Michigan Alcoholic Beverage Excise Tax: Important change shifts liabilities from supplier to wholesaler on February 1, 2015
The Michigan Liquor Control Commission (MLCC) is making a significant change to the regulations for alcoholic beverage distribution within the state. Beginning February 1, 2015 Michigan alcoholic beverage wholesalers will be responsible for the filing and payment of all wine, malt, and low alcohol mixed spirit drink excise taxes. Please note, all spirits over 10% ABV are controlled by the state and no change or action is needed. Currently, manufacturers and out-of-state suppliers are responsible for excise tax remittance on their sales to Michigan wholesalers. The January 2015 filing period is the last period these suppliers are obligated to complete before Michigan wholesalers must take responsibility for excise tax reporting and remittance. The reports listed below will no longer be completed by suppliers beginning with the February 2015 filing period and onward: The MLCC is still finalizing the new reporting requirements for suppliers and wholesalers and we will let you know when they release more information.
- Michigan Form LCC-3803 Beer Tax Report and LCC-3886 Beer Shipment Report
- Michigan LCC-3890 Wine Tax Report Sales to Distributors
- Michigan LC-MW 891 Mixed Spirit Drink Tax Report
Do I need to change my pricing?
Yes, depending on how you determine the prices at which you sell to wholesalers, action may be required. Most domestic wineries, breweries, and importers calculate the price at which they sell to wholesalers very carefully. It is an equation made up of many supplier and wholesaler costs, including production, logistics, retail prices, excise taxes, etc. The transition of the excise tax collection, reporting and remittance burden from the manufacturers and out-of-state suppliers to the wholesaler will be a joint effort in negotiating prices.
What are my next steps?
- Suppliers can throw away those old forms starting in March because you won’t need them anymore.
- Wholesalers should await notification from the state on new reporting and remittance requirements, they’re still working to finalize the rules.
- Suppliers need to recalculate prices and communicate to their wholesalers.
- Await more information from ShipCompliant and the MLCC on future reporting requirements in March for February sales.