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New York Is Open for Business — Or Is It?

Alcohol Business is Threatened

Last week, the Albany newspaper Times Union published my most recent op ed on the Empire Wine’s legal battle with the NYSLA. The article discusses the background between the two parties, as well as the catastrophic business environment that could develop in New York State from the Authority’s interpretation of its regulations. New York State claims to be open for business—but is it really?

To read more, please see the original article at Alcohol Business is Threatened.


Bartholomew-Jaxon-Coumbia -ValleyLast week, Komo News reported that a Seattle-based winery, Bartholomew Winery, was forced to change the name of one of its wine brands after receiving a cease and desist letter from Jackson Family Wines. See Seattle Winery Forced to Change Name, Label After Cease-and-Desist. The wine brand, Jaxon, is reportedly named after the son of the winemakers. While the current vintage for sale is marketed as a 2010, Komo News reports the winery has marketed the Jaxon line since year 2007 and produces about 1,200 bottles per year. Id. However, Jackson Family Wines (owner of the Kendall-Jackson wine brand) recently sent a cease and desist letter to Bartholomew Winery, arguing that the Jaxon label threatens the Kendall-Jackson wine brand.

In particular, according to Komo News, the letter stated the following:

  • The use of JAXON is likely to cause confusion among wine consumers and dilute the JACKSON FAMILY mark; and
  • Thus, Jackson Family Wines requested that Bartholomew Winery cease use of the JAXON mark on any wine products or related goods or services.

In this particular instance, the owner of Bartholomew Winery pursued the (legal) path of least resistance and chose to abide by Jackson Family Wines’ letter. This means Bartholomew Winery, a micro winery, will avoid a potential legal battle with a company with significant market power. In doing so, Bartholomew is forced to change its labels, labeling, website, as well as likely apply for new label approvals on the federal and state levels. Luckily for Bartholomew, this appears to only impact one of its wine lines, as opposed to its entire name (i.e., “Bartholomew”), which may have contributed to the winery’s decision not to fight the cease and desist letter. If the winery’s name was at issue, the owner may have responded differently. (Also fortunately for Bartholomew, the matters seems to have been resolved somewhat amicably and the winery was permitted to sell remaining bottles of Jaxon.)

This dispute is just one of many that has erupted in the wine, beer, and spirits world in relation to trademark. Last week, Moët Hennessy was hit with a trademark infringement suit over its Délice dessert wines. See Moet Hennessy Hit With Suit Over Delice Wine Trademark. In a very thoughtful article, NPR recently discussed the rise of legal disputes amongst craft brewers. See Craft Brewers Are Running Out Of Names, And Into Legal Spats. Much of this article holds true for the wine industry; as in this case, it is unlikely that Bartholomew Winery intentionally infringed upon the mark of another winery, but Jackson Family Wines also has interest in protecting its mark—and inability or unwillingness to defend its mark could be viewed as market weakness and/or open a window of opportunity for competitors to use similar marks.

For more information on wine or alcohol law, labeling, or trademark, 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.


TTB is accepting comments through June 15, 2015 on three proposed American Viticultural Areas (“AVAs”), as per a proposed rule in the Federal Register on April 14, 2015. The proposed AVAs are as follows:

  1. Lewis-Clark Valley Viticultural Area (Notice No. 149Docket No. TTB-2015-0005): The proposed AVA of Lewis-Clark Valley includes 306,650-acres in sections of Nez Perce, Lewis, Clearwater and Latah Counties in Idaho and Asotin, Garfield, and Whitman Counties in Washington. This proposed rule also suggests a modification in the boundary of the currently-established Columbia Valley AVA to eliminate overlap with the proposed Lewis-Clark Valley AVA. One comment has currently been submitted with respect to this proposed rule, in addition to a collection of letters supporting the proposed AVA. For more information, see Letters Supporting Lewis-Clark Valley AVALewis Clark AVA Petition, and Lewis-Clark Valley AVA Petition (Tables).
  2. Eagle Foothills Viticultural Area (Notice No. 150Docket No. TTB–2015–0006): The proposed AVA of Eagle Foothills includes 49,815-acres in the counties of Gem and Ada in Idaho. Eagle Foothills is located entirely within the currently-established AVA Snake River Valley. To date, no comments have been received, however a very thorough petition (including evidence of for the name) was submitted to TTB. For more information, see Eagle Foothills AVA Petition and Name Evidence for Eagle Foothills.
  3. Lamorinda Viticultural Area (Notice No. 151Docket No. TTB–2015-0007): The proposed AVA of Lamorinda includes 29,369-acres in Contra Costa County, California. There are presently two comments fully supporting the proposed AVA, in addition to the petition to establish the Lamorinda AVA. See Lamorinda AVA Petition.

