and we’ve gathered a few of the top recent headlines related to DtC retailer shipping. 

Court case updates from NAWR

Tom Wark, executive director at the National Association of Wine Retailers (NAWR) provided a rundown of current federal court cases debating the effort to open more states for interstate wine retailer-to-consumer shipments

The Granholm v. Heald Supreme Court case made clear that a state’s alcohol laws may not pursue legitimate state interests through discrimination against out-of-state economic interests without demonstrating with concrete evidence that no alternative, non-discriminatory options exist. The Tennessee Wine v. Thomas decision confirmed that this principle applies to retailers in addition to producers. 

In nearly every instance when these lawsuits are filed in federal court, the state’s wholesalers petition the court to “intervene” in the case, making them defendants along with the state. This means those challenging the law find themselves up against the state and the state’s wholesalers. 


Wark noted that while it is not illegal in any state for consumers to purchase wine from an out-of-state retailer, it can be illegal for a buyer to have legally purchased wine shipped to them. There are currently eight states with lawsuits challenging the DtC retailer wine laws. 

Read Wark’s full breakdown here

The cost of shipping wine

Free shipping is no longer just a “nice to have” for consumers — it’s become an expectation. However, DtC wine shipping costs continue to creep upward. But why?

Larry Cormier, Sovos ShipCompliant vice president and general manager, spoke with Pix Wine about what alcohol producers and retailers are facing. It’s largely driven by the complicated compliance environment, pushing forward high out-of-pocket costs to pay for permits, licensing fees and paperwork.

Wine still accounts for about $500 million a year in revenue for FedEx and UPS, which means that those organizations are willing to continue managing the attendant paperwork, bureaucracy and regulation. 

Read the full Pix Wine article here

The ups and downs for retailers shipping DtC

Alex Koral, Regulatory General Counsel at Sovos ShipCompliant, provided further detail on recent changes for retailers shipping DtC in a contribution for Wine Industry Advisor. For starters, Idaho and Nevada altered previous stances on residents receiving wine shipments from out-of-state retailers. 

“These reversals in law come as retailers and advocates continue to fight in court, with limited success, to gain the right for DtC shipping in more states,” Koral wrote. “At the same time, retailers across the country have had to shut down shipping programs at the behest of carriers, who themselves face scrutiny for any and all improper shipments state regulators hear rumors of.”

Koral explains how the Supreme Court case Granholm v. Heald started to pave the way for DtC wine shipping, “as long as the wineries would agree to get licensed by the destination state and abide by a variety of regulatory requirements.” But does that apply to retailers? What can retailers do to also legally ship wine to consumers? 

While of course it would be a great boon to have the Supreme Court eviscerate discriminatory state laws regarding DtC shipping by retailers, it will not be sufficient in itself.


Check out the full Wine Industry Advisor article here

As always, stay tuned to Sovos ShipCompliant for the most up-to-date information on DtC alcohol shipping.

Take Action

Learn more about managing your DtC alcohol shipping compliance.

Sign up for Email Updates

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


Lizzy Connolly

Share This Post
Share on facebook
Share on twitter
Share on linkedin
Share on email

North America Sales & Use Tax
December 2, 2021
Sovos Global Tax Determination Seamlessly Handles Black Friday, Cyber Monday Sales

While Black Friday and Cyber Monday 2021 didn’t break records for ecommerce sales, the numbers still showed that online shoppers were out in full force. A return to in-store shopping, global supply chain issues and the continuing pandemic were all cited as likely key factors in the small drop in online shopping numbers this year. […]

EMEA Tax Compliance VAT & Fiscal Reporting
December 2, 2021
How to Prepare for a VAT Audit

In our previous blog, we looked at the challenges that businesses face in submitting VAT and other declarations on an ongoing basis. However, the compliance cycle doesn’t end there as tax authorities will carry out audits for a variety of reasons to validate declarations. Why do tax authorities carry out audits? When VAT returns consisted […]

December 1, 2021
Looking Back at Beverage Alcohol Regulatory Change in 2021

As 2021 comes to a close, perhaps there is small comfort in knowing that the old adage of “the only constant is change” remains true for beverage alcohol. Rules and regulations on direct-to-consumer (DtC) shipping are adjusted, more states are opening options for DtC shipping and economic nexus continues to impact how suppliers, shippers and […]

North America Tax Information Reporting
December 1, 2021
IRS Grants Permanent Relief for ACA Recipient Forms 1095-B & C

The IRS released Proposed Regulations this week that permanently extends the time for businesses to provide the Recipient copy of Forms 1095-B and 1095-C. Rather than continue to issue annual Notices to extend the date to issue the statement to the recipient, these regulations propose to permanently amend §1.6055-1(g)(4)(i) i to automatically grant filers a […]

North America Unclaimed Property
December 1, 2021
Delaware Unclaimed Property VDA Notices

Time is running out for those who received the DE SOS’s invitation to participate in the Delaware VDA program in February and June.  Extensions granted to companies that received the invitations in February will expire Friday, July 30th.  Companies that received the June invitations have until August 10th to respond. If a company is interested […]