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Wine & Vineyard Law:
Federal and New York State
Licenses, Permits & Regulations
National Business Institute (“NBI”)
November 10, 2015
By Cari B. Rincker, Esq.
My Background
• Grew up on a beef cattle
farm in Central Illinois
• Education
– A.S. in Agriculture from
Lake Land College
– B.S. in Animal Science from
Texas A & M
– M.S. in Ruminant (Beef
Cattle) Nutrition from
University of Illinois
– J.D. from Pace Law School
(2007)
My Background
• Chair of the American Bar
Association, General
Practice, Solo & Small Firm
Division’s Agriculture Law
Committee
• My food and agriculture
client base
– Farmers to ranchers
– Small to mid-size agri-
business
– Food entrepreneurs
And I Also Love Wine
Overview
The Players
Types of Wineries
Licenses, Permits & Other Paperwork
Where Wine Can Be Sold
Excise Tax
Wine Labeling
Wine Trade
Record Keeping
Misc. Issues
The Players
The Players
• Permit
• Labeling and
advertising
• Fair trade practices
Federal
Alcohol
Administration
Act (“FAAA”)
• Qualification of
premises
• Production
• Payment of taxes
Internal
Revenue Code
(“IRC”)
The Players: Federal Level
Alcohol and Tobacco Tax
and Trade Bureau (“TTB”)
• Administers laws imposed by laws
set by FAAA and IRC concerning:
• Alcohol production and
distribution
• Wholesale businesses
• Alcohol advertising and labeling
• Not responsible for retail sale of
alcohol or alcohol abuse programs
The Players: New York State Level
• Alcoholic Beverage Act
(“ABC”)
– Governs licenses and
regulations within New York
State
• New York State Liquor
Authority
• New York Licensing Bureaus
– Located in New York City,
Albany, & Buffalo
– Receives, examines, &
investigates license and permit
applications
Types of Wineries
Types of Wineries
• Typical commercial
winery that produces and
stores its own wine
• Responsible for keeping
own records, reports,
wine labeling, and paying
taxes
• Requires establishing a
premises, obtaining a
bond, and receiving
permission from TTB
“Stand
Alone”
Bonded
Winery
Types of Wineries
• Two or more
wineries share use
of a bonded
winery’s facility
• Bonded winery is
host & only one
required to obtain a
bond
• Other wineries must
qualify on their own
as a winery
Alternating
Proprietor
Types of Wineries
• Makes wine that is
ordered by
customers, who then
resell it
• Producer must qualify
as a fully bonded
winery
• Crushes grapes,
ferments, & bottles
• Client is a wholesaler
who provides grapes
for crushing
Custom
Crush
Types of Wineries
• Solely
responsible for
storing, blending,
and bottling of
wine
• No fermentation
takes place
• Requires bond
similar to bonded
winery
Bonded
Wine
Cellar
Licenses, Permits & Other Paperwork
Licenses, Permits & Other Paperwork
Being in the wine
business is considered
a privilege by the
government and this
privilege can be
revoked.
• For this reason, it is highly
regulated at the both the
state and federal level.
Licenses, Permits & Other Paperwork
TTB must approve
all applications for
wineries before
business operations
can begin.
• Keep in mind the type of
operation (e.g., bonded
winery, alternating
proprietorship)
New York has a
Tied House Law
where a licensed
wine retailer
cannot also be a
manufacturer or
wholesaler of
alcohol (or vice
versa)
Licenses, Permits & Other Paperwork
• There is no fee at the federal level to
apply for or maintain approval to operate
TTB-regulated alcohol and tobacco
businesses.
• Applications are reviewed by the TTB
Wine Applications Unit Specialist
• In some cases, it is referred to the TTB
Trade Investigations Division (“TID”)
Field Office for on-site inspection
Required TBB
Documentation
Licenses, Permits & Other Paperwork
• For operation of bonded
winery, wine cellar, or
wine bottling house
• Form must be sent in
duplicate to Director of
TBB, National Revenue
Center, Alcohol and
Tobacco Tax and Trade
Bureau
• No cost associated with
application
Application
to Establish
& Operate
Wine
Premises
Licenses, Permits & Other Paperwork
• Necessary to engage
in business of
producing or
processing wine, or
importing or
wholesale of alcohol
• Application must be
sent in duplicate to
TBB and Alcohol and
Tobacco Tax and
Trade Bureau
Basic
Permit
In New York, an Alcohol Permit
must be obtained ($38)
Licenses, Permits & Other Paperwork
Personnel Questionnaire
for TBB
• The business name and contact
information
• Personal and contact information
for all business owners, officers,
directors, members, partners, etc.
• Questions regarding each
individual’s arrest, criminal and
business background history
• Bank references’ and personal
references’ contact information
Licenses, Permits & Other Paperwork
Wine Bond
• Worksheet from TTB used to
determine appropriate amount
of bond required for specific
establishments
• Required for every operation that
produces or stores untaxed wine
• Also need to include
• Personal contact information
for the obligor or all partners if
it is a partnership
• Bond coverage and category
Licenses, Permits & Other Paperwork
• This form is filled out with
the TBB to determine the
winery’s impact on the
environment in terms of
waste and pollution
• Application requires
descriptions of:
• Heat and power to be
used and its purpose
• Air pollution control
equipment proposed
• Types of wastes, amount
of those wastes, &
methods of disposal
Environmental
Information
Licenses, Permits & Other Paperwork
Supplemental Information
on Water Quality
Consideration
• This form is to determine if a
certificate or waiver by the State
Water Quality Agency is required
• Sent to the TBB and the National
Revenue Center
Licenses, Permits & Other Paperwork
Power of Attorney
• This is a signing
authority for Corporate
and LLC officials
• Allows winery to have
their appointed
attorney represent the
principal with the TTB
Licenses, Permits & Other Paperwork
• Required before any
business activity can
take place
• Requires information
regarding:
• Type of dealer
• Subclass
• Business
information
Special Tax
Registration
Licenses, Permits & Other Paperwork
Required in some
cases
• Alternating Proprietor
Agreement or Contract
• Lease agreement
• Organizational
documents for LLC,
Corp, or LP
Corporate Formality Paperwork For TBB
Type of Entity Documents Requested
Corporations or
limited liability
companies
(a) Charter or certificate of existence, incorporation, or organization.
(b) Names and addresses of officers, directors, members and
managers.
(c) Certified extracts of minutes authorizing certain individuals to
sign.
(d) Statement showing the number of shares/ownership of each class
of stock/interest authorized and outstanding, and the voting rights
of the respective owners or holders.
(e) Statement of interest: Names and addresses of the 10 persons
having the largest ownership or other interest and nature and
amount of the stockholding or other interest of each, whether the
interest appears in the name of the interested party or in the name
of another party. The Director, National Revenue Center may
request the names of interested persons if the applicant
corporation or LLC is wholly owned or controlled by another
corporation or LLC.
Corporate Formality Paperwork For TBB
Type of Entity Documents Requested
Partnerships (a) True copies of articles or partnership agreement, if any, and of the
certificate of partnership where required to be filed by local
authority.
(b) Description of the wine premises.
(c) Whether, if the application is not for a bonded wine premises
where production of wine will take place, the applicant agrees to
having his or her name listed in a TTB publication to be distributed
to the public.
(d) Any trade names.
(e) Any basic permits and bonds (include the present one).
(f) If the applicant is a volatile fruit-flavored concentrate operation,
he or she must follow additional instructions found at the end of
the form.
(g) If there are any other operations occurring on the wine premises,
these must be disclosed.
