Law Offices of John P Connell, P.C.: In January 2015, Massachusetts will become the most recent State to allow direct shipment of wines to consumers with the recent passage of the 2015 Massachusetts Budget. Section 61B of the 2015 Budget includes the new direct shipping provision which will be codified in Massachusetts General Laws, Chapter 138, § 19F. The new law will state that a new Direct Shipper’s Permit may be issued to wineries by the Massachusetts Alcoholic Beverages Control Commission (“ABCC”) where the winery holds a federal basic permit as well as a license “in the commonwealth or any other state to manufacture and export wine; and is in the business of manufacturing, bottling or rectifying wine.” The language of the new law requiring a winery be licensed to manufacture wine in the Commonwealth of Massachusetts “or any other state,” however, will exclude wineries from outside of the United States from acquiring the new Direct Shipper’s License.

While there does already exist a Direct Shipper’s license in Massachusetts, applicants for such licenses were restricted to those wineries that did not already have a wholesaler in Massachusetts and which did not produce more than 30,000 gallons of wine a year, which limited the number of prospective wineries from acquiring the Direct Shipper’s license. With the new law, all domestic wineries may now apply for the new Direct Shipper’s license without restrictions as to the amount of wine they produce and whether or not they already ship into Massachusetts via an established wholesaler. The new law will have the following points to be aware of:

–       The initial licensing fee will be $300.00 to be submitted with the ABCC application with a $150.00 annual renewal fee;

–       The winery using a common carrier must obtain the signature from someone of legal drinking age who receives the shipment;

–       The wineries must report shipments it makes into Massachusetts each year to the ABCC and it must pay corresponding excises taxes on such shipments;

–       Deliveries into Massachusetts are limited to 12 cases per year (no more than 9 liters per case) for each customer;

–       The wine delivered into Massachusetts is only for personal consumption and cannot be resold;

–       A Direct Shipper’s violation of the regulations it will be responsible for compliance with will lead to stiff progressive fines.

More legal and procedural issues are expected to arise as Massachusetts adopts the new Direct Shipper’s license in practice, such as whether wineries will be required to register with the Massachusetts Secretary of the Commonwealth as conducting business in Massachusetts and whether the many prohibitions currently contained in G.L. c. 138 as to the backgrounds of individuals owning the winery (such as cross ownership in other licensed business; criminal backgrounds; and U.S. citizenship) will prohibit some prospective wineries from acquiring the new license based upon the background of its owners, so stay tuned.

Submitted by Gregory Birney

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