W. Va. Code R. § 175-4-9 - Direct Shipment of Wine

9.1. Direct Shipper requirements. Before sending any shipment of wine to an adult resident of West Virginia who is 21 years of age or older for his or her personal use and consumption and not for resale, the direct shipper must meet the direct shipper licensing requirements as specified in W. Va. Code § 60-8-1 et seq. The direct shipper shall provide:

9.1.1. File a license application with the Commissioner accompanied by the appropriate background check information, using forms provided by the Commissioner and available at his offices. A criminal background check will not be required of applicants licensed in its state of domicile who can provide a certificate of good standing from its state of domicile;

9.1.2. Pay to the Commissioner the license fee specified in this section;

9.1.3. Obtain a business registration number from the Tax Commissioner;

9.1.4. Register with the office of the Secretary of State, if a corporation or LLC;

9.1.5. Provide the Commissioner a true copy of its current alcoholic beverage license proving the capacity in which the direct shipper is licensed in its domicile state;

9.1.6. Satisfy all other licensing requirements of the W. Va. Code, this rule and provide any other information that the Commissioner may reasonably require; and

9.1.7. Obtain from the Commissioner a direct shipper's license.

9.2. After licensure the direct shipper shall:

9.2.1. Submit to the Commissioner a list of all brands of wine and all associated labels of said wine brands to be shipped to West Virginia residents; and

9.2.2. If the wine brands are not registered with the Commissioner, then the direct shipper shall submit the wine brands and corresponding labels for review and registration with the Commissioner and pay all fees to the Commissioner in accordance with this rule;

9.2.3. Ensure that all containers of wine shipped directly to a resident in this state are clearly and conspicuously labeled with the words:

"CONTAINS ALCOHOL: SIGNATURE OF PERSON 21 OR OLDER REQUIRED FOR DELIVERY" and "NO DELIVERY TO ANY PERSON INTOXICATED OR PHYSI-CALLY INCAPACITATED DUE TO THE CONSUMP-TION OF NONINTOXI-CATING BEER, AND WINE OR ALCOHOLIC LIQUORS OR THE USE OF DRUGS";

9.2.4. Require every direct shipper or the common carrier to verify, by checking proper identification, that the recipient of a wine shipment in West Virginia is at least 21 years of age or older and if the carrier is not able to obtain a signature of a verified adult resident at least 21 years of age or older, the carrier may not complete the delivery of the wine shipment;

9.2.5. Obtain and keep a record of all written or electronic signatures upon delivery of wine to an adult West Virginia resident;

9.2.6. File monthly returns with the Commissioner and the Tax Commissioner showing the total of wines, by type, sold, and shipped into West Virginia for the preceding month;

9.2.7. Pay to the Tax Commissioner, with the monthly return all sales taxes, municipal taxes and the liter tax due on wine sales and shipments to adult West Virginia residents in the preceding month. The amount of such taxes paid shall be calculated as the sales were made in West Virginia at the location where delivery is made, in the form prescribed by the Commissioner and available at his offices;

9.2.8. Permit the Tax Commissioner or Commissioner or their designees to perform an audit of the direct shipper's records upon request;

9.2.9. Be deemed to have consented to the jurisdiction of the commissioner or any other state agency, the Intermediate Court of Appeals as set forth in W. Va. Code § 51-11-4(a)(4), concerning enforcement of W. Va. Code § 60-8-1 et seq., and any other related laws, or rules;

9.2.10. Provide proof or records to the commissioner, upon request, that all direct shipments of wine were purchased and delivered to an adult resident of West Virginia over the age of 21 years of age;

9.2.11. Be subject to enforcement proceedings to suspend or revoke a direct shipper's license for violations of State laws, code, rules, or regulations, however the Commissioner may accept payment of a penalty or an offer in compromise in lieu of suspension, at the Commissioner's discretion;

9.2.12. Ship all wine into West Virginia by licensed direct shippers and the direct shipper must be a licensed and bonded shipping carrier or utilize a licensed and bonded shipping carrier, and further the direct shipper and any such carrier must maintain records of each shipment for up to three years;

9.2.13. Be subject to the penalties available to the Commissioner under West Virginia Code § 60-8-18 for failure of a direct shipper or such licensee's carrier to abide by the provisions of W. Va. Code § 60-1-1 et seq., and the rules;

9.2.14. Blood alcohol chart. -- Shall place within each shipment a copy of the West Virginia blood alcohol chart in the form prescribed by W. Va. Code § 60-6-24 and available at the Commissioner's offices;

9.2.15. Fetal alcohol syndrome chart. -- Shall place within each shipment a copy of the West Virginia fetal alcohol syndrome chart in the form prescribed by W. Va. Code § 60-6-24 and available at the Commissioner's office; and

9.2.16. Human trafficking notice -- Each direct shipper shall place within each shipment a copy of the human trafficking notice in the form prescribed by W. Va. Code §15A-2-5.