AVAs exist to allow vintners to better designate their wines as viticultural areas have distinct profiles and can often relay significant information to a consumer about a wine. In a proposed rule, TTB summarizes evidence received from petitions detailing the name, boundaries, and distinguishing features of each proposed AVA. Evidence often includes the meso-climactic, geological, and historical information of each individual AVA. 

For more information on wine or alcohol law, AVAs, 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.


In January, On Reserve reported that Vignerons de la Méditerranée (“VM”) filed a complaint in the Supreme Court of the State of New York County of Westchester against Harrison-based importer Pasternak Wine Imports. See Vignerons de la Méditerranée sues Westchester County Importer Pasternak. The complaint named Domaines Barons de Rothschild (“DBR”) as a co-defendant to the complaint. Pasternak was the U.S. importer of the French wine company and in its complaint, VM claimed breach of contract with damages of over $600,000. The complaint also alleged several other causes of action including implied covenant of good faith and fair dealing, unjust enrichment, tortious interference, and unfair competition.Pasternak Wine Imports

On Friday, defendants filed an answer, along with affirmative defenses and counterclaims, to plaintiff’s original complaint. See Pasternak Wine Imports, LLC Answer, Affirmative Defenses, and Counterclaims. Defendants denied the majority of plaintiff’s original allegations, and provided some affirmative defenses, of most relevance:

  • Defendants affirmatively stated that Pasternak Wine Imports was the name of a general partnership (now inactive) organized under the laws of Connecticut. The current company is organized under the laws of New York and is an LLC.See id. at 2.
  • DBR formerly owned a 35% partnership interest in Pasternak Wine Imports and, since 2012, has acquired 100% of the LLC membership of Pasternak LLC (the active LLC organized under the laws of New York). Id. at 4.
  • Without objection of Pasternak, and with its full knowledge, the inactive general partnership and the currently active LLC purchased from a then-affiliated company wines from the Pays d’Oc region of France and marketed and sold such wines within a “territory” as per the distribution agreement between plaintiff and Martin Sinkoff Wines, Inc. See id. at 5.
  •  The now-inactive general partnership reorganized its business into an LLC under the laws of New York, and Pasternak acceded to, and ratified, the reorganization, among other things such as continuing to do business with Pasternak LLC. Id.

The defendants raised several affirmative defenses, including ineffective service of process (on each defendant other than Pasternak LLC); defective summons; acquiescence, waiver, and estoppel; account stated and Pasternak LLC’s right to setoff; plaintiff’s repudiation and breach; plaintiff’s unclean hands; and failure to state a cognizable claims. Particularly noteworthy were the following:

  • Defendants raised the affirmative defense that plaintiff acquiesced in conduct originally complained of in its complaint by: (1) Signing a distribution agreement with the original general partnership, which did not prohibit the now-inactive company or its successor from issuing ownership interest, and with full knowledge that DBR owned 35% interest; (2) Acceding to and ratifying the reorganization of the prior general partnership and by continuing to do business with Pasternak LLC through actions like accepting and fulfilling purchase orders, invoicing the LLC, and accepting payment from the LLC; and (3) By allowing the GP and LLP to both purchase the Pays d’Oc wines and to market and sell such wines in the previously agreed upon territory. Id. at 11–14.
  • In or around August 2013, Pasternak LLC and VM agreed upon a statement of account liquidating amounts owed to and by VM. Id. at 14.

