In The News

Direct Shipment of Wine Takes Off

Shipment of wine into Tennessee was illegal until the 2009 legislature authorized a new direct shipment license.   Many industry observers thought that the direct shipment was a token to placate oenophiles, but result in few sales.  Surprisingly, nearly 400 out of state wineries have paid the $300 application fee and $150 yearly license fee, plus registering to pay Tennessee taxes.

This year, the legislature legalized direct shipment to the entire state, including dry areas where wine cannot be purchased at package stores.  Wineries no longer have to worry about determining which areas of Tennessee are approved for direct-to-consumer shipping.

Direct shipment was opposed by wholesalers and retail liquor stores, which saw direct shipment as new competition and potentially a method to avoid payment of Tennessee taxes.  Opposition to direct shipment touted the dangers of sales to minors, among other concerns that have apparently not materialized.  Direct shipment of wine was quite controversial at a national level during the 2000’s, but most states have legalized some form of direct shipment and only a handful still have an absolute prohibition.

Tennessee taxes wine at $1.21 per gallon, plus applicable sales taxes.  Despite only being able to ship one case of wine to any individual during a calendar month and an annual limit of 3 cases, the license has proven to be popular.

According to shipcompliantblog.com, “Approximately 35% of wineries that ship wine direct are licensed to ship into Tennessee. The increased market access [to dry areas in Tennessee] is likely to encourage additional wineries to add Tennessee to their direct shipping programs, meaning more consumer choice and increased state revenue.”