We hope this update finds you well, and our thoughts go out especially to those dealing with the impacts of wildfires in and near wine country. Over here at Sovos ShipCompliant, we continue to make progress with our initiatives for DtC product expansion (we are live with our offerings for DtC beer and spirits! DtC cider will be coming soon), offering Product Registration Online (PRO) renewals functionality for our MarketReady clients, and modernizing our APIs to ensure performant and efficient workflows for all of our ecommerce partners. Of course, we’re also busy prepping for a successful OND and staying on top of all of the regulatory changes in the marketplace to ensure our customers’ compliance.
Staying on top of regulatory changes
In an ever-changing regulatory landscape, it is essential that ShipCompliant is kept up-to-date with changes happening across the United States. That is why we have a dedicated team of experienced researchers ensuring that all relevant reporting and regulation changes are thoroughly researched and updated in our system. This group of researchers comprises attorneys and regulatory specialists tracking changes to forms, filing information, laws and more. This team monitors changes including those to sales and use tax forms, alcohol excise tax returns, label registrations and more and will typically document anywhere from five to 15 form changes per month specific to ShipCompliant. With the power of this team, we are able to keep our forms updated and our customers compliant in a dynamic regulatory environment.
This month we wanted to spotlight in detail two major regulatory changes that have come up over the past few months.
Chicago Liquor Tax Return
- Effective July 1, 2020, the city of Chicago, Illinois implemented a liquor tax applicable to direct-to-consumer wine shippers on shipments originating outside the city and shipped inside the city.
- Chicago requires wineries that have made wine shipments after July 1, 2020 directly to Chicago consumers to register as a Winery Shipper’s Licensee with the city and make monthly payments/file an annual return. The first monthly payment was due August 2020 and the first annual return is due August 2021.
- The tax rates are $0.36 per gallon for wine containing 14% or less alcohol by volume, and $0.89 per gallon for wine containing more than 14% and less than 20% alcohol by volume.
- ShipCompliant has set up the Chicago Liquor Tax Return in the Report Settings to be subscribed to (Annual Return with monthly prepayments due on the 15th of the month).
- Chicago’s online portal can be accessed here.
- This is the first local level excise tax report added to ShipCompliant. The ShipCompliant team will have ears to the ground to see if other local governments follow suit and seek to impose excise collection requirements on out of state wineries.
Louisiana Remote Seller Sales Tax Worksheet
- Effective July 1, 2020, remote sellers making sales into Louisiana are required to register with the Louisiana Sales and Use Tax Commission for Remote Sellers (“the Commission”) and collect, remit, and report all state and local sales taxes, including taxes administered by Parishes.
- Remote sellers are defined as businesses without a physical presence in the state who either make over $100,000 worth of annual sales or have 200 or more separate transactions into the state.
- Remote sellers must collect the state sales tax of 4.45% and local sales tax at the appropriate local rate. They may not continue to collect tax at the combined 8.45% “Direct Marketers” rate. Both the state and local taxes are reported and remitted to the Commission, and not to the relevant parishes.
- Remote sellers have 60 days to begin collecting at the appropriate rate, meaning that remote sellers currently collecting at the combined rate have until September 1 to begin collecting tax at the correct rate. Non-collecting remote sellers must also start by September 1.
- You may have noticed some changes to tax preferences in ShipCompliant, to accommodate this regulatory change in Louisiana. The “Economic Nexus” tax preference appropriately applies all state and local taxes in Louisiana for those registered with the Remote Seller Commission to begin collecting these taxes. The “Voluntary Collection” tax preference remains available to clients that are eligible to report at the uniform local rate of 8.45% as out of state sellers under the remote seller nexus thresholds defined above.
- The new online return required by the Remote Seller Commission will also be available for subscription in ShipCompliant for returns due in September.
- The new Remote Seller Commission portal is located here.
Remember, you can always find updates on form changes along with a run-down of detailed ShipCompliant product changes via our monthly release notes in the Sovos Portal.