An end-of-year checklist for beverage alcohol sellers

Since alcoholic beverages are a heavily regulated product, beverage alcohol sellers must comply with many federal, state, county, and city requirements. A number of tasks must be completed on an annual basis. This end-of-year checklist for beverage alcohol sellers aims to help you understand those requirements, so you can take care of what needs to be done in a timely manner.

1. Renew and modify licenses as required

Unlike many other business licenses, beverage alcohol licenses typically need to be renewed and if necessary, modified every year. One reason for this is it provides the states with up-to-date information about each licensee. Another is it helps ensure individuals with a criminal background don’t obtain a beverage alcohol license (states generally require all applicants to get a background check). 

Fees to renew a license vary from state to state.

It’s worth noting that different licenses can expire at different times within a state, and times can differ from state to state. Thus, in Louisiana, Alcohol and Tobacco Control (ATC) licenses expire December 31 of each year, while Louisiana Department of Revenue licenses expire annually on June 30.

Direct-to-consumer (DTC) licenses must be renewed at the end of each calendar year in several states, including:

• Georgia
• Hawaii (and four counties in Hawaii)
• Massachusetts 
• North Dakota
• Oregon

Other states require direct shippers of beverage alcohol to renew their license each year by the first date of issue. In other words, if you first obtained your license in March 2015, you’d need to renew it by March each subsequent year. Still, other states work on a different schedule.

DTC licenses expire annually on October 1 in Ohio, yet local liquor permits for some parts of Ohio expire each year on February 1, and local liquor permits for other parts of the state expire annually on June 1. The last day to file a renewal application without penalty fees in Ohio is usually two to three weeks before the permit expires; applications filed after that date may be subject to a 10% penalty fee per location.

Don’t put off renewing your license

In fact, it’s best to avoid waiting until the last minute to renew your beverage alcohol license. Many states require licensees to submit renewal applications before the license expires, and as in Ohio, there may be penalties for late applications. The Georgia Department of Revenue recommends businesses renew before November 1 even though DTC licenses are good through December 31.

Many states now have online portals for license renewals, and where they exist, these are generally preferred over paper renewals. The Ohio Division of Liquor Control accepts paper and online applications, but cautions against filing both: “If you filed online, discard the paper application.”

Modify your license

On top of annual licensing requirements, states generally have a separate license modification option for beverage alcohol licensees whose circumstances have changed. Thus, a license modification is required when a beverage alcohol business changes ownership, location, products, etc. 

Whenever any aspect of your beverage alcohol business changes, you need to file a license modification and notify all pertinent agencies. It’s good to review your business and modify licenses annually, if needed. It’s better to work such reviews into your quarterly cycle.

2. Renew product registrations as required

Many states also require businesses to register every beverage alcohol product they sell and to renew these registrations annually. Fees to renew product registrations vary by state and, in some states, by product; for example, there are fees to renew spirits in Georgia but not wine, and fees to renew wine products in Maryland. Some states, such as Hawaii, don’t charge a fee for product registrations.

Depending on the state, it may be possible to list multiple products of the same type of alcohol on one application — so your sauvignon blanc could be listed on the same application as your pinot noir. Generally, however, different applications must be submitted for different alcohol types: You’d need separate applications for beer products, wine products, and spirits products.

Like licensing requirements, product registration requirements also vary by state. For example, New Jersey product/brand registrations expire annually on December 31; brand registrants may initiate the renewal process on or after November 15 and must submit label renewals by November 30.

Renewal applications in New Jersey cover products registered prior to November 15. Registrations for products registered after November 15 of a year are good until December 31 of the following year. New Jersey allows a bit of a grace period, but products that aren’t renewed as required on or before January 14 will automatically expire.

Brand label registrations in South Dakota must also be renewed every year by December 31. The initial registration fee is $25 and additional brand label registration fees are $17.50.

States like Hawaii that don’t have product registration requirements may still have some kind of rule governing product labels.

3. Check for rule/policy changes that could impact annual returns

Change is a constant in business, especially the beverage alcohol business. In recent months, for example, Ohio created a new DTC permit for larger wineries, Tennessee developed an online application for its new Fulfillment House License, and the Texas Alcoholic Beverage Commission instituted a raft of compliance changes.

It’s best practice to track such changes as close to real time as possible, and to review them at the end of each year to determine whether rule or policy changes will impact your annual returns. That’s a big job.

To keep your finger on the pulse of change:

• Check out DTC wine shipping tax rates and rules by state
• Visit the Avalara Tax Desk
• Read Wine Institute state compliance alerts
• Attend a webinar
• Explore Avalara Tax Changes 2022
• Learn more about Avalara for Beverage Alcohol