In its counterclaim, Pasternak named several additional counterclaim defendants, including but not limited to Vintage Epicure LLC (an LLC organized under the laws of New York, engaged in the sale of wines distributed by VM) and Beverage Group International, LLC (an LLC organized under the law of New York, engaged in the sale of wines distributed by VM). Pasternak counterclaimed on three main grounds: (1) Against VM for breach and repudiation of contract and implied covenant of good faith and fair dealing; (2) Against VM for for account stated and Pasternak’s right to setoff; and (3) Against additional counterclaim defendants for tortious interference with contractual and business relations. Id. at 26–29.

Val D'orbieuPasternak argues that, on or about February 12, 2013 (and during the term of its distribution agreement), and prior to any attempts by VM to address any perceived inadequacies of Pasternak’s representation with Pasternak, Beverage Group International, LLC filed a certificate of assumed name in the Office of the Clerk in the County of Rockland asserting the additional counterclaim defendant would be doing business under the name of, “Val d’Orbieu Americas, USA” and VM registered its “brands” to additional counterclaim defendant. Id. at 23–24. Previously, under the distribution agreement and according the Pasternak’s answer, the Val d’Orbieu wines were among the VM “brands” that were to be exclusively sold to Pasternak. As noted by Pasternak in its answer, Groupe Val d’Orbieu is the entity owning “all or a substantial” part of VM. Id. According to Pasternak, VM neither informed Pasternak nor sought consent from Pasternak in regard to the filing or registration of Val d’Orbieu. Additionally, Pasternak alleges that VM and Pasternak continued to operate under the distribution agreement, until Pasternak received a letter from VM in June 2013 purporting termination. Id. It is to the belief and knowledge of Pasternak that VM was urged by additional counterclaim defendants and/or their employees, members, or managers to register its brands with another entity, as well as to terminate the original distribution agreement. Id. at 24–26.

Pasternak requests a judgment dismissing VM’s claims and attorney’s fees, along with other relief as deemed just and proper. Id. at 28.

What is interesting about this particular case is how easily much of this information can be traced. For example, to confirm Pasternak’s allegations that Beverage Group International, LLC was importing Val d’Orbieu or Vignerons de la Méditerranée wines, for which Pasternak was to remain the exclusive importer, we can easily check the TTB public COLA database or even LabelVision. Using either of those sources, we can see that Beverage Group International, LLC filed several wine label applications on and after March 13, 2014 with the TTB using the DBA Val d’Orbieu Americas, USA. This also means that Beverage Group International, LLC needed to amend its TTB-issued federal basic importer’s permit to include the DBA. Generally, this entails filing an amendment with the TTB and, likely, this occurred well before March 13, 2014. Of course, some issues are still outstanding, such as whether the distribution agreement was still in effect, and these are matters that cannot be solved through a public portal. 

To view a copy of the original complaint, please see Vignerons de la Mediteranee vs. Pasternak and Domaines Barons de Rothschild (Index Number 50102/2015). To view a copy of the answer with counterclaims, see Affirmative Answer, Defense, and Counterclaims.

For more information on wine or alcohol law, direct shipping, licensing, or other legal matters please contact Lindsey Zahn.

Images property of VIBE Conference and Vitisphere, respectively.

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.



Are AUREA and FINCA AUREA Confusingly Similar for Wine?

Finca Aurea Wine Trademark TTABApplicant Roberto Oreste Antonio Busnelli sought to register the mark FINCA AUREA on the Principal Register in standard characters, with FINCA disclaimed in International Class Type 33.  See In re Roberto Oreste Antonio Busnelli, Serial No. 85830131 (February 20, 2015) [not precedential]. The application included a translation that indicated the the mark means, “GOLDEN VINEYARD” in English. Originally, the Trademark Examining Attorney refused the registration under Section 2(d) Trademark Act, 15 U.S.C. § 1052(d), asserting that Applicant’s mark, as applied to the goods in the application, resembled a registered standard character mark “AUREA” in International Class 33 for ““Grape wine; Red wine; White wine; Wine; Wines.” Id. at 2. The Attorney reasoned applicant’s mark was likely to cause confusion, to cause mistake, or to deceive with regard to the registered mark. Applicant appealed after the Attorney made the refusal final.

