ShipCompliant End of Year Virtual Seminar Recap

Daniel Kostrzewa | December 19, 2018

2019 is rapidly approaching! Which means that 2018 is almost gone (where did the time go?). Tis the season then for good food, family, and cheer. It’s also the time to reflect on the previous year and prepare for what may come in the new year. Not to miss out, ShipCompliant by Sovos presented its annual End of Year Virtual Seminar on December 12, 2018. If you missed the original broadcast, it is available to see here.

But in case you’re not inclined to watch the recap, here are some highlights:


BevAlc Industry Regulatory Updates

Direct-to-Consumer. 2018 will be another banner year for direct-to-consumer (DtC) shipping by wineries, with sales easily breaking the $3 billion level. In October, Oklahoma opened up, leaving only a handful of states with no allowances for DtC shipping. While there have been some hiccups with Oklahoma — particularly with regards to the use of fulfillment houses in facilitating shipping by licensees — we have high hopes for the state going forward. Valiant efforts were also made this year to open up Alabama and Delaware, which unfortunately fell a bit short. But we expect the campaign to continue in 2019, with even better results this time.

Craft Beverage Modernization & Tax Reform Act. At the end of 2017, Congress passed a major tax overhaul, which included provisions for beverage alcohol suppliers, drastically reducing their federal tax burdens. These provisions kicked into effect in 2018, though there was plenty of uncertainty as to how they would be applied, leaving the Trade & Tax Bureau (TTB) with lots of work to explain the nuances of the bill. If you’ve been taking advantage of this tax benefit, make sure you’re following the latest from the TTB on how to administer the taxes, and make sure to let your representatives in Congress know you need them to renew the tax cuts after December 31, 2019!

Tariffs. Earlier this year, the Trump Administration put various protectionist measures into effect. These included tariffs on aluminum and steel, and on a wide swath of goods coming from China. These import tariffs have impacted beverage alcohol suppliers, as they raise the price of materials necessary for the industry (especially with aluminum cans becoming more common in both beer and wine). In response, many countries have imposed their own tariffs on American goods, including wine and bourbon, leading to increased problems for American producers as they attempt to expand their export business.

Tennessee Wine & Spirits Retailers Ass’n and the case for retailers making DtC shipments. At the end of 2017, we published a series of blog posts discussing the current state of retailers making interstate DtC shipments of alcohol (on a change to Missouri’s rules, an overview of other states’ rules, and a broader review of the legal ramifications). That timing turned out to be rather prescient, as 2018 saw a slew of new lawsuits and efforts to expand that right. Cases out of Missouri, Michigan, and Illinois produced inconsistent results, with some courts finding it discriminatory to allow in-state retailers to make DtC shipments, and others finding that a legitimate use of a state’s 21st Amendment rights.

However, these cases have been put on hold until the Supreme Court rules on Tennessee Wine & Spirits Retailers Ass’n v. Blair. While that case is immediately about Tennessee’s 2-year residency requirement for applicants of off-premises liquor package licenses, it presents an opportunity for the Supreme Court to expand its 2005 Granholm ruling to retailers (meaning states would have less right to have rules in place that discriminate against out-of-state parties), or to shut the door on that line of thought. Since Granholm enabled the current state of DtC shipping for wineries that we all enjoy today, it’s needless to say that we are paying very close attention to this case and will providing our views when the Court hears oral arguments on January 16, 2019.


ShipCompliant by Sovos Product Updates

As valuable as it is to keep up with regulatory updates, it’s also moot unless our compliance and reporting system is also updated. And in 2018, we put considerable resources into improving ShipCompliant’s functionality, particularly regarding our state registrations and overall system performance.

We have invested a lot of time and resources into the performance of our platform and have seen huge improvements. We focused on order imports, report downloads, and registration generation time as these are the critical tasks of your business during busy times. Our January projections for the average time for system functions are:

We were also excited to reveal more about a planned, upcoming facelift for ShipCompliant, and about our vision for the One Sovos platform, which will incorporate more of the tools and functions that makes Sovos a world leader in business-to-government compliance management into a single system. We were thrilled to share screenshots from our MarketReady registration tool, a prototype that our team is currently developing against, and to share with you our plan for the future of the ShipCompliant platform.

Our changes for registrations were spurred by the feedback that you, our trusted users, provided to us. We value your input and hope you see the changes to our registrations that you requested. If you have not yet commented on registrations, and have a chance, please take the time to fill out the user survey in your ShipCompliant account. 

Of course, we also want to thank you all for your feedback and collaboration through the year that has helped us make our product even more easy to use, accurate, and scalable.


End of Year Tips

As ever with our end-of-year reviews, we want to provide our users with some helpful tips so they can effectively navigate the very busy January filing period. January, after all, is when all annual (and quarterly, and monthly, and semi-annual) returns come due. For a winery making DtC shipments into every state available, that can mean over 100 separate returns in just one month.

So, to make things a bit easier come the new year, here are some steps you can take today:

At ShipCompliant by Sovos, our aim is to enable you to take control of your own compliance. We partner with you in compliance by providing regulatory updates, automated reporting, accurate tax rates. This approach lets you control your compliance needs and manage your own compliance practices, based on the services we provide. This has been our winning solution for nearly two decades.

As we look forward to the years — and decades — ahead, with us continuing to enable your compliance solutions, we want to extend our deepest appreciation to everyone for your support and continued engagement with the ShipCompliant team as we’ve grown and developed.

Happy holidays, and cheers to a wonderful New Year!


Find out how ShipCompliant by Sovos can help your business stay on top of compliance by signing up for a free demo.