North Dakota tax laws are being interpreted by the Office of State Tax Commissioner to require out-of-state direct shipper licensees to collect and remit local sales and use taxes on wine shipped to consumers in ND, in addition to the 7% state alcohol beverage gross receipts tax.
A winery that has been issued a Direct Shipper license is required to collect local sales and use taxes even if the licensee does not have nexus within the local taxing jurisdiction. The 7% state alcohol beverage gross receipts tax and local sales and use taxes are also imposed on the cost of shipping.
Prior to making shipments into ND a winery must obtain a Direct Shipper license and a Sales and Use Tax Permit. Taxpayers may choose to file paper sales and use tax returns or file online via the ND Taxpayer Access Point (TAP).
A return form will be mailed for all paper filers and an email reminder for all TAP filers based on the filing frequency assigned at the time of registration. A return must be filed for each reporting period even if no sales were made or no tax is due.
Direct Shippers are required to:
- pay an annual $50 license fee,
- pay liquor tax on the total gallons of wine shipped to ND consumers and
- file a direct shipper’s annual tax report.
More information on the direct shipper license and reporting requirements are available on the State Tax Commission website.