When the matter reached the Board, the Board first examined the similarity of the goods and the channels of trade (the second and third du Pont factors). In doing so, the Board established the following:

  • Applicant’s goods are identical to those of registrant;
  • The registrant’s goods move in all channels of trade characteristic for such goods and are available to all potential classes of ordinary customers; and
  • Since the wines outlined in the application and the cited registration were legally identical, there was a presumption that the channels of trade and classes of purchasers would be the same.

Id. at 3. Thus, with respect to the second and third du Pont factors, the Board found in favor of likelihood of confusion.

In its analysis, the Board turned the to remaining du Pont factors to determine if a likelihood of confusion existed based on the similarity or dissimilarity of the marks in their entireties with respect to appearance, sound, connotation, and commercial impression. Id. at 4. As noted by the Board in many prior opinions, the test never includes a side-by-side comparison of the marks, but instead examines whether the marks are “sufficiently similar” in their commercial impression to allow a person who encounters both marks to conclude there is a connection between the two parties. Further, the Board noted that its decision is made on the basis of the mark as a whole, not on the basis of specific dissections of the mark, but also explained that it would be rational to weigh some factors more than others provided the conclusion still rests on the mark as a whole. Id. 

The Board noted that the registered mark, “AUREA,” translates to “GOLDEN” in English. The Applicant’s mark, “FINCA AUREA,” translates to “GOLDEN VINEYARD” in English but discounted the term “FINCA.” It went on to reason that the Applicant’s mark begins with a term that somewhat distinguishes it from the registered mark, but the Applicant disclaimed the exclusive right to use the term “FINCA.” Id. at 5. Further, the Board noted that “FINCA,” which translates to “VINEYARD,” is highly descriptive in its association with wine and “[i]t is well-settled that disclaimed, descriptive matter may have less significance in likelihood of confusion determinations.” Id. at 5–6. Further:

  • Applicant’s mark incorporated registrant’s entire mark, which “heightened similarity” between the two marks; and
  • Even though Applicant produced arguments based on the file history of registrant’s mark, the Board reasoned that it was “well-established” it did not take judicial notice of records located in the Patent and Trade Office and each case must be decided on its own facts.

Id. at 6.

Alas, the Board found the Applicant’s mark similar to that of the registered mark and thus found in support of a likelihood to cause confusion.

Image property of Finca Aurea.

For more information on wine or alcohol law, labeling, or trademark, 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.


A Sight To See: Somerston Estate in Napa Valley

Somerston Estate Napa Valley

Last week I had the long overdue pleasure of spending some time in Napa Valley.  It was a short trip but a special one.  And well-timed too, with much of the North East covered in snow and slush.

Special thanks to Somerston Estate in St. Helena and brand Ambassador Ben Brenner for an amazing afternoon of ATV tours and tastings. With its majestic sloping hills, natural springs, olive trees, and roaming sheep, the property is as gorgeous as it is fruitful.  Its vineyards are located on an elevation between 850 and 2400 feet and feature a wide range of grapes, the most predominant being Cabernet Sauvignon and Sauvignon Blanc.  Their estate grown and bottled wines are fantastic, as are those of their co-brand, Priest Ranch.  I’ve ordered a few for friends and family already, any am looking forward to reviewing the shipment in On Reserve’s Wine Review series.

If you’re in the Napa area, I recommend a visit to Somerston for the tour as well as their Priest Ranch tasting room in Yountville. 

Here’s hoping I make it back out to Napa and Somerston Estate in the not too distant future. 



As reported by The Albany Times Union and Capitol Confidential, a bill was introduced this week to the New York State Assembly by Assemblyman Phil Steck that proposes to amend New York State’s alcohol beverage laws. See Bill Supports Empire Wine SalesBill Would Curb SLA’s Power Over Out-Of-State Wine Shipments. The bill will reportedly stop the NYSLA from revoking licenses of an in-state alcohol business if the business violated the law of another state. Id. It is alleged that the bill is a response to the Authority’s pursuit of Empire Wine, a Colonie-based retailer to whom the Authority issued a Notice of Pleading several months ago. In its Pleading, the agency alleged that Empire engaged in “improper conduct” by shipping wine directly to consumers in other states in violation of laws of several other states. For more information, see Retailer Empire Wine Sues New York State Liquor Authority: Direct Shipping. The ongoing situation between Empire and the NYSLA has attracted the attention of many industry professionals, and some have called into question the authority of the state agency with respect to regulating beyonds it borders. See, e.g., NY Liquor Regulators Slapped Down For Shady Enforcement Tactic.

