Indiana Eases DTC Restrictions
Indiana just became a more attractive destination for DTC wine shipments with the passage of Senate Bill 113, easing some of the more onerous restrictions required of licensed wineries shipping to Indiana residents. Most importantly the new law removes the “face-to-face” rule, which required “the consumer to provide the seller one (1) initial face-to-face transaction at the seller’s place of business” before the winery could ship to the consumer under the permit. This was for the purpose of verifying the consumer’s age and identity but had the practical effect of making any online or telephone order impossible for any Indiana resident who hadn’t actually visited the winery. Age and identity verification are still required, but an in-person appearance is no longer necessary to satisfy that requirement.
While less significant, the new law also eliminates the need for a surety bond to ensure the payment of taxes, certainly an administrative hassle. Finally, the new law restructures the fee schedule for obtaining the permit. Previously, the fee was a flat $100, regardless of the winery’s size. While not to the benefit of larger wineries, the new fee structure is graduated and offers the ancillary benefit of raising the volume cap of cases permissible to be shipped direct into the state from 3,000 to 5,000. The new structure is based upon the anticipated or demonstrated volume of wine shipped to consumers in the previous year as follows:
< 9,000 liters = $100
< 18,000 liters = $200
< 27,000 liters = $300
< 36,000 liters = $400
< 45,000 liters = $500
While not perfect, the amendments to the direct shipping law are a welcome easing of what was previously one of the more restrictive DTC laws on the books. It now only contains one major impediment as the lawmakers apparently decided to leave the rule preventing direct shipper permit holders from having a distributor relationship within 120 days prior to obtaining the permit or during the time they hold the permit. It’s unfortunate they don’t believe the two can go hand-in-hand but that will be a battle for another day. The new law takes effect on July 1, 2015.