Montana Enacts Workable Direct Shipping Law

Montana is replacing its flawed connoisseurs license with a permit law. HB 402, effective October 1, 2013, permits any out-of-state winery “registered” in Montana to obtain a Direct Shipment Endorsement to sell and ship up to 18 nine-liter cases of wine annually to an individual in Montana who is at least 21 years of age. If a winery is currently selling wine through a wholesaler in Montana, the winery is already registered and will only need to obtain a Direct Shipment Endorsement for an annual fee of $50. A winery not currently registered will need to register and obtain the Endorsement. There is a tiered registration fee from $0 to $400 depending on the number of cases sold in Montana. There is no charge for 0 to 60 cases; $400 is charged for over 2,000 cases. Registration requires label approval for no fee. Wine Institute will work with the Department on rules to implement the law to create a streamlined process, combining the Registration and the Endorsement applications. Also, HB 402 for the first time allows Montana wineries to ship to Montana consumers.

In addition, when applying for the Direct Shipment Endorsement, a winery must submit to the Department a written statement acknowledging that the winery will contract only with common carriers that agree that any delivery of wine will be made only to an individual in Montana who is at least 21 years for age and who signs upon receipt of the wine. As with most permit laws, cases must be labeled, excise tax must be paid and reports filed. If a winery with a Direct Shipment Endorsement uses a bonded wine warehouse for fulfillment purposes, the winery must provide written notice to the Department of the name and address of the bonded wine warehouse. Wineries will be restricted from shipping to dry Indian Reservations.