On June 21, 2018 the U.S. Supreme Court ruled in Wayfair v. South Dakota that states may require online retailers to collect and remit sales taxes even if those retailers do not have a physical presence in that state. This ruling marks a victory for states, which can now tax remote sellers. Each state will now review its own laws and determine what steps to take to capture sales tax revenues on remote sales.
Wine Institute believes this change will have a limited impact on wineries making DTC shipments. Most states (including the plaintiff state South Dakota) are already collecting sales taxes on wines shipped to their consumers. Sales tax payment is a provision of most of the DTC shipping laws that have been implemented over the past 30 years, and wineries have already learned how to comply with such requirements.
Currently only a handful of states (Alaska, Colorado, Florida, Iowa, Minnesota, Missouri and the District of Columbia) don’t collect state sales taxes from licensed DTC wine shippers, although all of these states, except for Alaska, Minnesota and Washington, D.C., do collect excise taxes. States such as Massachusetts, Montana, New Hampshire, Oregon, Rhode Island and Wyoming currently impose no sales taxes on alcohol, so in those states only the excise taxes and/or state markups are required under their DTC statutes. Wine Institute is monitoring all states for any legal changes requiring out-of-state wineries to remit sales taxes and will keep members informed.
As a reminder, member wineries can use Wine Institute’s Tax Tool on the Members Only Website to look up all excise and sales tax requirements for any address in the United States, which will be updated to reflect any changes resulting from the Court’s ruling. Contact the State Relations Department at 415/356-7530 or firstname.lastname@example.org with any questions.