Licenses, Permits & Other Paperwork
Suggested documents for TBB
• Trade name registrations
• Diagram of bonded wine premises
New York Paperwork
Requirements
•Requirements for individuals
•Over 21 and
•US Citizen, permanent resident, or citizen of
country who is able to obtain visa to enter US to
engage in trade
•Requirements for LLC or Corp
•Officer must be over 21 and
•US Citizen, permanent resident, or citizen of
country who is able to obtain visa to enter US to
engage in trade
Person who is convicted felon, a police
officer, or whose license to sell alcoholic
beverages was suspended within last 2
years cannot obtain license
New York Paperwork
• Two categories of
licenses under ABC:
– Retail
• On premises – Customer
drinks wine at retailer’s
location
• Off premises – Store
where wine is sold
• Both types are required
to have $1,000.00 bond at
all times
– Wholesaler/
manufacturer
New York Paperwork
• Farm License
Winery
– Farm grows fruit on
premises where
wine is produced
– Can be sold to
dealers, distributors,
and individuals who
visit the farm
New York Paperwork
Wine Tasting Licenses
• Anyone licensed to sell wine is permitted to
conduct wine tastings on their premises
• Winery can conduct tastings of NY labeled
wine at establishments that have licenses
to sell wine at retail for on-site
consumption
• Tasting must occur under supervision of
winery owner, wholesaler, importer, or
agent
• Farm wineries can also conduct tastings at
the New York State Fair, county fairs, and
farmers markets
Where Wine Can Be Sold
Where Wine Can Be Sold
License Class Description
Wine Product A "wine product" is defined as a beverage containing wine with added
juice, flavoring, water, citric acid, sugar and carbon dioxide, not
containing more than six percent alcohol by volume (typically referred
to as "wine coolers").
Restaurant Wine License for on-premises consumption of wine and beer in a place
where food is prepared in such quantities that the sale of wine and
beer is not the prime source of revenue.
Hotel Wine Allows on-premises sale of wine and beer in both a restaurant in the
hotel as well as room service.
Club Wine Does NOT mean "nightclub" or "private bar" designed to restrict
admission to a specific group of persons, or class of people. See "Club
Beer" for definition of "Club." Allows for on-premises sale of wine or
beer for club members and guests. The club must appoint an ABC
officer.
Where Wine Can Be Sold
License Class Description
Tavern Wine Allows sale for on-premises consumption of wine and beer.
Liquor Store For the sale of liquor and wine (no beer) for consumption off the
premises. The only additional items allowed to be sold, such as ice
and corkscrews, are listed in the ABC Law. Only one license is
allowed per person (corporation, partnership, etc.).
Wine Store Not to be confused with the Retail Wine Outlet for a Farm Winery.
License to sell WINE ONLY (not liquor or beer) for off-premises
consumption, under the same basic conditions as a Liquor Store.
Excise Tax
Excise Tax
• Tax paid on purchases made on a specific
good, such as wine
• Tax increases as alcohol level increases
Amount of Alcohol Excise Tax
If ½ of 1% to less than 14% alcohol $1.07
If more than 14% but less than 21% alcohol $1.57
If more than 21% but less than 24% alcohol $3.15
Artificially carbonated $3.30
Sparkling $3.40
Excise Tax
• Up to $0.90 per gallon on
part of the small domestic
producer’s annual taxable
removals, other than
sparkling wine
• Theory is to make tax rates
for small wineries to what
they were before 1991
when tax on wine was
increased to $0.90 per
gallon
Credit for
small
domestic
producers
Wine Labeling
Wine Labeling
TTB Pre-Approval
Components of a Wine Label
Standards of Identity
Varietal Labeling
Type Designations
Geography & Winemaking
Organic Labeling
Wine Labeling
• TBB Preapproval
– Wine labels must be pre-approved by TTB if
entering into interstate commerce.
• To comply with the TTB, the party responsible for
bottling the wine must obtain a Certificate of Label
Approval (“COLA”) from the TTB after the approval.
• However, if the label is made strictly for sample usage,
it does not need a COLA.
– The turn-around time for currently processing a
label application is 23 days for wines.
Wine Labeling:
Components of a Wine Label
Wine Labeling:
Components of a Wine Label
• Vintage Date
– When the grapes
were harvested
– #1 shows the
Vintage Date
– If shown 95% of
grapes must have
been harvested
by that year
Wine Labeling:
Components of a Wine Label
• Estate Bottled
– This means that 100%
of the grapes used in
the wine came from
land by that winery
(“estate”).
Wine Labeling:
Components of a Wine Label
• Appellation of Origin or
Wine Region
– This is included on a label if
75% of the grapes used to
make the wine were grown
in whatever location is
named.
– Appellation of Origin
provides the geographic
origin of where the grapes
were grown.
Wine Labeling:
Components of a Wine Label
• Varietal
Designation
– This is the grape
variety that is used
to make the wine
– This isn’t required
– could just say
“red wine” “white
wine” “rose wine”
Wine Labeling:
Components of a Wine Label
• County-of-Origin (“COOL”
or “mCOOL”)
– Although this might change
due to WTO issues, COOL is
still the law in the U.S. (as of
October 25, 2015)
– This is required by the U.S.
Customs and Border
Protection for containers of
imported wine.
Wine Labeling:
Components of a Wine Label
• Name of Winery or
Brand Name
– #2 on this Label
– Must not mislead the
consumer about the
age, identity, origin or
other character of the
wine
Wine Labeling:
Components of a Wine Label
• Alcohol content
– Must include
percent by volume
of alcohol
– Can be labeled
“table wine” or
“red wine” if
content between
7% and 14%
– Dessert wine if
over 14%
Wine labeling:
Components of a Wine Label
• Declaration of
Sulfites
– If there is 10 or more
parts per million of
sulfur dioxide, this
must be indicated if
the wine is intended
for interstate
commerce
– #7 on this label
Wine Labeling:
Components of a Wine Label
• Name and address
of Bottler or
Importer
– Must appear on
bottle/container
– Can be operating
name of winery or
trade name
– #4 on this label
Wine Labeling:
Components of a Wine Label
• Net contents
– Must be
indicated in
metric units
– #5 on this label
Wine Labeling:
Components of a Wine Label
• Health Statement
– 2 required statements:
• “According to the
surgeon general,
women should not
drink alcoholic
beverages during
pregnancy because of
the risk of birth
defects”
• “Consumption of
alcoholic beverages
impairs your ability to
drive a car or operate
machinery, and may
cause health
problems.”
– #7 on this label
Wine Labeling:
Standards of Identity With Wine
Wine Labeling:
Standards of Identity of Wines
Divided into 9 classes
to describe taste,
production, method &
composition of waste
Wine Labeling:
Standards of Identity of Wines
• Grape wine
– This includes table and
dessert wine as well and
refers to wine produced
by the normal alcoholic
fermentation of grapes.
Wine Labeling:
Standards of Identity of Wines
• Sparkling Wine
– Includes sparkling wine
and champagne
– Sparkling wine is grape
wine made “sparkling”
with carbon dioxide that
results directly from the
fermentation of the wine
within a closed container.
Wine Labeling:
Standards of Identity of Wines
• Carbonated Grape Wine
– This is made effervescent
by carbon dioxide other
than that resulting from the
second fermentation of the
wine in a closed container.
Wine Labeling:
Standards of Identity of Wines
• Citrus Wine
– This is similar to grape
wine, but uses different
fruits.
• Fruit Wine
– This is similar to grape and
citrus wines, but using
other fruits, such as berries.
