Kentucky’s new law allowing breweries, distilleries and wineries to ship direct to consumers all over the U.S. should be the model for the country. But special interests that want to keep consumers paying more for alcohol and limit choice to protect their fiefdoms will try to stop people from achieving this freedom.

Kentucky HB 415 became law last week following passage by the Kentucky General Assembly a few weeks back. The new law effectuates direct-to-consumer shipping from alcohol producers through shipping resulting in direct delivery to consumers. 

ASIDE ON SHIPPING AND DELIVERY: Shipping is the act of sending something to someone and delivery is what happens when it arrives. Delivery is the end result of shipping – the two are not mutually exclusive or separate or distinct methods of transportation – as some poorly crafted state laws (not this KY one, btw) are drafted to suggest. END ASIDE

The new alcohol shipping direct to consumer law has several key features:

• The law allows Kentucky based distilleries, breweries, and wineries to ship products to Kentuckians and other states if those states have reciprocal laws that allow products from out-of-state manufacturers to be shipped direct to its residents.
• The law allows out-of-state alcohol producers to ship direct to Kentucky consumers if their state laws permit them to ship.
• The alcohol must be shipped from the producer’s licensed premises.
• The quantities are limited: 
  • 10 liters of distilled spirits, per consumer, per month
  • 10 cases of wine, per consumer, per month
  • 10 cases of beer, per consumer, per month
• Recordkeeping requirements include the purchase price, name and location of consumer, taxes charged and quantity information.
• In order to obtain a license, the alcohol producer will have to: 
  • Appoint and maintain an agent of service with the Kentucky Secretary of State’s office.
  • Maintain all records of shipments.
  • Allow the Kentucky ABC and Department of Revenue to perform audits of records and inspections of a licensee’s licensed premises (upon request).
  • Submit to the jurisdiction of the Kentucky ABC and Department of Revenue, the courts, and all other enforcement authorities in Kentucky.
  • Hold a shipper license contingent on obeying all the laws and regulations of both the origin state and the shipping destination state, including those related to times, days and circumstances of when alcoholic beverages may be sold or shipped.
  • Be subject to fines and penalties, or license suspension/revocation, for violating duties or obligations of a licensee.
  • Producers who hold a direct shipper license may ship products through transactions that take place electronically, online, by mail, or in-person at the producer’s location.
  • A producer must verify that a consumer purchasing alcoholic beverages for shipping is of lawful drinking age. A valid identification document must be an unexpired, government-issued form of identification that contains the photograph and date of birth.
  • A producer may not sell or ship alcoholic beverages to a consumer in a dry territory. However, it is a violation by the consumer who purchases the alcoholic beverages and intentionally ships the product to an unlawful address. That consumer is subject to a $250 fine for the first offense and $500 fine for subsequent offenses.
• A common carrier may not leave a package at a consumer’s location without first inspecting a valid identification document verifying the recipient of the delivery is at least 21 years old, and requiring a signature of the recipient.
• All shipments must be labeled : “CONTAINS ALCOHOL: SIGNATURE OF PERSON AGE 21 OR OLDER REQUIRED FOR DELIVERY.”

For those of you wondering about taxes – don’t. The bill handily addresses the taxation issues that many try to utilize as an argument that “*gosh* it’s just too hard to figure this out” – it isn’t and people and industries making that argument are looking to stick it to you as a consumer. 

• When the shipment is from KY to another state, no KY taxes are paid, and the KY producer must collect all sales, excise and license taxes that are levied by the destination state and remit them to that state.
• When the Shipment is from another state to KY consumer, the out-of-state alcohol producer collects and pays KY’s excise, sales and municipal taxes on shipments to KY consumers and remits them. (Including KY’s wholesale tax.)
• When the shipment is from KY to KY, the KY brewery, winery, or distillery collects the KY taxes.
• All the taxes are separately identified on the customer’s invoice.
• KY’s alcohol beverage control authority is responsible for maintaining a list of municipal taxes and regulatory fees that out-of-state producers reference to determine the taxes they must charge.

The law should take effect around July which means that other states should get cracking on passing reciprocal laws – producer organization and guilds around the country should press their states to join in with Kentucky, Alaska, Arizona, Connecticut, Hawaii, Kentucky, Nebraska,

Nevada, New Hampshire, North Dakota, Rhode Island and Washington, D.C. in this endeavor to improve the quality of life for beer and spirits (wine already enjoys these rights in just about 45 states) lovers. If that’s not good enough, then just ask that beer and spirits get the same treatment as wine.

For those of you interested, here’s the full new law: