On November 29, the Arizona Department of Liquor Licenses and Control (DLLC) released the application for the new Series 17W Direct-to-Consumer (DtC) Wine Shipment License. As discussed in a previous blog post this new license is available to wineries of all sizes, granting them permission to make DtC sales to Arizona residents. This new license applies to both onsite and offsite sales, so going forward, to make onsite DtC sales to Arizona residents, a winery must have a 17W license.
Applicants must have an Arizona Transaction Privilege Tax (TPT) number. (In Arizona, TPT serves as the equivalent of sales tax, and is due on DtC sales of wine; a monthly TPT return must also be filed, even if no sales have been made in the prior filing period.) The online application for a TPT license can be found here. It takes about 6-8 days for the Arizona Department of Revenue to process an application. You must have a TPT license number before you can apply for a type 17W license.
To apply, you must supply the DLLC with a copy of both your TTB Federal Basic Permit and your home state license. These copies can either be mailed to the DLLC, or electronically submitted in a PDF format.
The DLLC must also receive a payment of $225 before it will process an application. This payment must be mailed to the DLLC, and accompany an invoice that is generated after you fill out an application.
Once a winery receives its new 17W license, it may begin selling directly to Arizona residents. Compliance rules for these shipments include:
- Age Verification – wineries must either receive a copy of the purchaser’s license, indicating they are over 21 years of age, or use an age verification service.
- Labelling – all packages must be conspicuously labelled with the words, “CONTAINS ALCOHOL, SIGNATURE OF A PERSON AGE 21 OR OLDER REQUIRED FOR DELIVERY”
- Annual Reporting – a report is due to the DLLC by January 31st every year indicating all of the DtC sales made the previous year. The first report will not be due until January 31, 2018, to report sales made in 2017. Sales made in December 2016 under a 17W type license do not need to be reported to the state; however, wineries should maintain records of these sales in case the Liquor Commission conducts an inquiry.
- Tax Payments – all TPT and Luxury Taxes are due on every DtC sale.
- Customer Aggregated Volume Limits – Arizona residents are limited on the amount of wine shipments they may receive from any one winery in a calendar year. This amount is scheduled to increase over the next few years, but in 2017, this limit is six nine-liter cases of wine per person per winery.
Notably, the addition of the 17W type license does not replace the existing Farm Winery license. Therefore, wineries with under 20,000-gallon annual production, that already have a Farm Winery license can continue to sell DtC under that license.
A 17W type license must be renewed annually in February.
If you have a ShipCompliant account, this new license and the accompanying rule set will soon be available.