Wine Labeling:
Standards of Identity of Wines
• Wine from other
agricultural products
– Uses other agricultural
products besides fruit
– Ex: raisin wine and sake
(rice wine)
Wine Labeling:
Standards of Identity of Wines
• Aperitif Wine
– An example of this is
Vermouth; it is a wine
with an alcohol content
more than 15% and is
grape wine with added
brandy or other alcohol,
and flavoring.
Wine Labeling:
Standards of Identity of Wines
• Imitation
– Wine containing any
synthetic materials
(such as wine made
from mixing water with
residue that remains
after pressing grapes)
and must state
“imitation” wine on the
bottle.
Wine Labeling:
Standards of Identity of Wines
• Substandard
– “Substandard” wine
must be listed as well if
it is substandard wine
(which is too acidic to
meet the standard of
other wine).
Wine Labeling:
Standards of Identity of Wines
• Retsina Wine
– This is grape wine with
(tree) resin added,
usually pine resin.
– This wine is popular in
Greece
Wine Labeling: Varietal Labeling
Wine Labeling:
Varietal Labeling
Display of single type of grape
used in that wine
Can be used rather than stating
a class
Variety grape name must be
approved by TTB
Origin of grape must appear on
label if using varietal labeling
Wine Labeling:
Type Designations of Varietal Significance
Type Designation Description
Muscadine This is an American wine that derives at least 75% of its volume from
Muscadinia rotundifolia grapes.
Muscatel This is an American wine that derives its predominant taste, aroma,
characteristics and at least 75 percent of its volume from any Muscat
grape source.
Muscat or Moscato This is American wine that derives at least 75% of its volume from any
Muscat grape source. Moscato is the Italian name for Muscat.
Scuppernong This is an American wine which derives at least 75% of its volume from
bronze Muscadinia rotundifolia grapes. Large variety of Muscadine.
Gamay Beaujolais An American wine which derives at least 75% of its volume from Pinot
noir grapes, Valdiguié grapes, or a combination of both.
27 CFR § 4.25
Wine Labeling: Geography
Wine Labeling:
Geography & Winemaking
Generic
e.g., Sake,
Vermouth
Semi-
generic
e.g., New
York Chablis,
Napa Valley
Burgundy
Non-
generic
Non-generic wines
which are not
distinctive
designations of
specific grape wines
include American,
California, Lake Erie,
Napa Valley, New
York State, French,
and Spanish
Wines can be known by region from
which they come from and fit into
3 categories
Wine Labeling: “Organic”
Wine Labeling:
Organic Labeling
• Organic wine is overseen
by USDA’s Agriculture
Marketing Service’s
(“AMS”) National
Organic Program
(“NOP”) & TBB
• NOP regulations are
found in 7 CFR §205
– These regulations
address the production,
processing, handling,
labeling, and marketing
of organic products.
Wine Labeling:
Organic Labeling
• Prior approval from USDA
required to make organic
claim on “principal display
panel” and use USDA organic
seal
• Informational panel can have
certified organic ingredients
listed
– Organic certificate of ingredient
must be submitted to TTB
Wine Labeling: Organic Labeling
Prior to selling organic alcohol, a manufacturer’s label must be
approved through the following steps:
• Certifying agent reviews the alcohol label(s) to assess compliance
with USDA organic regulations.
• Certifying agent stamps/signs label(s), verifying compliance with
USDA organic regulations.
• TTB permitee (organic operation) completes the Certificate of Label
Approval (“COLA”) application.
• TTB permitee submits COLA application and label(s) approved by
the certifying agent to TTB. No longer requires a copy of the
organic certificate.
Wine Labeling: Organic Labeling
• However, on the
informational panel,
certified organic
ingredients can be listed
as such.
• If one does this, he or she
must also “obtain a copy
of that ingredient’s
organic certificate and
submit it to TTB.
If the wine is not
certified organic,
there cannot be any
claims that the wine
is organic on the
“principal display
panel” and the
bottle cannot use
the USDA organic
seal on the label.
Wine Labeling:
Organic Labeling
“Made with
Organic Grapes”
• Means that 100% of the
grapes used were
organic and this was
certified verifying wine
meets all organic
regulations by USDA
• Other ingredients need
not be organic
Wine Labeling: Organic Labeling
“Organic” “Made with Organic Grapes”
Overseen by a certifier? Yes Yes
USDA organic seal allowed? Yes No
Organic claims allowed in addition to
ingredient statement?
Yes Yes
Non-organic grapes allowed? No No
Added sulfites allowed? No Yes but only up to 100 parts per
million (and disclosed on label)
Wine Trade
Wine Trade: Importation
Permits
• Importer’s Basic
Permit
• Alcohol Dealer
Registration Form
from TTB
• A Certificate of Label
Approval (COLA) for
each product
Wine Trade: Importation
• Wine imported from
countries subject to
international agreements or
treaties must have proper
cellar treatment
• i.e. conform with US
practices & procedures
• Wine from other countries
require a certification
regarding procedures and
practices
Certification
Wine Trade: Importation
Duties, Taxes, and Fees
• Wine importers are responsible for federal excise taxes and duties
• Rates are set by TTB
Wine Trade: Exportation
Permit required for non-
bonded wine cellars
Taxpaid wine may be exported
to foreign country, i.e. this is
wine on which tax is already
paid
All exported wine must have
“export” on each container or
case of wine
Wine Trade:
New York Transporting/Shipping
Direct shipping
•Wine manufacturers
can take orders from
state residents and
ship direct to
consumer
•Out-of-state
wineries can ship to
New Yorkers if they
obtain permit and
allow New York
wineries to ship to
their residents
Shipping must be
through a
company with a
trucking permit
New York Reciprocity States
Arizona California Colorado Connecticut Georgia Hawaii Idaho
Illinois Maryland Massachusetts Michigan Missouri Montana New Jersey
New Mexico North Carolina Ohio Oregon South Carolina Tennessee Texas
Vermont Virginia Washington Wisconsin
Wine Trade:
New York Transporting/Shipping
Interstate shipment
• Anyone licensed to sell
wine in any other state
and obtains an out-of-
state “direct shipper’s
license” may ship up to
36 cases of wine
produced by that
person’s winery per
year directly to a New
York State resident
Wine Trade:
New York Transporting/Shipping
Intrastate shipment
• Once a license is obtained, a winery or
farm winery can ship up to 36 cases of
wine per year directly to a New York
State resident who is (1) over the age of
21 and (2) as long as it is not for resale.
• Label must clearly state: “contains wine-
signature of person age 21 or older
required for deliver-not for resale”
• Shippers must acquire signature of
person accepting delivery of above
stated requirements
Record Keeping
Record Keeping
• Any producer of wine must have records
showing the receipt and use of winemaking
materials received on the wine premises
• The date of receipt,
• The quantity received or quantity used or
produced (for juice),
• The name and address from whom it was
received,
• That date of use or other disposition of the
materials
Receipt of Materials and Production
Record Keeping
• Additional
requirements:
• A summary record
maintained by tax
class,
• Documentation of
wine production,
receipts, removals,
blending operations,
and losses, and
• May contain
information about
sugar, acid,
chemicals, etc.
