Earlier this year the Chicago City Council approved Mayor Lightfoot’s proposal to extend the city liquor tax to include remote and online sales shipped into Chicago. Prior to this change, the city liquor tax only applied to sales physically occurring in Chicago. Under the amended ordinance, any winery that ships direct-to-consumer (DTC) sales to a Chicago address on or after July 1, 2020 is required to register with the City of Chicago for a new tax account and collect and remit the city liquor tax directly to the city. The city liquor tax rate is $0.36 per gallon on wine containing 14% or less and $0.89 per gallon on wine containing more than 14% and less than 20% alcohol by volume.
Wine Institute has recently received clarification from city tax authorities on the registration and reporting process for member wineries that are shipping into Chicago. A winery should apply to the City of Chicago Finance Department for a new tax account only after making its first sale to consumer in Chicago. City liquor tax returns and payment must be submitted through the Chicago Business Direct portal monthly; however, a return is not required for months in which no sales or shipments occurred. A winery is not required to register with the city or file returns prior to making a sale to a Chicago consumer. Note a Winery Shipper’s Licensee that has received approval from the ILCC for a self-distribution exemption must also collect the city liquor tax on sales to retail accounts in Chicago.
An Illinois DTC Winery Shipper’s License and registration with the Illinois Department of Revenue to remit sales and excise taxes are requirements for shipping wine to Illinois consumers.