Beginning July 1, 2019, Connecticut will become the latest state to permit the direct-to-consumer (DtC) shipping of wine by out-of-state retailers.
Governor Ned Lamont signed SB 647 on June 5. The new law amended many provisions of the state’s alcohol statutes, including the current rules for wineries’ DtC shipments of wine, which now include language opening the state to DtC shipping of wine by retailers.
Retailers looking to make DtC shipments of wine to Connecticut consumers will have to comply with the same regulations that have long applied to wineries. These include:
- License — Retailers must apply for, and receive, a Retailer Wine Shipper’s Permit from the Connecticut Liquor Control Division. The annual cost of this license is $600. (The annual license cost for wineries remains unchanged at $315).
- Consumer volume limits — Direct shippers may ship no more than 5 gallons of wine in any two-month period. This is roughly the equivalent of two 9-liter cases of wine.
- Collect and remit taxes — Direct shippers must remit to Connecticut both excise taxes and sales taxes on their DtC sales to the state. Connecticut’s sales tax rate is 6.35 percent with no local taxes. (Connecticut changed its excise tax rates for wine and spirits in a separate bill; these rates are described below.)
- Report sales — Direct shippers must file a monthly report of wine shipments to the state. This report is in addition to the excise and sales tax returns, and must provide details on each order shipped, such as the recipient’s name and address, and the contents of the package.
- Advertising restrictions — When advertising or offering wine to Connecticut consumers via the Internet or other media, direct shippers must include their Connecticut shipper’s permit number.
- Do not sell below cost — Direct shippers must comply with section 30-68m of the Connecticut Revised Statutes, which prohibits retailers from selling wine in Connecticut for a price less than what they paid for it at wholesale.
- Package labels — Direct shippers must place a label on any package containing wine that reads, “CONTAINS ALCOHOL SIGNATURE OF A PERSON AGE 21 OR OLDER REQUIRED FOR DELIVERY.”
- Obtain consumer signature — Direct shippers must either also hold an in-state transporter’s permit or work only with parties licensed as in-state transporters. In addition, before a delivery can be finalized, recipients of the delivery must show their IDs proving they are of age to receive wine and provide their signature.
With the passage of SB 647, Connecticut joins the small, but growing, ranks of states that permit out-of-state retailers to make shipments of wine direct to consumers. Currently, the other states are: Alaska, Louisiana, Nebraska, Nevada, New Hampshire, North Dakota, Oregon, Virginia, West Virginia, and Wyoming. (California, New Mexico, and Idaho also permit retailers in each others’ states to ship to their residents.)
The opening of another state to DtC shipping is part of a positive trend. By establishing rules and regulations for how retailers can join into the Connecticut DtC market, the state is enabling itself to effectively monitor, tax, and police that market. This, in turn, means the residents of Connecticut can legally access a national selection of wines that might otherwise not be made available locally.
Connecticut also raises excise taxes
In addition to SB 647, the governor signed HB 7427, the state’s budget. This bill includes a 10 percent increase on Connecticut’s excise taxes on wine and spirits, which will become effective October 1, 2019. Thereafter, the taxes on alcohol in the state will be as follows:
- Still wine with an ABV of 21 percent or less: $0.79 per gallon (up from $0.72)
- Still wine with an ABV greater than 21 percent, and all sparkling wine: $1.98 per gallon (up from $1.80)
- Liquor: $5.94 per gallon (up from $5.40)
- Liquor coolers, with an ABV no greater than 7 percent: $2.71 per gallon (up from $2.46)
- Beer, and cider with an ABV no greater than 7 percent: $7.92 per barrel; $3.96 per half-barrel; $1.98 per quarter-barrel; or $0.26 per gallon (remains unchanged)