South Dakota Direct-to-Consumer License Application Available

The South Dakota direct-to-consumer license application is now available. Under the provisions of the new shipping law (HB 1001), that go into effect Jan. 1, 2016, a winery with a Direct Wine Shipper license may ship up to 12 cases of wine produced under their federal basic permit to any adult consumer in South Dakota during a calendar year. In addition to obtaining a license, direct shippers must pay an annual license fee of $100, submit a copy of their federal basic permit and register to pay sales and use taxes. A winery can apply for a South Dakota sales and use tax license as well as the Direct Shipper license on the South Dakota Tax Application website.  The application is only available online and must be filed electronically. Applicants for a direct wine shipper license should simultaneously register for an EPath account. EPath accounts are used to print license cards, submit required returns and renew licenses.

Labels that are not already registered and consigned to a South Dakota wholesaler must be registered with the Department of Revenue prior to being shipped to SD consumers. Wineries can register labels by printing out and mailing in the Label Registration Application — or online using the PRO system. The registration fee for each initial brand label is $25 and $17.50 to register additional brand labels of the same class of wine. There is an additional “express” fee applied to each label that is registered electronically. Product registrations must be renewed each calendar year. The new law also prohibits direct shippers from selling products below the manufacturers’ cost.

Prior to shipping wine, the direct-to-consumer licensee must verify the age of the person placing the order by obtaining a copy of the person’s government issued photo ID or by using an online age verification service. At the time of the sale, the direct shipper must record the name, address, date of birth and telephone number of the person placing the order on an order form or other verifiable record. Additionally, direct shippers must remit sales and excise taxes and file quarterly shipment reports with the Department on or before the 15th day of the month following each quarterly period.

Once the new law goes into effect Jan. 1, 2016, the federal on-site provision will no longer apply to consumers in South Dakota, and wineries that do not hold a Wine Shipper license will be prohibited from making on-site or off-site shipments to South Dakota consumers under any circumstances.