Bulk
Still
Wine
Records
Record Keeping
Bottling and Bottled Wine
• If wine packaged on site
where it was
manufactured, must have
records of:
• The volume of wine
received, bottled, and
removed,
• The COLA serial
numbers, and
• Results of fill and alcohol
tests
Record Keeping
Removals and Receipts
Records must be kept when wine is removed from bond for
consumption or sale, which should be summarized daily to
nearest tenth of a gallon
Inventory must be kept if wine premise stores
taxpaid wine
Records must be kept for any unmerchantable
taxpaid wine returned to bond
Very specific information is required for a
transfer in bond
Record Keeping
Inventories
• Annual reports
•Necessary if less than 20,000
gallons of wine are on hand
and annual federal excise tax
will be filed
• Quarterly reports
•Necessary if less than 60,000
gallons of wine are on hand
and quarterly federal excise
tax return will be filed
• Monthly reports
•Necessary if more than
60,000 gallons of wine on
hand or more than $50,000
in federal excise tax paid each
year
Miscellaneous Issues
Other New York Laws
Wholesaler
• Must have an office in
New York State with an
employee present
during regular business
hours
• Wine must be sold in
sealed containers of less
than 15 gallons each
Franchise
• Must submit application
to NY Department of
Law before offers or
sales of franchises are
made
• Approval of application
allows franchise to be
effective for one year
Other TTB Regulations
• Regulated by TTB, but does
not require prior approval
• Prohibited practices are:
• False or untrue
statements
• Statements not
consistent with label
• False or misleading
statements disparaging
competitor
• Misleading guarantees
Advertising
Other TTB Regulations
Advertising
• Items that must be contained in
advertisement:
• Name and address of the permittee
responsible for the advertisement’s
publication or broadcast
• Class, type, and distinctive designation
• Exception: Only name & address required for
advertisement of general wine line or all of
the wine products of one company
Oh, P.S. – I Wrote a Book!
Cari B. Rincker & Patrick B.
Dillon, “Field Manual: Legal
Guide for New York Farmers
& Food Entrepreneurs”
(2013)
Available at
http://www.amazon.com/Fi
eld-Manual-Legal-Farmers-
Entrepreneurs/dp/1484965
191
www.newyorkagriculturelaw.com
Please Stay in Touch
• Send Me Snail Mail: 535 Fifth Avenue, 4th Floor,
New York, NY 10017
• Call Me: (212) 427-2049 (office)
• Email Me: cari@rinckerlaw.com
• Visit My Website: www.rinckerlaw.com
• Read My Food, Farm & Family Law Blog:
www.rinckerlaw.com/blog
• Tweet Me: @CariRincker @RinckerLaw
• Facebook Me: www.facebook.com/rinckerlaw
• Link to Me:
http://www.linkedin.com/in/caririncker

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Wine & Vineyard Law: Federal and New York State Licenses, Permits & Regulations

  • 1. Wine & Vineyard Law: Federal and New York State Licenses, Permits & Regulations National Business Institute (“NBI”) November 10, 2015 By Cari B. Rincker, Esq.
  • 2. My Background • Grew up on a beef cattle farm in Central Illinois • Education – A.S. in Agriculture from Lake Land College – B.S. in Animal Science from Texas A & M – M.S. in Ruminant (Beef Cattle) Nutrition from University of Illinois – J.D. from Pace Law School (2007)
  • 3. My Background • Chair of the American Bar Association, General Practice, Solo & Small Firm Division’s Agriculture Law Committee • My food and agriculture client base – Farmers to ranchers – Small to mid-size agri- business – Food entrepreneurs
  • 4. And I Also Love Wine
  • 5. Overview The Players Types of Wineries Licenses, Permits & Other Paperwork Where Wine Can Be Sold Excise Tax Wine Labeling Wine Trade Record Keeping Misc. Issues
  • 7. The Players • Permit • Labeling and advertising • Fair trade practices Federal Alcohol Administration Act (“FAAA”) • Qualification of premises • Production • Payment of taxes Internal Revenue Code (“IRC”)
  • 8. The Players: Federal Level Alcohol and Tobacco Tax and Trade Bureau (“TTB”) • Administers laws imposed by laws set by FAAA and IRC concerning: • Alcohol production and distribution • Wholesale businesses • Alcohol advertising and labeling • Not responsible for retail sale of alcohol or alcohol abuse programs
  • 9. The Players: New York State Level • Alcoholic Beverage Act (“ABC”) – Governs licenses and regulations within New York State • New York State Liquor Authority • New York Licensing Bureaus – Located in New York City, Albany, & Buffalo – Receives, examines, & investigates license and permit applications
  • 11. Types of Wineries • Typical commercial winery that produces and stores its own wine • Responsible for keeping own records, reports, wine labeling, and paying taxes • Requires establishing a premises, obtaining a bond, and receiving permission from TTB “Stand Alone” Bonded Winery
  • 12. Types of Wineries • Two or more wineries share use of a bonded winery’s facility • Bonded winery is host & only one required to obtain a bond • Other wineries must qualify on their own as a winery Alternating Proprietor
  • 13. Types of Wineries • Makes wine that is ordered by customers, who then resell it • Producer must qualify as a fully bonded winery • Crushes grapes, ferments, & bottles • Client is a wholesaler who provides grapes for crushing Custom Crush
  • 14. Types of Wineries • Solely responsible for storing, blending, and bottling of wine • No fermentation takes place • Requires bond similar to bonded winery Bonded Wine Cellar
  • 15. Licenses, Permits & Other Paperwork
  • 16. Licenses, Permits & Other Paperwork Being in the wine business is considered a privilege by the government and this privilege can be revoked. • For this reason, it is highly regulated at the both the state and federal level.
  • 17. Licenses, Permits & Other Paperwork TTB must approve all applications for wineries before business operations can begin. • Keep in mind the type of operation (e.g., bonded winery, alternating proprietorship) New York has a Tied House Law where a licensed wine retailer cannot also be a manufacturer or wholesaler of alcohol (or vice versa)
  • 18. Licenses, Permits & Other Paperwork • There is no fee at the federal level to apply for or maintain approval to operate TTB-regulated alcohol and tobacco businesses. • Applications are reviewed by the TTB Wine Applications Unit Specialist • In some cases, it is referred to the TTB Trade Investigations Division (“TID”) Field Office for on-site inspection Required TBB Documentation
  • 19. Licenses, Permits & Other Paperwork • For operation of bonded winery, wine cellar, or wine bottling house • Form must be sent in duplicate to Director of TBB, National Revenue Center, Alcohol and Tobacco Tax and Trade Bureau • No cost associated with application Application to Establish & Operate Wine Premises
  • 20. Licenses, Permits & Other Paperwork • Necessary to engage in business of producing or processing wine, or importing or wholesale of alcohol • Application must be sent in duplicate to TBB and Alcohol and Tobacco Tax and Trade Bureau Basic Permit In New York, an Alcohol Permit must be obtained ($38)
  • 21. Licenses, Permits & Other Paperwork Personnel Questionnaire for TBB • The business name and contact information • Personal and contact information for all business owners, officers, directors, members, partners, etc. • Questions regarding each individual’s arrest, criminal and business background history • Bank references’ and personal references’ contact information
  • 22. Licenses, Permits & Other Paperwork Wine Bond • Worksheet from TTB used to determine appropriate amount of bond required for specific establishments • Required for every operation that produces or stores untaxed wine • Also need to include • Personal contact information for the obligor or all partners if it is a partnership • Bond coverage and category
  • 23. Licenses, Permits & Other Paperwork • This form is filled out with the TBB to determine the winery’s impact on the environment in terms of waste and pollution • Application requires descriptions of: • Heat and power to be used and its purpose • Air pollution control equipment proposed • Types of wastes, amount of those wastes, & methods of disposal Environmental Information
  • 24. Licenses, Permits & Other Paperwork Supplemental Information on Water Quality Consideration • This form is to determine if a certificate or waiver by the State Water Quality Agency is required • Sent to the TBB and the National Revenue Center
  • 25. Licenses, Permits & Other Paperwork Power of Attorney • This is a signing authority for Corporate and LLC officials • Allows winery to have their appointed attorney represent the principal with the TTB
  • 26. Licenses, Permits & Other Paperwork • Required before any business activity can take place • Requires information regarding: • Type of dealer • Subclass • Business information Special Tax Registration
  • 27. Licenses, Permits & Other Paperwork Required in some cases • Alternating Proprietor Agreement or Contract • Lease agreement • Organizational documents for LLC, Corp, or LP
  • 28. Corporate Formality Paperwork For TBB Type of Entity Documents Requested Corporations or limited liability companies (a) Charter or certificate of existence, incorporation, or organization. (b) Names and addresses of officers, directors, members and managers. (c) Certified extracts of minutes authorizing certain individuals to sign. (d) Statement showing the number of shares/ownership of each class of stock/interest authorized and outstanding, and the voting rights of the respective owners or holders. (e) Statement of interest: Names and addresses of the 10 persons having the largest ownership or other interest and nature and amount of the stockholding or other interest of each, whether the interest appears in the name of the interested party or in the name of another party. The Director, National Revenue Center may request the names of interested persons if the applicant corporation or LLC is wholly owned or controlled by another corporation or LLC.