9.2.17. Any other information that the Commissioner may reasonably require.

9.3. A licensed direct shipper may not:

9.3.1. Ship more than two cases of wine per month to any adult West Virginia resident who is 21 years of age or older. Note that a case is defined as any combination of packages containing not more than nine liters of wine;

9.3.2. Ship to any address in an area identified by the Commissioner as a "dry" or local option area. The Commissioner shall maintain a list of dry market area zip codes available at his offices;

9.3.3. Ship to any licensed suppliers, distributors, retailers, private wine bed and breakfasts, private wine restaurants, private wine spas, or wine specialty shops;

9.3.4. Ship wine from overseas or internationally unless it is first shipped to a licensed supplier or distributor;

9.4. Direct shipper application and fee.

9.4.1. Licensure application; form. -- The application form for licensure as a direct shipper is available and on file at the Commissioner's offices.

9.4.2. License application; content. -- The application for licensure shall elicit the following information:

9.4.2.a. The name of the applicant, including his or her trade name, if any, his or her address and the length of his or her residence at that address;

9.4.2.b. The address of the place of business for which the license is desired, or other description that definitely locates the place of business;

9.4.2.c. Proof that the place of business conforms to all health and fire laws, rules, and regulations applicable to such place;

9.4.2.d. The name of the owner of the premises upon which the business is to be conducted and, if the owner is not the applicant, proof that the applicant is the bona fide lessee of the business;

9.4.2.e. If the applicant is a retailer, whether the applicant is the proprietor or owner of a bona fide grocery store, retailer, private wine bed and breakfast, private wine restaurant, private wine spa, or wine specialty shop;

9.4.2.f. Whether the applicant intends to carry on the business authorized by the license for himself or herself or under his or her immediate supervision or direction;

9.4.2.g. Proof that the applicant is a citizen of the United States;

9.4.2.h. Whether the applicant is an actual bona fide resident of his or her domicile state;

9.4.2.i. That the applicant is at least 18 years of age;

9.4.2.j. Whether the applicant has been convicted of a felony or other crime involving moral turpitude within the three years next preceding the filing of the application;

9.4.2.k. Whether the applicant has within the two years next preceding the filing of the application, been convicted of violating the liquor laws of any state or of the United States; and

9.4.2.l. Whether the applicant has not during the five years next preceding the date of the application had any license revoked under this chapter or under the liquor laws of any other state;

9.4.3. An applicant is a firm, association, or partnership, shall provide information required in subsections 9.4.b.7., 9.4.b.8., 9.4.b.9., 9.4.b.10., and 9.4.b.11., for each of the members thereof, and each of said members must satisfy all the requirements in the subsections;

9.4.4. An applicant who is a corporation, organized, or authorized to do business in this state shall provide the information required in subsections 9.4.b.7., 9.4.b.8., 9.4.b.9., 9.4.b.10., 9.4.b.11., and 9.4.b.12., for each of the officers and directors thereof to any stockholder owning 20% or more of the stock of such corporation and for the persons who conduct and manage the licensed premises for the corporation;

9.4.5. The application shall be verified by the owner or if the applicant is a firm, partnership, or corporation by each member of the firm, each partner, if a partnership, each member of the governing board, if an association, or each corporate officer and director. However, the application of a corporation applying for a retailer's license need be verified only by its president or vice president; and

9.4.6. Each of said individuals must meet all the requirements provided in those subdivisions except that the requirements as to citizenship and residence shall not apply to the officers, directors, and stockholders of a corporation applying for a retailer's license.

9.4.7. The foregoing statements required in a completed application shall constitute mandatory prerequisites for the issuance of a license;

9.5. License fee. The direct shipper annual license fee is:

9.5.1. $150 for a license to ship and sell only wine. If the application is filed at any time from July 1 through December 31, such fee shall be the full annual fee, but if the application is filed at any time from January 1 through June 30, the fee for the remainder of the license year is one half (1/2) of the annual fee, or $75 for the direct shipper's license;

9.5.2. $250 for a license to ship and sell wine and nonfortified dessert wine, port, sherry, or Madeira wines. If the application is filed at any time from July 1 through December 31, the fee shall be the full annual fee, but if the application is filed at any time from January 1 through June 30, the fee for the remainder of the license year is one half (1/2) of the annual fee, or $125 for the direct shipper's license; or

9.5.3. $350 for a licensed multi capacity winery or farm winery license which includes all direct shipping licenses.

9.6. A direct shipper may renew its license annually by submitting a renewal application to the Commissioner, paying the direct shipper license fee, providing the Commissioner with a true copy of a current alcoholic beverage license from the direct shipper's domicile state, and by providing any other information requested by the Commissioner.

