Governor Dennis Daugaard has signed into law legislation House Bill 1001, passed by the South Dakota legislature that finally ends the state’s prohibition against wine direct shipping. When the new law becomes effective on January 1, 2016, the gates will be open for winery to consumer shipments to the Mount Rushmore state.
The passage of this bill is a new opportunity for wineries — one more state, with nearly 600,000 residents over the age of 21. Under the new law, wine direct shipper licensees will be able to direct ship up to 12 nine-liter cases of wine per individual, per calendar year.
Want to ship to South Dakota? Here’s what you’ll need to be a licensee:
- $100 fee with the application (renewed on the calendar year)
- Copy of a Federal Basic Permit
- Registration of all products to be sold to consumers
- Registration and remittance of sales tax (state and local)
- The use of Age Verification on shipments
- The use of a wine carrier licensee for shipping
- Filing of a quarterly shipment report
- Remittance of all applicable alcoholic beverage occupational taxes
- Shipment of wines that are only your own production
Common carriers must also obtain a “wine carrier license” in order to process wine direct shipments to South Dakota residents. It’s also important to note that South Dakota is the 5th state to require age verification on the purchaser. This means that prior to shipping any wine to a consumer in South Dakota, a direct-to-consumer licensee must verify the age of the person placing the order by getting a copy of their government issued ID or using an electronic age verification service.
Wineries should initially register each of the products they plan to ship to South Dakota. South Dakota is one of 13 states currently enabled for Product Registration Online (PRO). Active registrations will be valid for both direct to consumer sales and sales to South Dakota wholesalers.
This shipment bill has been in the works for several years now with feedback and counsel presented from wineries, compliance experts, distributors, and lawmakers. The final passage of House Bill 1001 is, for this reason, symbolic of a job well done on the wine direct shipping debate.
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