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Business Taxes Law Guide—Revision 2024
Alcoholic Beverage Tax Law
Business and Professions Code Provisions Relating To the Alcoholic Beverage Tax Law1
Division 9. Alcoholic Beverages
Chapter 4. Imports2
Section 23661.3
23661.3. Wine direct shipper permit. (a) Notwithstanding any law, rule, or regulation to the contrary, any person currently licensed in this state or any other state as a winegrower who obtains a wine direct shipper permit pursuant to this section may sell and ship wine directly to a resident of California, who is at least 21 years of age, for the resident's personal use and not for resale.
Before sending any shipment to a resident of California, the wine direct shipper permitholder must:
(1) File an application with the department.
(2) Pay the application fee as specified in subdivision (a) of Section 23320 if the winegrower is not currently licensed by the department.
(3) Provide the department its California alcoholic beverage license number or a true copy of its current alcoholic beverage license issued by another state.
(4) Obtain from the department a wine direct shipper permit.
(5) Obtain a seller's permit or register with the State Board of Equalization pursuant to Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code.
(6) Register with the Department of Resources Recycling and Recovery as a beverage manufacturer and distributor, as those terms are defined in the California Beverage Container Recycling and Litter Reduction Act (Division 12.1 (commencing with Section 14500) of the Public Resources Code).
(b) A wine direct shipper permit authorizes the permitholder to do all of the following:
(1) Sell and ship wine to any person 21 years of age or older for their personal use and not for resale.
(2) Ship wine directly to a resident in this state only in containers that are conspicuously labeled with the words: "CONTAINS ALCOHOL: SIGNATURE OF PERSON AGE 21 YEARS OR OLDER REQUIRED FOR DELIVERY."
(3) Ship wine only if the permitholder requires the carrier to obtain the signature of any individual 21 years of age or older before delivering any wine shipped to an individual in this state.
(4) If the permitholder is located outside of this state, report to the department no later than January 31 of each year, the total amount of wine shipped into the state during the preceding calendar year under the wine direct shipper permit.
(5) If the permitholder is located outside of this state, pay to the State Board of Equalization all sales and use taxes, and excise taxes on sales to residents of California under the wine direct shipper permit. For excise tax purposes, all wine sold pursuant to a direct shipper permit shall be deemed to be wine sold in this state.
(6) If located within this state, provide the department any necessary additional information not currently provided to ensure compliance with this section.
(7) Permit the department or the State Board of Equalization to perform an audit of the wine direct shipper permitholder's records upon request.
(8) Be deemed to have consented to the jurisdiction of the department or any other state agency and the California courts concerning enforcement of this section any related laws, rules, or regulations.
(c) A wine direct shipper permitholder shall comply with the California Beverage Container Recycling and Litter Reduction Act (Division 12.1 (commencing with Section 14500) of the Public Resources Code), including, but not limited to, the reporting and payment provisions applicable to the permitholder as a beverage manufacturer and distributor. If the permitholder fails to comply with Section 14560 or 14575 of the Public Resources Code, the department may suspend or revoke the wine direct shipper permit in the manner provided for in this section.
(d) A wine direct shipper permitholder located outside of the state may annually renew its permit with the department by paying an annual fee as specified in subdivision (b), and adjusted pursuant to subdivisions (d) and (e) of Section 23320 and providing the department with a true copy of its current alcoholic beverage license issued by another state. A wine direct shipper permitholder located in California shall renew its wine direct shipper permit in conjunction with its master license. For purposes of this section, "master license" means a winegrower's license issued by the department.
(e) The department, the State Board of Equalization, and the Department of Resources Recycling and Recovery may promulgate rules and regulations to effectuate the purposes of this law.
(f) The department may enforce the requirements of this section by administrative proceedings to suspend or revoke the wine direct shipper permit, and the department may accept payment of an offer in compromise in lieu of suspension as provided by this division. Any hearing held pursuant to Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code against a permitholder outside of California shall be held in Sacramento.
(g) Sales and shipments of wine direct to consumers in California from winegrowers who do not possess a current wine direct shipper permit from the department are prohibited. Any person who knowingly makes, participates in, transports, imports, or receives such a shipment is guilty of a misdemeanor pursuant to Section 25617.
History—Added by Stats. 2005, ch. 157 (SB 118), effective January 1, 2006. Amended by Stats. 2019, ch. 29 (SB 82), effective June 27, 2019, substituted "the application fee as specified in subdivision (a) of Section 23320" for "a ten dollar ($10) annual registration fee" before "Pay" in subdivision (a)(2); substituted "their" for "his or her" after "of age or older for" in subdivision (b)(1); relettered former subdivisions (d)-(g) as (c)-(f); and substituted "an annual fee as specified in subdivision (b), and adjusted …of Section 23320" for "a ten dollar ($10) renewal registration fee" before "department by paying" in the first sentence of subdivision (c). Amended by Stats. 2022, ch. 610 (SB 1013), effective January 1, 2023, added paragraph (6) to subdivision (a); added subdivision (c); relettered former subdivisions (c) – (f) as subdivisions (d) – (g); and substituted "The department, the State Board of Equalization, and the Department of Resources Recycling and Recovery" for "The department and the State Board of Equalization" before "may promulgate rules and regulations" in subdivision (e).
States may regulate direct shipment of wine as long as it does not discriminate.—U.S. Supreme Court held that New York and Michigan wine direct shipping statutes were unconstitutional because they discriminated against out-of-state winegrowers and interstate commerce, but states could regulate direct shipment of wine, such as by requiring the out-of-state shipper to obtain a permit, as long as such regulation does not discriminate in favor of in-state wine producers and against out-of-state wine producers. Granholm v. Heald (2005) 125 S.Ct. 1885.
1 See Section 32002 of Revenue and Taxation Code in this volume.
2 The provisions of Chapter 4 of the Business and Professions Code were added to the Business Taxes Law Guide in 2006. Any changes to these provisions prior to 2006 will not be reflected in the history notes.