  • 29. Corporate Formality Paperwork For TBB Type of Entity Documents Requested Partnerships (a) True copies of articles or partnership agreement, if any, and of the certificate of partnership where required to be filed by local authority. (b) Description of the wine premises. (c) Whether, if the application is not for a bonded wine premises where production of wine will take place, the applicant agrees to having his or her name listed in a TTB publication to be distributed to the public. (d) Any trade names. (e) Any basic permits and bonds (include the present one). (f) If the applicant is a volatile fruit-flavored concentrate operation, he or she must follow additional instructions found at the end of the form. (g) If there are any other operations occurring on the wine premises, these must be disclosed.
  • 30. Licenses, Permits & Other Paperwork Suggested documents for TBB • Trade name registrations • Diagram of bonded wine premises
  • 31. New York Paperwork Requirements •Requirements for individuals •Over 21 and •US Citizen, permanent resident, or citizen of country who is able to obtain visa to enter US to engage in trade •Requirements for LLC or Corp •Officer must be over 21 and •US Citizen, permanent resident, or citizen of country who is able to obtain visa to enter US to engage in trade Person who is convicted felon, a police officer, or whose license to sell alcoholic beverages was suspended within last 2 years cannot obtain license
  • 32. New York Paperwork • Two categories of licenses under ABC: – Retail • On premises – Customer drinks wine at retailer’s location • Off premises – Store where wine is sold • Both types are required to have $1,000.00 bond at all times – Wholesaler/ manufacturer
  • 33. New York Paperwork • Farm License Winery – Farm grows fruit on premises where wine is produced – Can be sold to dealers, distributors, and individuals who visit the farm
  • 34. New York Paperwork Wine Tasting Licenses • Anyone licensed to sell wine is permitted to conduct wine tastings on their premises • Winery can conduct tastings of NY labeled wine at establishments that have licenses to sell wine at retail for on-site consumption • Tasting must occur under supervision of winery owner, wholesaler, importer, or agent • Farm wineries can also conduct tastings at the New York State Fair, county fairs, and farmers markets
  • 35. Where Wine Can Be Sold
  • 36. Where Wine Can Be Sold License Class Description Wine Product A "wine product" is defined as a beverage containing wine with added juice, flavoring, water, citric acid, sugar and carbon dioxide, not containing more than six percent alcohol by volume (typically referred to as "wine coolers"). Restaurant Wine License for on-premises consumption of wine and beer in a place where food is prepared in such quantities that the sale of wine and beer is not the prime source of revenue. Hotel Wine Allows on-premises sale of wine and beer in both a restaurant in the hotel as well as room service. Club Wine Does NOT mean "nightclub" or "private bar" designed to restrict admission to a specific group of persons, or class of people. See "Club Beer" for definition of "Club." Allows for on-premises sale of wine or beer for club members and guests. The club must appoint an ABC officer.
  • 37. Where Wine Can Be Sold License Class Description Tavern Wine Allows sale for on-premises consumption of wine and beer. Liquor Store For the sale of liquor and wine (no beer) for consumption off the premises. The only additional items allowed to be sold, such as ice and corkscrews, are listed in the ABC Law. Only one license is allowed per person (corporation, partnership, etc.). Wine Store Not to be confused with the Retail Wine Outlet for a Farm Winery. License to sell WINE ONLY (not liquor or beer) for off-premises consumption, under the same basic conditions as a Liquor Store.
  • 39. Excise Tax • Tax paid on purchases made on a specific good, such as wine • Tax increases as alcohol level increases Amount of Alcohol Excise Tax If ½ of 1% to less than 14% alcohol $1.07 If more than 14% but less than 21% alcohol $1.57 If more than 21% but less than 24% alcohol $3.15 Artificially carbonated $3.30 Sparkling $3.40
  • 40. Excise Tax • Up to $0.90 per gallon on part of the small domestic producer’s annual taxable removals, other than sparkling wine • Theory is to make tax rates for small wineries to what they were before 1991 when tax on wine was increased to $0.90 per gallon Credit for small domestic producers
  • 42. Wine Labeling TTB Pre-Approval Components of a Wine Label Standards of Identity Varietal Labeling Type Designations Geography & Winemaking Organic Labeling
  • 43. Wine Labeling • TBB Preapproval – Wine labels must be pre-approved by TTB if entering into interstate commerce. • To comply with the TTB, the party responsible for bottling the wine must obtain a Certificate of Label Approval (“COLA”) from the TTB after the approval. • However, if the label is made strictly for sample usage, it does not need a COLA. – The turn-around time for currently processing a label application is 23 days for wines.
  • 45. Wine Labeling: Components of a Wine Label • Vintage Date – When the grapes were harvested – #1 shows the Vintage Date – If shown 95% of grapes must have been harvested by that year
  • 46. Wine Labeling: Components of a Wine Label • Estate Bottled – This means that 100% of the grapes used in the wine came from land by that winery (“estate”).
  • 47. Wine Labeling: Components of a Wine Label • Appellation of Origin or Wine Region – This is included on a label if 75% of the grapes used to make the wine were grown in whatever location is named. – Appellation of Origin provides the geographic origin of where the grapes were grown.
  • 48. Wine Labeling: Components of a Wine Label • Varietal Designation – This is the grape variety that is used to make the wine – This isn’t required – could just say “red wine” “white wine” “rose wine”
  • 49. Wine Labeling: Components of a Wine Label • County-of-Origin (“COOL” or “mCOOL”) – Although this might change due to WTO issues, COOL is still the law in the U.S. (as of October 25, 2015) – This is required by the U.S. Customs and Border Protection for containers of imported wine.
  • 50. Wine Labeling: Components of a Wine Label • Name of Winery or Brand Name – #2 on this Label – Must not mislead the consumer about the age, identity, origin or other character of the wine
  • 51. Wine Labeling: Components of a Wine Label • Alcohol content – Must include percent by volume of alcohol – Can be labeled “table wine” or “red wine” if content between 7% and 14% – Dessert wine if over 14%
  • 52. Wine labeling: Components of a Wine Label • Declaration of Sulfites – If there is 10 or more parts per million of sulfur dioxide, this must be indicated if the wine is intended for interstate commerce – #7 on this label
  • 53. Wine Labeling: Components of a Wine Label • Name and address of Bottler or Importer – Must appear on bottle/container – Can be operating name of winery or trade name – #4 on this label
  • 54. Wine Labeling: Components of a Wine Label • Net contents – Must be indicated in metric units – #5 on this label
  • 55. Wine Labeling: Components of a Wine Label • Health Statement – 2 required statements: • “According to the surgeon general, women should not drink alcoholic beverages during pregnancy because of the risk of birth defects” • “Consumption of alcoholic beverages impairs your ability to drive a car or operate machinery, and may cause health problems.” – #7 on this label
  • 56. Wine Labeling: Standards of Identity With Wine
  • 57. Wine Labeling: Standards of Identity of Wines Divided into 9 classes to describe taste, production, method & composition of waste
  • 58. Wine Labeling: Standards of Identity of Wines • Grape wine – This includes table and dessert wine as well and refers to wine produced by the normal alcoholic fermentation of grapes.
