Recapping recent significant changes in alcohol DTC legislation
We’ve known for some time that 2021 would be an important and impactful year for direct-to-consumer (DTC) legislation, but as state sessions are starting to close, it’s remarkable how active the year has been already. As we mark 16 years since the Granholm v. Heald Supreme Court decision, a catalyst for DTC legislation, it's clear DTC legislative activity won’t be slowing down anytime soon.
Here’s a quick rundown of 2021’s most important developments to date:
Alabama enacted a bill that would allow DTC shipments from wineries effective August 1. Fulfillment houses that want to ship on behalf of licensed wineries must also obtain a license for each warehouse location they’ll ship to Alabama consumers from.
Following a bumpy start to the DTC law that opened up Kentucky to wineries, breweries, and distilleries last year, the legislature passed a new bill to fix issues related to fulfillment house shipping and make other minor tweaks making the law more workable. Kentucky's law also requires producers to collect three types of tax (sales tax, “wholesale equivalent” tax, and excise tax) from the consumer and ensure all three are “separately identified on the consumer's invoice.”
Florida recently passed an economic nexus and marketplace facilitator bill. Effective July 1, wineries, wine retailers, and marketplaces shipping to Florida will be required to register to collect and remit sales tax if they exceed $100,000 in annual sales.
After initially setting out to ban shipments from fulfillment houses, the Tennessee Legislature reached a compromise that would create a new license for fulfillment houses to ship on behalf of licensed wineries, increase the volume limit for some wineries, and limit shipping to wines produced by the licensed wineries.
Louisiana lawmakers are considering a bill to remove the restriction that bans direct shipments of products already represented by a Louisiana wholesaler.
A bill to create a new license for fulfillment houses to ship wines on behalf of licensed wineries sits on the Governor's desk in Kansas. Separately, Kansas enacted an economic nexus bill, but because wine is exempt from sales tax, wineries will only need to evaluate whether their non-wine sales exceed $100,000.
Wyoming increased their DTC volume limit from four to 12 cases per 12-month period, effective July 1.
Lawmakers are looking to increase the amount of wine that can be shipped to Oregon residents from two cases per month to five cases per month.
Illinois, Maine, and New York, are all considering bills to allow shipments from licensed retailers.
Perhaps the biggest change this year involved the delivery of alcohol from licensed retailers and restaurants. Florida, Oklahoma, and Texas all recently enacted “cocktails-to-go” bills, bringing the total for states with permanent delivery laws to 11. Unlike the laws in Florida and Texas, the Oklahoma cocktails-to-go act expires in one year.
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