This bill arrives just several weeks after an extremely strong letter written by State Director Michael P. Durant, on behalf of the National Federation of Independent Business, expressed concern of overregulation and pleaded with the agency to take a “sensible and fair approach to regulation of small retailers like Empire Wine & Spirits.” Mr. Durant specifically highlighted the relentless efforts of Governor Cuomo and his team to foster the growth of the state’s wine, beer, and spirits industry—especially with respect to smaller producers. In particular, Mr. Durant noted:

Overregulation and agency overreach threaten not only the wine and spirits industry but also many other industries across the state . . . . Small business owners in New York spend countless hours on compliance, including the administration and implementation of rules and regulations, which easily computes to billions of dollars in lost productivity annually. If agencies make it a regular practice to interpret and enforce vague laws, small business owners will face an even greater burden, and such course of action will threaten to dampen business growth in our state. NFIB is also concerned that discouraging internet sales conflicts with Governor Cuomo’s initiative to promote the wine, beer, and spirits industry in New York. The state recently has taken positive steps to promote growing facets of our economy and the modernize the Alcohol Beverage Control Law, which suggest a promising future for the industry.

See NFIB Letter Dated February 19, 2015

Late last year, Governor Cuomo signed the New York Craft Act into law. See Governor Cuomo Signs Craft New York Act, Promoting Craft Beverage Industry. A number of state beverage producers dedicated a significant amount of time to modernizing the state’s law, and most of the producers to whom I’ve spoken had positive reactions to the new law and are optimistic that the changes will have a strong impact on local industry. While the Craft Law focuses predominantly on small in-state producers, it sends a strong message that New York State is working to cut regulatory hurdles to foster growth of local businesses. It is quite possible that the alteration of New York’s ABC laws is just the beginning—i.e., it is certainly conceivable that additional provisions of the state’s alcohol beverage law affecting other tiers of industry may undergo changes in the future.

Assemblyman Steck’s bill is listed as bill number A05920 in the New York State Assembly and serves to “[l]imit the authority of the state liquor authority to penalize licensees based on perceived violations of the laws of other states, unless the conduct in question amounts to an independent violation of the alcoholic beverage control law or has resulted in a criminal conviction in another state.” Specifically, the bill adds language to the state’s current law that indicates the NYSLA does not have the power to revoke, cancel, or suspend any license or establish a civil penalty on a licensee based on conduct which the Authority deems to be in violation of another state’s law “unless such conduct independently violates a specific provision of this chapter, or unless due process of law has been provided by authorities of competent jurisdiction in such other state and the licensee or permittee has exhausted its due process rights and have been determined to have violated the laws of such other state.” While this may be good news for those in support Empire’s side, if this bill is signed into law, it will be rather interesting to see it in effect. Given the extreme and unprecedented reliance on the term “improper conduct,” future arguments may be even more inventive.

In its justification, the bill states the following:

It is concerning that the State Liquor Authority (SLA) is conducting enforcement activity on behalf of other states, when these states have not requested their enforcement or intervention, nor has the New York merchant been found to have violated the law of those states. The area of law the SLA is attempting to enforce is vague considering that 9 NYCRR 53.1 (n) does not specifically list out-of-state shipments as constituting “improper conduct”. While the SLA has used its authority under 9 NYCRR 53.1 (n) in the past to appropriately sanction licensees for “improper conduct” involving the committing of felonies or serious misdemeanors, the notable difference in this case being that the New York merchant has not violated any provision of the New York State Alcoholic Beverage Law, or any SLA rule or regulation, nor has it been found to have violated such other state’s law or regulation.

Emphasis added.