  • 59. Wine Labeling: Standards of Identity of Wines • Sparkling Wine – Includes sparkling wine and champagne – Sparkling wine is grape wine made “sparkling” with carbon dioxide that results directly from the fermentation of the wine within a closed container.
  • 60. Wine Labeling: Standards of Identity of Wines • Carbonated Grape Wine – This is made effervescent by carbon dioxide other than that resulting from the second fermentation of the wine in a closed container.
  • 61. Wine Labeling: Standards of Identity of Wines • Citrus Wine – This is similar to grape wine, but uses different fruits. • Fruit Wine – This is similar to grape and citrus wines, but using other fruits, such as berries.
  • 62. Wine Labeling: Standards of Identity of Wines • Wine from other agricultural products – Uses other agricultural products besides fruit – Ex: raisin wine and sake (rice wine)
  • 63. Wine Labeling: Standards of Identity of Wines • Aperitif Wine – An example of this is Vermouth; it is a wine with an alcohol content more than 15% and is grape wine with added brandy or other alcohol, and flavoring.
  • 64. Wine Labeling: Standards of Identity of Wines • Imitation – Wine containing any synthetic materials (such as wine made from mixing water with residue that remains after pressing grapes) and must state “imitation” wine on the bottle.
  • 65. Wine Labeling: Standards of Identity of Wines • Substandard – “Substandard” wine must be listed as well if it is substandard wine (which is too acidic to meet the standard of other wine).
  • 66. Wine Labeling: Standards of Identity of Wines • Retsina Wine – This is grape wine with (tree) resin added, usually pine resin. – This wine is popular in Greece
  • 68. Wine Labeling: Varietal Labeling Display of single type of grape used in that wine Can be used rather than stating a class Variety grape name must be approved by TTB Origin of grape must appear on label if using varietal labeling
  • 69. Wine Labeling: Type Designations of Varietal Significance Type Designation Description Muscadine This is an American wine that derives at least 75% of its volume from Muscadinia rotundifolia grapes. Muscatel This is an American wine that derives its predominant taste, aroma, characteristics and at least 75 percent of its volume from any Muscat grape source. Muscat or Moscato This is American wine that derives at least 75% of its volume from any Muscat grape source. Moscato is the Italian name for Muscat. Scuppernong This is an American wine which derives at least 75% of its volume from bronze Muscadinia rotundifolia grapes. Large variety of Muscadine. Gamay Beaujolais An American wine which derives at least 75% of its volume from Pinot noir grapes, Valdiguié grapes, or a combination of both. 27 CFR § 4.25
  • 71. Wine Labeling: Geography & Winemaking Generic e.g., Sake, Vermouth Semi- generic e.g., New York Chablis, Napa Valley Burgundy Non- generic Non-generic wines which are not distinctive designations of specific grape wines include American, California, Lake Erie, Napa Valley, New York State, French, and Spanish Wines can be known by region from which they come from and fit into 3 categories
  • 73. Wine Labeling: Organic Labeling • Organic wine is overseen by USDA’s Agriculture Marketing Service’s (“AMS”) National Organic Program (“NOP”) & TBB • NOP regulations are found in 7 CFR §205 – These regulations address the production, processing, handling, labeling, and marketing of organic products.
  • 74. Wine Labeling: Organic Labeling • Prior approval from USDA required to make organic claim on “principal display panel” and use USDA organic seal • Informational panel can have certified organic ingredients listed – Organic certificate of ingredient must be submitted to TTB
  • 75. Wine Labeling: Organic Labeling Prior to selling organic alcohol, a manufacturer’s label must be approved through the following steps: • Certifying agent reviews the alcohol label(s) to assess compliance with USDA organic regulations. • Certifying agent stamps/signs label(s), verifying compliance with USDA organic regulations. • TTB permitee (organic operation) completes the Certificate of Label Approval (“COLA”) application. • TTB permitee submits COLA application and label(s) approved by the certifying agent to TTB. No longer requires a copy of the organic certificate.
  • 76. Wine Labeling: Organic Labeling • However, on the informational panel, certified organic ingredients can be listed as such. • If one does this, he or she must also “obtain a copy of that ingredient’s organic certificate and submit it to TTB. If the wine is not certified organic, there cannot be any claims that the wine is organic on the “principal display panel” and the bottle cannot use the USDA organic seal on the label.
  • 77. Wine Labeling: Organic Labeling “Made with Organic Grapes” • Means that 100% of the grapes used were organic and this was certified verifying wine meets all organic regulations by USDA • Other ingredients need not be organic
  • 78. Wine Labeling: Organic Labeling “Organic” “Made with Organic Grapes” Overseen by a certifier? Yes Yes USDA organic seal allowed? Yes No Organic claims allowed in addition to ingredient statement? Yes Yes Non-organic grapes allowed? No No Added sulfites allowed? No Yes but only up to 100 parts per million (and disclosed on label)
  • 80. Wine Trade: Importation Permits • Importer’s Basic Permit • Alcohol Dealer Registration Form from TTB • A Certificate of Label Approval (COLA) for each product
  • 81. Wine Trade: Importation • Wine imported from countries subject to international agreements or treaties must have proper cellar treatment • i.e. conform with US practices & procedures • Wine from other countries require a certification regarding procedures and practices Certification
  • 82. Wine Trade: Importation Duties, Taxes, and Fees • Wine importers are responsible for federal excise taxes and duties • Rates are set by TTB
  • 83. Wine Trade: Exportation Permit required for non- bonded wine cellars Taxpaid wine may be exported to foreign country, i.e. this is wine on which tax is already paid All exported wine must have “export” on each container or case of wine
  • 84. Wine Trade: New York Transporting/Shipping Direct shipping •Wine manufacturers can take orders from state residents and ship direct to consumer •Out-of-state wineries can ship to New Yorkers if they obtain permit and allow New York wineries to ship to their residents Shipping must be through a company with a trucking permit
  • 85. New York Reciprocity States Arizona California Colorado Connecticut Georgia Hawaii Idaho Illinois Maryland Massachusetts Michigan Missouri Montana New Jersey New Mexico North Carolina Ohio Oregon South Carolina Tennessee Texas Vermont Virginia Washington Wisconsin
  • 86. Wine Trade: New York Transporting/Shipping Interstate shipment • Anyone licensed to sell wine in any other state and obtains an out-of- state “direct shipper’s license” may ship up to 36 cases of wine produced by that person’s winery per year directly to a New York State resident
  • 87. Wine Trade: New York Transporting/Shipping Intrastate shipment • Once a license is obtained, a winery or farm winery can ship up to 36 cases of wine per year directly to a New York State resident who is (1) over the age of 21 and (2) as long as it is not for resale. • Label must clearly state: “contains wine- signature of person age 21 or older required for deliver-not for resale” • Shippers must acquire signature of person accepting delivery of above stated requirements
  • 89. Record Keeping • Any producer of wine must have records showing the receipt and use of winemaking materials received on the wine premises • The date of receipt, • The quantity received or quantity used or produced (for juice), • The name and address from whom it was received, • That date of use or other disposition of the materials Receipt of Materials and Production
  • 90. Record Keeping • Additional requirements: • A summary record maintained by tax class, • Documentation of wine production, receipts, removals, blending operations, and losses, and • May contain information about sugar, acid, chemicals, etc. Bulk Still Wine Records
  • 91. Record Keeping Bottling and Bottled Wine • If wine packaged on site where it was manufactured, must have records of: • The volume of wine received, bottled, and removed, • The COLA serial numbers, and • Results of fill and alcohol tests
