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South Dakota Opens Doors to Direct Shipping of Wine

Last week, the South Dakota Governor Dennis Daugaard signed a bill (HB 1001) into law allowing the direct shipment of wine and making South Dakota the 43rd state to allow direct-to-consumer shipping of wine. See South Dakota Governor Signs Direct-to-Consumer Wine Shipping Bill into Law. According to The Financial, the law’s provisions go into effect on January 1, 2016, which means wineries have almost one year before they can legally ship to consumers in the state.

Like most states, a winery will be required to obtain a separate license through the state of South Dakota in order to directly ship wine. At minimum, the winery will need to be licensed on the federal level with the TTB (i.e., have a federal basic permit), and pay an annual fee of $100 to obtain a direct shipping license. Id. With this license, a winery may directly ship up to 12 cases of wine per year—produced under the winery’s federal basic permit—to any adult consumer aged 21 years or older within the State during a calendar year. The winery must still perform due diligence, such as verifying the age of the consumer placing the order by obtaining a copy of the consumer’s government-issued photo ID or through an online age verification service.

In addition to the license, a winery seeking to ship directly into the state of South Dakota will have to comply with additional requirements of the state, such as registering labels, as well as pay excise and sales taxes and file quarterly reports. (Not an exhaustive list; for more information, please contact your legal counsel.)

For more information on the bill’s progression, see 2015 Session — Bill History: HB 1001

For more information on direct shipping, licensing, or TTB matters, please contact Lindsey Zahn.

DISCLAIMER: This blog post is for general information purposes only, is not intended to constitute legal advice, and no attorney-client relationship results. Please consult your own attorney for legal advice.

Lindsey A. Zahn

About 

Lindsey is the founder and author of On Reserve: A Wine Law Blog. She is an alcohol beverage and food attorney and is admitted to the New York State Bar.

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