A new regulatory framework for direct-to-consumer (DtC) shipping of beverage alcohol in Alaska is set to take effect on Friday, August 23, 2024.
These new rules govern how in-state and out-of-state producers can ship their products to consumers in Alaska following the passage of SB 9 in 2023, an omnibus bill that affected almost every part of the state’s beverage alcohol industry. By setting down clear and manageable requirements for wineries, breweries and distilleries to follow, the Alaska Alcohol and Marijuana Control Office (AMCO) has brought some welcome stability to the state’s DtC channel, which had previously operated under limited regulatory management.
Under the new rules adopted by AMCO, producers who want to ship their products to Alaska consumers will need to comply with the following requirements:
- Apply for and hold a Manufacturer Direct Shipment License, issued by the Alaska AMCO.
- This license will cost $200 and will be effective for two years.
- This license is only available to licensed manufacturers that hold production licenses issued by the TTB (Tax and Trade Bureau) and their home state.
- This license will only be eligible for breweries that produce less than 300,000 barrels of beer per year, or distilleries that produce less than 50,000 proof gallons of distilled spirits per year. There are no production caps for wine producers.
- Pay Alaska state excise tax on all shipments to the state.
- Limit shipments to any individual purchaser to:
- No more than 1.5 liters of distilled spirits per transaction and no more than 4.5 liters of distilled spirits total in a calendar year;
- No more than 18 liters of wine per transaction, and no more than 108 liters of wine total in a calendar year;
- No more than 288 ounces of brewed beverages per transaction and no more than 13.5 gallons of brewed beverages total in a calendar year.
- Only use common carriers that have been approved by the AMCO.
- Not ship to any address in a zip code identified by the AMCO as having adopted a local option rule prohibiting the sale of alcohol.
- Verify at the time of purchase that the purchaser and recipient (if different) of the order are at least 21 years old using either a physical copy of their state-issued ID or an online verification service.
- Provide written or electronic information on the dangers of fetal alcohol syndrome at the time of purchase to the purchaser and recipient (if different).
- Properly label all packages as containing beverage alcohol and require an adult signature upon delivery.
- Retain records for two years on all shipments and make those records available to AMCO upon request.
Notably, Alaska does not have a state-level sales tax, so assuming liability for sales tax is not a requirement for getting an Alaska DtC license. However, the state does allow communities in the state to establish and assess their own sales taxes, and shippers that have economic nexus in Alaska (make over $100,000 in annual gross sales to the state) will need to register with the state’s Remote Seller’s Sales Tax Commission to remit those local taxes.
Further, the allowance for out-of-state retailers to ship DtC to Alaska residents has now been removed.
DtC shippers who have been patiently waiting for final adoption of the new DtC shipping rules can now apply for licenses and begin to service their consumers in the Last Frontier.