  • 92. Record Keeping Removals and Receipts Records must be kept when wine is removed from bond for consumption or sale, which should be summarized daily to nearest tenth of a gallon Inventory must be kept if wine premise stores taxpaid wine Records must be kept for any unmerchantable taxpaid wine returned to bond Very specific information is required for a transfer in bond
  • 93. Record Keeping Inventories • Annual reports •Necessary if less than 20,000 gallons of wine are on hand and annual federal excise tax will be filed • Quarterly reports •Necessary if less than 60,000 gallons of wine are on hand and quarterly federal excise tax return will be filed • Monthly reports •Necessary if more than 60,000 gallons of wine on hand or more than $50,000 in federal excise tax paid each year
  • 95. Other New York Laws Wholesaler • Must have an office in New York State with an employee present during regular business hours • Wine must be sold in sealed containers of less than 15 gallons each Franchise • Must submit application to NY Department of Law before offers or sales of franchises are made • Approval of application allows franchise to be effective for one year
  • 96. Other TTB Regulations • Regulated by TTB, but does not require prior approval • Prohibited practices are: • False or untrue statements • Statements not consistent with label • False or misleading statements disparaging competitor • Misleading guarantees Advertising
  • 97. Other TTB Regulations Advertising • Items that must be contained in advertisement: • Name and address of the permittee responsible for the advertisement’s publication or broadcast • Class, type, and distinctive designation • Exception: Only name & address required for advertisement of general wine line or all of the wine products of one company
  • 98. Oh, P.S. – I Wrote a Book! Cari B. Rincker & Patrick B. Dillon, “Field Manual: Legal Guide for New York Farmers & Food Entrepreneurs” (2013) Available at http://www.amazon.com/Fi eld-Manual-Legal-Farmers- Entrepreneurs/dp/1484965 191 www.newyorkagriculturelaw.com
  • 99. Please Stay in Touch • Send Me Snail Mail: 535 Fifth Avenue, 4th Floor, New York, NY 10017 • Call Me: (212) 427-2049 (office) • Email Me: cari@rinckerlaw.com • Visit My Website: www.rinckerlaw.com • Read My Food, Farm & Family Law Blog: www.rinckerlaw.com/blog • Tweet Me: @CariRincker @RinckerLaw • Facebook Me: www.facebook.com/rinckerlaw • Link to Me: http://www.linkedin.com/in/caririncker

Editor's Notes

  1. In this type of winery, the documents that must be filed with the TTB include: 1) Application for Basic Permit; 2) Application to Establish and Operate a Wine Premises; 3) Wine Bond (generally in the amount of $1,000 for smaller wineries); 4) Environmental/Water Quality information; 5) Signing Authority or Power of Attorney; 6) Personnel Questionnaires for Owners/Officers/Directors; and 7) Other supporting documentation. All applications and form are discussed in II.C infra.
  2. For this type of winery, the documents that must be filed with the TTB include: 1) Application for Basic Permit; 2) Application to Establish and Operate a Wine Premises; 3) Wine Bond (minimum amount of $1,000); 4) Diagram of premises depicting the alteration agreement; 5) Environmental/Water Quality information; 6) Signing Authority or Power of Attorney; 7) Personnel Questionnaires for Owners/Officers/Directors; and 8) Other supporting documentation.
  3. In this type of winery, the documents that must be filed with the TTB include: 1) Application for Basic Permit; 2) Signing Authority or Power of Attorney; 3) Personnel Questionnaires for Owners/Officers/Directors; and 4) Other supporting documentation.
  4. In this type of winery, the following documents must be filed with the TTB: 1) Application for Basic Permit; 2) Application to Establish and Operate a Wine Premises; 3) Wine Bond (minimum amount of $1,000); 4) Environmental/Water Quality information; 5) Signing Authority or Power of Attorney; 6) Personnel Questionnaires for Owners/Officers/Directors; and 7) Other supporting documentation.
  5. All documents may be sent in the U.S. mail, and some can be filled out online The TTB recommends using their online system, when available, for faster results. In any case, the TTB should usually respond to the applicant within about 7-10 business days.
  6. An applicant should be prepared to provide the following information:   A serial number (which means that if this is the first application, it should be numbered “1.” The date The registry number (blank if this is the first application) Name and address
  7. An applicant should be prepared to provide the following information:   The federal employer identification number (“FEIN”) of the business Any D/B/A name Labeling trade names (if applicable) Type of business to be conducted at the premises Ownership information for sole owners, all general parties, LLC members/managers, corporate officers and directors, and shareholders with more than 10% voting stock and the personal information following below Name, social security number, date of birth and place, citizenship status Alias Residences for the past 5 years Gender Whether the applicant or any other persons listed for the business on this form has ever been denied a permit, license, or other authorization to engage in business to manufacture, distribute, import, sell, or use alcohol products by any government agency or had such permit, license, etc. suspended or terminated Whether the applicant or any other persons listed for the business on this form has ever been arrested for, charged with, or convicted of any crime under federal, state or foreign laws other than traffic violations or non-felonious offenses Any label approvals should be provided as well (TTB form 5100.31). This form is discussed under wine importation permits, infra.
  8. This is TTB Form 5120.36. This worksheet figures out the appropriate amount of the bond. This is required for every operation that produces or stores untaxpaid wine. One must file duplicate original bonds with the Director, National Revenue Center, Alcohol and Tobacco Tax and Trade Bureau. There is no cost for this form and it should be submitted with the other documentation in this section as the entire application to the TTB.   An applicant should be prepared to provide the following information:   Personal contact information for the obligor or all partners if it is a partnership Bond coverage and category.   Available at http://www.ttb.gov/forms/f512036.pdf (last visited September 11, 2015).
  9. Personal contact information Number of employees Location (specific address and description of premises and surrounding area) Type of heat and power to be used and its purpose Description of any air pollution control equipment proposed for use in connection with fuel burning equipment, boilers, or smokestacks Description of any solid waste and the amount Proposed methods of disposal of solid waste Description of any air pollution control equipment proposed for use in connection with any incinerators Description of any liquid waste and the amount Proposed methods of disposal of liquid waste Description of any pollution control equipment that could monitor quality and/or control liquid waste Any expected noise.
  10. This is TTB Form 5000.30. This form is to determine if a certification or waiver by the applicable State Water Quality Agency is required under Section 21 of the Federal Water Pollution Control Act. See 33 U.S.C. §1341(a). An original and one copy of this form should be sent to the Director, National Revenue Center, Alcohol and Tobacco Tax and Trade Bureau. There is no cost for this form and it should be submitted with the other documentation in this section as the entire application to the TTB.   An applicant should be prepared to provide the following information:   Application information from TTB Form 5000.29 Description of any direct or indirect discharge into navigable waters which may result from the winery activities, and the location of where such discharge may enter navigable waters Dates on which the winery activities will begin and end and, if known, when the discharge date will be Description of the methods and means used to monitor the quality and characteristics of the discharge and the equipment or facilities employment in the treatment or control of waste. Available at http://www.ttb.gov/forms/f500030.pdf (last visited September 11, 2015).
