Out-of-state wine retailers find new momentum

Wine retailers that ship to out-of-state consumers can celebrate several wins of late. A huge win at the Supreme Court, a new state opening up in Connecticut, a positive declaratory ruling in Florida, and pending litigation in multiple states leave retailers feeling optimistic.

While Connecticut consumers have long been able to receive their wine directly from producers, they now have new means of receiving their vino directly to their door. Connecticut joins the likes of 13 other states that permit out-of-state retailers to ship directly to their residents.

On June 5, 2019, Connecticut Governor Ned Lamont signed Senate Bill 647 into law. This bill serves to streamline the Liquor Control Act in the state, allowing consumers more potable purchasing options.

Specifically, Connecticut Senate Bill 647 allows out-of-state retailers to ship wine directly to consumers (DTC) in the state. With this new law, out-of-state retailers are required to:

• Register with the Secretary of State in order to conduct business in Connecticut via a Certificate of Authority
• Register with the Connecticut Department of Revenue Services
• Obtain an Out-of-State Retailer’s Shipper’s Permit for Wine from the Connecticut Department of Consumer Protection (cost $600 +$100 application fee). The permit is available as of July 1, 2019.
• File a report of wine sold and shipped directly to consumers in Connecticut with the Department of Consumer Protection and pay excise taxes
• Collect and remit Sales taxes on wine sold and shipped directly to consumers in Connecticut.
• Ensure the recipient is over 21 years of age and signs for the package
• Ensure package is labelled as containing alcohol at the time of shipping
• Comply with shipping and advertising regulations: Out-of-state retailers are only permitted to ship two cases of wine to an individual in any two-month period. Out-of-state retailers must include their Connecticut Direct Shipper’s permit number on all wine advertisements to consumers in the state, regardless of media type

Additionally, out-of-state retailers wishing to ship directly to consumers in Connecticut must ensure all wine labels are registered with the Department of Consumer Protection (DCP). They can do so by searching for brands here or register brands themselves here. Retailers wishing to make their own deliveries to consumers in Connecticut must obtain an In-State Transporter’s permit from the DCP. If they wish to utilize another business to transport their product, the transporter must hold an In-State Transporter’s permit.

Connecticut isn’t the only state changing its policies on out-of-state wine retailers. In August 2018, Florida’s Department of Alcoholic Beverages and Tobacco issued a declaratory statement that, as a result of a ruling from the Federal District Court in 2005, the state of Florida cannot enforce their prohibition on the DTC shipments of wine from out-of-state retailers.

Connecticut, Florida, and the recent US Supreme Court ruling on Tennessee Wine and Spirits Retailers Association v. Thomas look indicative of a shift away from the recent trend of limiting the access of out-of-state wine retailers to consumers across the country. As recently as December 2017, wine retailers only had direct shipping access to 22% of US consumers. Connecticut Senate Bill 647, the declaratory ruling in Florida, and the US Supreme Court ruling on Tennessee Wine and Spirits Retailers Associate v. Thomas, which could also directly lead to positive results for ongoing retailer shipping litigation in Michigan and Missouri, are showing great potential for increasing direct access to consumers for wine retailers across the country.