Alabama’s governor signed a winery direct-to-consumer (DTC) shipping bill (HB437) into law on May 13, 2021, making Alabama the 47th state to allow winery DTC. The bill will become effective on August 2, 2021 and will allow wineries to ship up to 12 cases annually. Wineries wishing to ship DTC to Alabama consumers will need to obtain a direct wine shipper license for $200, renewable annually for $150, and pay all applicable Alabama sales and excise taxes. The new law allows the use of “wine fulfillment centers” for DTC shipments, provided the fulfillment center also obtains a license. Fulfillment center licensees must obtain a separate license for each facility they use to ship DTC into Alabama for an annual fee of $500 for the first location and $100 for each additional fulfillment center. Wineries, fulfillment centers, and common carriers involved in DTC to Alabama must each file a quarterly report providing certain details of those operations. HB437 also expanded wine franchise law protection throughout the state, which is perhaps less reason for celebration by wineries.
Tennessee Amends DTC Law to License Fulfillment Houses
The Governor of the State of Tennessee signed HB0742 on May 4, 2021, which will, among other things, allow wineries to continue to use fulfillment houses for DTC sales into the state. An earlier version of the bill prohibited the use of fulfillment houses but was amended to allow fulfillment houses to obtain a license and ship direct to Tennessee consumers on behalf of licensed wineries. The Tennessee fulfilment house license costs $300, renewable annually, plus an additional $50 fee for each additional fulfillment house location to be used to ship wine into the state. The license requirement is effective January 1, 2022; in the interim, wineries can continue using unlicensed fulfillment houses.
Kansas recently passed HB2137, which created a new license for fulfillment houses shipping wine DTC for wineries. The license costs $50 and is good for two years. The new law also imposes typical carton marking, record-keeping and reporting obligations. The requirement that fulfillment houses hold the new license was effective in May 2021, so fulfillment houses shipping wine DTC for wineries will want to apply for the new license as soon as possible.
There are several other pending DTC bills in other states. Delaware may be the next state to enable winery DTC if pending bill HB210 passes. It was just introduced in May 2021, so it has a long way to go before it becomes law. Rhode Island also has pending DTC bills but both are currently on hold pending further study. A promising bill in Louisiana that would have enabled wineries to sell wines DTC that are also available through the 3-tier system passed the House but looked doomed to fail in the Senate and was withdrawn. There will no doubt be more to come on these bills and other DTC activity.
If you’d like more information about these laws or about DTC generally, contact any of the attorneys at Strike Kerr & Johns.
Alcohol.Law is published for general informational purposes only and is not intended as legal advice. Copyright © 2021 · All Rights Reserved · Beverage Law Group, LLP
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