  11. This is TTB Form 5000.8 or Signing Authority for Corporate and LLC Officials 5100.1. Obviously, this form will depend on what type of entity the applicant’s winery is, but shows the TTB the appointed attorney to represent the principal. This form must be filed in duplicate and sent to Director, National Revenue Center, Alcohol and Tobacco Tax and Trade Bureau. There is no cost for this form and it should be submitted with the other documentation in this section as the entire application to the TTB. This form is self-explanatory.
  12. This is TTB Form 5630.5d. This form is required before any business activities begin. The special (occupational) tax on producers and marketers of alcoholic beverages was repealed by Section 11125 of Public Law 109-59 as of July 1, 2008. This form gets sent to the Alcohol and Tobacco Tax and Trade Bureau at the address listed on the form. There is no cost for this form and it should be submitted with the other documentation in this section as the entire application to the TTB.   Applicants should be prepared to provide the following information: Personal contact information Whether this is a new business, existing business, change in any business information such as name or ownership information, etc. Type of dealer (retail or wholesale) and the subclass (liquor, beer, wine, spirits, or a combination thereof) Business address Ownership personal contact information. Available at http://www.ttb.gov/forms/f56305d.pdf (last visited September 11, 2015).
  13. Organizational Documents For a limited liability company, the TTB requires a copy of the Articles of Organization, copy of the Operating Agreement, list of members (their addresses and their percentage of interest), and a copy of the Certificate of Organization, where appropriate. For New York, this would be the Operating Agreement.   For a corporation, the TTB requires a copy of the Articles of Incorporation, a copy of the Bylaws, a list of officers, directors and anyone else holding more than 10% stock (their addresses and the number of shares held), and a copy of the Certificate of Incorporation, where appropriate. For New York, this includes a Certificate of Incorporation and Articles of Organization.   For general and limited partnerships (“LP”), the TTB requires a copy of the Partnership Agreement, a list of the partners, a copy of the Certificate of Partnership where applicable. If there is no written partnership agreement, then the partners will need to submit a written statement that states this and is signed by all of the partners.
  14. Trade Name Registration   This is necessary to show the winery’s Trade Name. This is when a name other than the official corporate or business name is used on a label. This trade name must be consistent with the trade name displayed on all of the TTB application documents. This trade name is requested in line item #5 on the Application for Basic Permit Under the Federal Alcohol Administration Act.   Diagram of the Bonded Wine Premises   This is a diagram of bonded wine premises from all alternating proprietor hosts and tenants. This is only needed if there is an alternating host relationship. The TTB does not require it, but suggests it, as it is helpful during TTB’s processing of the application.
  15. In New York, wine does not require state approval if the label has been approved by TTB
  16. If there is a vintage date, an origin smaller than a country must be included as well. If a state of country is used, then 85% of the grapes must be from that year. If a viticultural area is used, then 95% of the grapes must be from that year
  17. The winery must be located in a viticultural area. In addition, that winery must have crushed and fermented the grades, finished, aged, and bottled the wine.
  18. Appellations are defined either by state or country, or by federally-recognized growing regions called American Viticultural Areas (“AVAs”). Chart in materials on this
  19. For American wines, the following type designations may be used if the wine is labeled with an appellation of origin as defined in 27 CFR §4.25.  
  20. Generic   A generic designation is extremely broad. It includes wines such as Sake and Vermouth.   Semi-Generic   A semi-generic wine is a wine made in the U.S., but named after a place that the TTB required to be modified by a U.S. name of geographic origin. This includes wines such as a New York Chablis or a Napa Valley Burgundy.   Non-Generic   Non-generic wines refer to a name of geographic significance that is not generic or semi-generic and can only be used to designate wines of the origin indicated by such name. Non-generic wines which are not distinctive designations of specific grape wines include American, California, Lake Erie, Napa Valley, New York State, French, and Spanish. Examples of nongeneric names which are also distinctive designations of specific grape wines are: Bordeaux Blanc, Bordeaux Rouge, Graves, Medoc, Saint-Julien, Chateau Yquem, Chateau Margaux, Chateau Lafite, Pommard, Chambertin, Montrachet, Rhone, Liebfraumilch, Rudesheimer, Forster, Deidesheimer, Schloss Johannisberger, Lagrima, and Lacryma Christi.   See 27 CFR §4.24(a)(2). See 27 CFR §4.24(c).
  21. 1. Certifying agent reviews the alcohol label(s) to assess compliance with USDA organic regulations. 2. Certifying agent stamps/signs label(s), verifying compliance with USDA organic regulations. 3. TTB permitee (organic operation) completes the Certificate of Label Approval (“COLA”) application. 4. TTB permitee submits COLA application and label(s) approved by the certifying agent to TTB. No longer requires a copy of the organic certificate.
  22. Side note about GMO free
  23. The first thing that must be done if one wants to import alcohol is to apply for an Importer’s Basic Permit. The applicant must also complete the Alcohol Dealer Registration Form (TTB Form 4530.5[d]) and obtain a COLA for each product/label. One must also apply for a Wholesaler’s Basic Permit if one plans to sell alcohol beverages other than what is directly imported with the Importer’s Basic Permit. To obtain a COLA, the importer must file an "Application for and Certification/Exemption of Label/Bottle Approval," on TTB 5100.31 (PDF) with TTB’s Advertising, Labeling and Formulation Division (ALFD). This can be found at the TTB’s website, available at: http://www.ttb.gov/ponl/permits-online.shtml. See TTB’s website on importing available at http://www.ttb.gov/itd/importing_alcohol.shtml (last visited September 7, 2015).
  24. Wines that are imported subject to international agreements or treaties must have proper cellar treatment of the wine (which means it must conform with practices and procedures acceptable to the U.S.). Wines imported from countries without an agreement or treaty need to have a certification regarding practices and procedures used to produce such wine. See 26 U.S.C. 5382. This certification may be either: (1) “a statement from the producing country’s government or government-approved entity having oversight or control of enological practices. This form of certification includes the results of a laboratory analysis of the wine performed by either a government laboratory or a laboratory certified by the government of the producing country” or (2) “a statement from the importer, that is, a ‘self-certification.’”   One may self-certify “if an importer or its affiliate owns or controls a winery operating under a basic permit issued under the FAAA, that importer may certify that the practices and procedures used to produce the wine constitute proper cellar treatment (self-certification). An importer who self-certifies does not need to obtain a producing country certification and laboratory analysis.”   See TTB’s website available at http://www.ttb.gov/itd/importing_alcohol.shtml (last visited September 7, 2015). See TTB’s website available at http://www.ttb.gov/wine/qa.shtml#Q12 (last visited September 7, 2015).
  25. If a winery is not a proprietor of a bonded wine cellar and the winery wants to export taxpaid wine, then the winery must first obtain a permit. Taxpaid wine may be exported to a foreign country, for use as supplies on U.S. vessels and aircrafts, transfer to and deposit into a foreign-trade zone for exportation or storage pending exportation, or shipment to the U.S. armed forces for uses overseas. Any exported wine must have the word “export” on each container or case of wine. If the winery is a wholesaler and the winery is removed taxpaid or tax determined wine, then the winery can make a claim for drawback of taxes. On the Form TTB 5120.24, there must be acceptable proof of exportation. Taxpaid wine is wine on which a tax has already been paid. The federal excise tax is required to be paid when wine is shipped out for sale. See 27 CFR §28.40 through 42.
  26. The states currently who participate in this reciprocity include: