Kansas Governor Laura Kelly signed HB 2137 into law on May 19, 2021, establishing new regulations affecting the direct-to-consumer (DtC) wine shipments in the state. These regulations became effective immediately.
What is included in HB 2137?
HB 2137 includes provisions that now require both in-state and out-of-state fulfillment houses to register and received a Fulfillment House License, which allows the licensee to handle all logistics on behalf of a special order shipping license holder, including packaging, warehousing, order fulfillment, and shipping services. The license fee is $50 for a two-year term in addition to the application fee and modernization fee. Each location of the fulfillment house needs to be licensed and pay the fees. We recommend starting the application process immediately.
The application process is as follows:
- Step 1: File an Irrevocable Consent to Jurisdiction (ABC-160) with the Kansas Secretary of State, which includes a $35 filing fee.
- Step 2: Apply to the Alcohol Beverage Control (ABC) for a Fulfillment House License:
- Submit a copy of the application form.
- Submit a copy of the Irrevocable Consent to Jurisdiction Form (ABC-160) that has been stamped filed by the Kansas Secretary of State.
- Submit payment of $100 ($50 license fee, $30 new license application fee, $20 modernization fee).
- Step 3: As a part of the licensing process, fulfillment houses must “make reasonable efforts to confirm that any winery that they ship alcoholic liquor for holds a special order shipping license and may rely on the representations of each such winery for such assurance.” So, check to make sure clients are licensed to ship into Kansas.
Fulfillment house licensees must file a monthly report of their shipments electronically by the 15th of the month following shipments. Fulfillment houses should begin reporting as soon as possible.
Additionally, HB 2137 contains a provision that has changed the timing of collecting and remitting gallonage tax from annually to quarterly. Quarter 1 gallonage taxes should be remitted by the 15th of this month.
Lastly, electronic reporting is now mandatory in Kansas. Special order wine shippers can no longer print and mail in their gallonage tax return and sales report as they have done in the past.
As always, Sovos ShipComplaint will continue to monitor for any further changes brought about by HB 2137.
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