Minnesota is currently one of three states that allows wineries to make direct shipments from off-site sales without a permit, along with Alaska and Florida. That would change under Minnesota HF 791 (and companion bill MN SF 1418), which is currently being reviewed by the Committee on Commerce and Regulatory Reform.
The new bill would create a standard permit system for wineries begging on July 1, 2017 and would also introduce several new provisions that wineries must comply with, including:
- 2 case per calendar year volume limit
- Wineries must submit all of the addresses from which shipments will originate (including winery warehouses and fulfillment houses)
- Wineries must provide a list of all Third Party Providers (TPPs) that they will be working with. Presumably this refers to fulfillment houses (aka third partly logistics – 3PL) companies, but it’s not perfectly clear in the bill text
- Annual license renewal by January 1st of each year
- Restricts shipments to wines of the “winery’s own production”
- Any TPP that is operating on behalf of wineries must first verify that the winery is properly permitted in Minnesota. TPPs must also submit a monthly report of shipments into Minnesota, “unless the direct ship winery has supplied the required statement to the commissioner”
- Wineries must collect gross receipts tax, sales and use tax, and a monthly report to the commissioner detailing each wine shipment
- Restricts common carriers (FedEx and UPS, for example) from making shipments unless the carrier confirms that the winery is properly licensed. The commissioner is required to provide a list to the common carriers and the TPPs on a monthly basis of all licensed wineries.
Our Take: This bill isn’t written very well in its current form. Many of the provisions seem insufficiently crafted or thought-through. However, otherwise it seems like a fairly standard direct shipping bill that allows wineries to ship with a permit including volume limits and taxes, but prohibits retailers from doing the same. The common carrier and TPP provisions are more and more becoming standard fare in new wine shipping bills.