What is perhaps important to think about is why these laws have been drafted. Yes, the ABC laws of New York were written to prevent criminals and felons, who plagued the industry in or around the Prohibition era, from gaining industry interest or influence. This is true for many state laws, as well as for those of the federal government, and most of the laws are written with this concern in mind. It is certainly within the state’s interest to regulate the industry from undue influence, and from corruption and misconduct—but there is an extent. Is Empire’s conduct really apace with a felony or serious misdemeanor? From commentary I’ve read, many would zealously say “no.” Is the law in application functioning far beyond the intention or foresight of its drafters? Perhaps this is the point where the law needs to change.

For more information on New York State wine or alcohol law, direct shipping, or establishing a New York beverage business, 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.


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.


Wine Law Program University of ReimsIt is with great honor that I share the following: This summer, I will be teaching a course on U.S. Wine Law at the Wine & Law Program at the University of Reims. 

Four years ago, I had to absolute pleasure of attending the Program and exploring my burgeoning interest in this very intersection of wine and law. At the time, I was still a student in law school, but my passion and natural curiosity for wine law was eminent. I attended the program as an attempt to learn more not only about the topic, but to also probe at my own wonder. The Program was by far one of the highlights of my law school career because it helped animate topics and issues I had only read about in books or researched on Westlaw. Today, I am fortunate to practice wine, beer, spirits, and food law in my every day practice as a lawyer—and the Wine & Law Program certainly played an integral role in my decision to pursue this rather niche area of law.

This year, the Program is in its fifth session and will discuss topics related to wine law and wine marketing. The course will focus on questions like alcohol advertisement, health limits on the promotion of wine, ethics in wine marketing (prohibited wine names and trademarks) in the context of EU, U.S., and Australian law. The faculty includes Steven Charters, Vicki Waye, and Theodore Georgopoulos. Participants are mostly professionals but law (or wine-related discipline) students are also welcome.

Mr. Georgopoulos runs the Wine & Law Program at the University of Reims in the Champagne region of France. The Program includes the summer school session, hosted each year in English, as well as a one-year, full-time program, taught in French (DU vitivinicole et des spiritueux).

You can read more about my time at the 2011 Wine & Law Program in the article Life After Champagne: Synopsis of the 2011 Wine & Law Summer Program.

Photograph property of Lindsey A. Zahn.


This week, TTB issued a new guidance on the annual filing requirements for wineries. The guidance announced that, for wineries meeting certain requirements, excise tax returns and reporting requirements may be filed annually. Specifically, this refers to the Excise Tax Return (TTB Form 5000.24) and the Report on Wine Premises Operations (TTB Form 5120.7). The guidance provides, in more detail, how a winery can be eligible to file each return or report on an annual basis.

What types of wineries are eligible to file Excise Tax Return annually?

Some wineries are eligible to file the Excise Tax Return annually, as opposed to semi-monthly or quarterly (as required by 27 CFR 24.271), provided they meet the following requirements (from 27 CFR 24.273):

  • The winery’s proprietor has not given a bond for deferred payment of wine excise taxes and the proprietor:
    • Paid excise taxes in an amount less than $1,000 during the prior calendar year; OR
    • Is a proprietor of a newly established bonded winery and reasonably expects to pay less than $1,000 in wine excise taxes before the end of the calendar year.

More information on deferred payment of wine excise taxes can be found in TTB’s guidance here. Winery proprietors who meet the above eligibility requirements may file the Excise Tax Return (TTB Form 5000.24) and remittance within 30 days after the end of the calendar year.

What types of wineries are eligible to file Report on Wine Premises Operations annually?

Generally speaking, proprietors of wineries are required to file the Report of Wine Premises Operation either monthly, quarterly or annually. 27 CFR 24.300(g). To be eligible to file the Report annually, a proprietor must:

  • File the Excise Tax Return (TTB Form 5000.24) annually, as outlined above; AND
  • Not expect the total of all bulk and bottled wine to exceed 20,000 gallons for any one month during the calendar year.

As TTB summarized in its guidance, if a proprietor is not eligible to file the Excise Tax Return (TTB Form 5000.25) annually, then they are preempted from eligibility to file the Report on Wine Premises Operations (TTB Form 5120.7) annually. If a winery proprietor is eligible to file the Report annually, the Report is due on January 15th of every year following the year for which the Report summarizes.

For more information on wine or wine law, licensing, or winery reporting and excise taxes, 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.