Shipping to consumers
Compliance Service of America has been helping wineries and retailers take full advantage of direct shipping opportunities for over 15 years. During that time, direct-to-consumer (DTC) sales privileges have proliferated and become much more diverse and complex. The states have also become more determined and able to enforce the various rules for exercising these privileges. So, while wineries and retailers have a lot to gain from direct sales to consumers, they also have a lot to learn and comply with in order to legally sell to consumers out-of-state.
Whether you’re new to DTC shipping or a long-time veteran, using CSA’s DTC services will reduce your learning curve, workload, and risks of violations when selling to consumers nationwide.
Thinking of starting or expanding your DTC customer base? Look before you leap. Before courting consumers in a particular state, it’s wise to learn the legal requirements for DTC sales in that market, and make informed decisions.
For example, several states limit DTC sales to wine of the winery’s own production. Some states’ license applications may surprise you by requiring complete disclosure of business structure and ownership information, foreign entity qualification, high annual license fees, and more, in order to qualify for the DTC privilege. Once you’re licensed, most states have monthly, quarterly, or annual tax reporting requirements to maintain. So, when thinking of entering new DTC markets, take advantage of CSA’s expertise in:
- Planning and prioritizing which markets to enter
- Obtaining the necessary permits, licenses, and tax registrations in your target states
- Understanding your options for fulfilling your reporting obligations
CSA specializes in helping develop marketing strategies involving direct shipping, such as wine clubs and internet outlets for wine, to help our clients shape the trends of tomorrow.
CSA’s knowledge and experience is your on-ramp for adding direct-to-consumer sales to your bottom line.
Because every state has its own laws and requirements for direct shipping, selling to consumers nationwide is a time-consuming and intricate business. That’s why clients turn to CSA for compliance assistance.
Most states that allow direct shipping issue licenses or permits for that purpose. Most of these approvals must be renewed regularly—some annually, some at longer intervals. Making it even more complicated, some licenses have a fixed renewal date, others renew on license anniversaries. It’s a lot to keep track of—and at times of the year when many states’ licenses renew on the same date, it’s a lot to do! We plan these deadlines into our annual workload so our clients don’t have to.
In addition to renewals, DTC licenses and permits need to be updated when information changes—for example, when a winery moves, changes its business name, elects new officers, or reallocates ownership percentages. In addition to informing TTB and your home state licensing authority, wineries selling direct may have dozens of other agencies to notify—each with their own undocumented procedures for doing so. CSA’s expertise is especially helpful in meeting these and other non-routine requirements.
Shipping and tax reports
Direct sales to consumers cut out the middlemen (wholesalers and retailers). Wineries pocket the extra profits, but also shoulder the extra burden of collecting and reporting taxes in each state. In many jurisdictions, both excise taxes (based on gallons sold) and sales taxes (based on dollars paid) must be remitted, generally in separate reports due at separate times. Let us de-mystify these complex requirements and help you consider your options for efficient reporting.
Several states require direct sellers to register the labels of products to be sold to their residents. Approval turnaround times vary from one day to over a month. When a new release or club offering is planned, we can help you take these timelines into account, and even handle the paperwork for you.
Many direct-to-consumer sales licenses are available to wineries only, but thirteen states give retailers access to their residents. As of January 1, 2024, retailers may direct ship to customers in the following states:
- California (2)
- Connecticut (4)
- District of Columbia (1)
- Florida (1)
- Louisiana (4)
- Nebraska (4)
- New Hampshire (4)
- New Mexico (3)
- North Dakota (4)
- Oregon (4)
- Virginia (4)
- West Virginia (4)
- Wyoming (4)
- No license needed
- No additional license needed if California retailer
- No additional license needed if California retailer (reciprocal state)
- License required