Oklahoma to Open for DtC Wine Sales Sooner Than Later – Application Now Available

On October 1, 2018, new rules permitting licensed wine manufacturers to make direct-to-consumer (DtC) shipments to Oklahoma residents will become effective. On that date, Oklahoma will become the 45th state (plus D.C.) to license DtC wine shipments, with only Alabama, Mississippi, Kentucky, Delaware, and Utah remaining closed to DtC wine shipping.

The application to become a licensed Direct Wine Shipper in Oklahoma is also now available (find it here). However, wineries will have to wait for October 1 to begin shipping wine DtC, even if they get a license prior to that date.

That date will have been a long time coming, as Oklahoma residents voted to permit DtC wine shipments as part of an omnibus revamp of the state’s beverage alcohol regulations back in 2016. Belying its nickname, the state delayed implementation of the law as state regulators worked to smooth out the details of how DtC wine shipping would operate.

Indeed, this delayed implementation period has been productive, as DtC wine shipping advocates have worked with the state to remove certain restrictions that would have severely hampered DtC wine shipping in the state, such as a requirement that consumers themselves had to get licensed, and a ban on shipping wine DtC that was otherwise available in the state.

There was even a rather dramatic earlier this year, when Free the Grapes! organized a last minute signature campaign to pass a bill that would have imposed likely fatal restrictions on carriers fulfilling DtC wine shipments. Due to efforts of Free the Grapes! to get hundreds of Oklahoma residents to write to the Oklahoma governor expressing their interest in the bill, DtC wine shipping should proceed a pace — proof that your efforts to support DtC advocates like Free the Grapes! and Wine Institute work.

 

What Do Wineries Need To Know About Shipping DtC When Oklahoma Opens?

Like every other state that permits DtC shipping of wine, there will be some restrictions that shippers must comply with.

For shipping DtC to Oklahoma residents, shippers will have to:

  • Be licensed as a wine producer by their home state and hold a federal Basic Permit for the production of wine issued by the TTB.
  • Hold a Direct Wine Shipper license issued by the Oklahoma Alcohol Beverage Laws Enforcement Commission (ABLE Commission).
    • The application form is now available from the ABLE Commission (find it here). Wineries will need to provide a copy of their home state wine production license, along with extensive information on their corporate structure; financing sources (if applicable); and individual personal history for partners, corporate officers, directors, stockholders, LLC officers, trustees, and other individuals involved in the winery. This could be a lengthy application process so wineries looking to start shipping wine DtC to Oklahoma residents right away on October 1 should begin soon.
    • The Direct Wine Shipper license costs $300, and must be renewed annually for a cost of $150.
  • Not ship more than 6 9-liter cases of wine to any one person in Oklahoma per year.
  • Ship wine only in packages clearly labeled with the words, “CONTAINS ALCOHOL: SIGNATURE OF PERSON AGE 21 OR OLDER REQUIRED FOR DELIVERY.”
  • Use only delivery services that will obtain the signature of a person aged 21 or older at the time of delivery.
  • File an annual report with the ABLE Commission detailing (in a manner to be determined by the ABLE Commission at a later date — we will provide details when we know them) the total amount of wine they shipped into Oklahoma in the previous year.
  • Collect and remit both excise and sales tax on all their DtC sales to Oklahoma residents. These taxes must be calculated as if the sale occurred in the state (meaning both state and local sales taxes will apply). These taxes must be remitted to the state annually.
    • Oklahoma imposes an excise tax on wine of $0.72 per gallon.
    • Oklahoma has a state sales/use tax rate of 4.5%, with additional local rates ranging from 0-7%.
  • Maintain records of their DtC shipments to Oklahoma, in case of an audit from the ABLE Commission.

ShipCompliant by Sovos will be updating its system in time for the October 1 date. Current users can expect these updates to appear in the system in the weeks leading up to the effective date. However, shipments of wine to Oklahoma will not be cleared for compliance until October 1. ShipCompliant users will thereafter be able to track their DtC wine shipments to Oklahoma, check them for compliance, lookup address-specific tax rates, and receive populated tax and shipping returns as required by the ABLE Commission.

 

Find out how ShipCompliant by Sovos can help your business stay on top of compliance in every state by signing up for a free demo.

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