Proposed Regulations Offer Guidance on IL Shipping Charges, May Help Resolve False Claims Act Legal Cases

SAN FRANCISCO — The Illinois Department of Revenue (DOR) has just issued proposed regulations to clarify its position on the issue of charging sales taxes on shipping charges on direct-to-consumer wine shipments into that state. Wine Institute and several member wineries recently filed a lawsuit to fight the spate of false claims act lawsuits targeting wineries initiated by a private practice attorney in the state. We believe these proposed rules will help to clarify who should and should not pay taxes on such charges, and will potentially lead to the dismissal of many of the lawsuits filed against wineries.

In the proposed regulations issued on August 28, 2015, IL DOR has clarified that under specific circumstances, wineries that offer the option to purchasers to pick up the wine at the winery/tasting room may be exempt from charging taxes on shipping. Attorneys at Reed Smith LLP, handling Wine Institute’s suit, have prepared a summary of the issue which provides more details on the DOR proposal and its impact on wineries. The attorneys believe that wineries meeting the criteria outlined in this document can ship into Illinois without having to collect sales taxes on shipping charges. We anticipate that IL DOR will issue final regulations later this fall.

Wineries currently involved in litigation should contact their attorneys to determine how the proposed regulations may impact their particular cases. Pertinent information appears in Section 130.415 (b) Transportation and Delivery Charges. For further information, contact Steve Gross at

Wine Institute is the public policy advocacy association representing nearly 1,000 California wineries and affiliated businesses that initiate and advocate state, federal and international public policy that enhances the environment to responsibly produce, promote and enjoy wine.