7 end-of-year compliance topics to keep an eye on
Updated 12.19.19: The Senate finalized a one-year extension of the Craft Beverage Modernization and Tax Reform Act passed by the House of Representatives.
As the rush of the 2019 holiday sales season winds down, we wanted to surface a few things that will help you hit 2020 in stride. We hope this roundup will help you cross one more thing off your mile-long December to-do list so you can enjoy that nice winter break.
- The Craft Beverage Modernization and Tax Reform Act (CBMTRA), which took effect two years ago to reduce federal excise taxes, will expire December 31, 2019, if an extension is not signed into law. On December 17, the U.S. House of Representatives passed a one-year extension as part of a broader 2020 appropriations bill. On December 19, the U.S. Senate finalized passage through Congress. It now moves to presidential approval.
- 2019 is coming to a close with no new states added to the list of 46 states that allow wineries to ship to consumers. Alabama, Arkansas, Delaware, Kentucky, Mississippi, Rhode Island, and Utah still prohibit offsite shipments.
- Wine retailers are feeling momentum following a favorable ruling in the Tennessee Wine Supreme Court case, and the addition of two states (Connecticut and Florida) to bring the retailer direct-to-consumer (DTC) map to 16 states and counting.
- The Texas Alcoholic Beverage Commission (TABC) plans to audit all 1,600 direct shipping licensees and has begun the first few tranches, focused on the biggest shippers first.
- The California Consumer Privacy Act (CCPA), which is roughly similar to the General Data Protection Regulation (GDPR) privacy rules in Europe, takes effect on January 1, 2020. However, final rules have not yet been published, and a compliance grace period is expected. See this fact sheet for more information on the CCPA.
- The California ABC put out an advisory on the automatic renewal of (wine, beer, spirits, or other subscription) clubs. Given recent enforcement action, it’s important to review your subscription offerings to make sure they comply.
- Many states adopted economic nexus rules and/or laws following the 2018 South Dakota v. Wayfair, Inc. Supreme Court ruling. Although wineries shipping DTC were already required to register for sales taxes in most states, a few states implemented laws that do have impacts on wineries. For example, California now requires business selling more than $500,000 in California to pay district taxes, and Colorado requires sales tax registration and remittance of state, special district, and “state-collected” local taxes if businesses sell more than $100,000 to Colorado consumers.
The 2021 sales tax changes report: midyear update
Your guide to navigating the complicated world of tax compliance and preparing for the future
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