9.6.1. Any licensee that fails to complete a renewal application and to make payment of its annual license fee to renew its license on or before June 30 of any year, after initial application, shall be charged an additional $150 reactivation fee. The licensee must pay the applicable operational fee, full-year annual license fee, and the reactivation fee prior to the processing of any renewal application. Any licensee who continues to operate upon the expiration of its license is subject to all fines, penalties, and sanctions available in W. Va. Code § 60-8-1 et seq., as determined by the commissioner.

9.7. Licensure application; signature and acknowledgement required. - Every application shall be signed by the applicant, made under oath and acknowledged or verified.

9.7.1. In the case of a partnership the application shall be signed by each of the partners.

9.7.2. In the case of a limited partnership, the application shall be signed by each of the general partners and by each limited partner who owns 20% or more of the capital or profits of such limited partnership.

9.7.3. In the case of a voluntary association, each member of the governing board shall sign the application.

9.7.4. In the case of a corporation, the application the president or vice president shall sign the application.

9.8. Corporate charter, partnership agreement, or association bylaws required. - A corporation applying for licensure as a direct shipper shall furnish with its application a copy of its corporate charter, including any amendments thereto. A partnership, limited partnership, or association, applying for licensure as a direct shipper shall provide a copy of the partnership agreement or of the association's bylaws.

9.9. Investigations. -- Upon receipt of a direct shipper license application and the license fee, bond, and other documents required to be provided with the application, the Commissioner shall make a thorough investigation to determine, among other things, whether the applicant and any locations and premises to be operated by the applicant qualify for licensure and shall investigate all matters connected therewith, including, but not limited to, whether granting the license will adversely affect the public welfare, health, and morals.

9.10. Refusal of license. -- No license may be issued to any applicant who;

9.10.1. Submits an application for licensure that containing any false statement;

9.10.2. Is affirmatively shown to be not a suitable person in the community or communities in which it operates or will operate. The Commissioner may refuse to grant any license if he or she has reasonable cause to believe that the applicant, any partner or member thereof, or corporate applicant, officer, director, or manager for the applicant or any shareholder owning 20% or more of its capital stock, or other person conducting or managing the affairs of the applicant or of the proposed licensed premises, in whole or in part:

9.10.2.a. Is not 21 years of age or older;

9.10.2.b. Has been convicted of a felony or other crime involving moral turpitude within three (3) years next preceding the filing date of the application;

9.10.2.c. Has been convicted of violating the liquor laws of any state or the United States within two (2) years next preceding the filing date of the application;

9.10.2.d. Has had any license revoked under the liquor laws of any state or the United States within five (5) years next preceding the filing date of the application;

9.10.2.e. Is not a person of good moral character or repute;

9.10.2.f. Is not the legitimate owner of the business proposed to be licensed, or other persons have ownership interests in the business which have not been disclosed;

9.10.2.g. Does not possess or has not demonstrated sufficient financial responsibility to adequately satisfy the requirements of the business proposed to be licensed;

9.10.2.h. Has maintained a noisy, loud, disorderly, or unsanitary establishment;

9.10.2.i. Has demonstrated, either by his or her police record or by his or her record as a former licensee under W. Va. Code § 60-1-1 et seq., a lack of respect for law and order;

9.10.2.j. May not be sold alcoholic beverages pursuant to W. Va. Code § 60-1-1 et seq.;

9.10.2.k. Has the general reputation of drinking alcoholic beverages to excess, or is addicted to the use of alcohol or narcotics;

9.10.2.l. Is physically unable to carry on the business or has been adjudicated an incompetent; or

9.10.2.m. Is an officer or employee of the Commissioner;

9.10.c. Fails to satisfy the requirements of this rule, the liquor laws, rules, or the regulations of this state, the applicant's domicile state and the United States.

9.11. License not transferable.

9.11.1. A license issued to a direct shipper is valid only for the person, firm, or corporation named thereon and only for the premises for which the license was sought and issued. The license is not transferable. To the extent there is a change in beneficial ownership of 20% or less thereof, the Commissioner shall be notified in writing within 10 days before the transfer. If there is a change in the beneficial ownership in excess of 20%, then the license shall be voided and the licensee must make application for a new license.

9.11.2. If there is any transfer in the beneficial ownership of any interest in a direct shipper, the new owner of the beneficial interest must satisfy all of the requirements of any and all laws of the United States and any rules and regulations promulgated pursuant thereto, and of the laws of the state, including, but not limited to, the provisions of W. Va. Code § 60-1-1 et seq., and of the rules promulgated pursuant thereof.

9.12. Change of location. -- Any direct shipper who desires or intends to change the location of the premises for which the license was issued prior to the renewal of the license shall notify the Commissioner in writing at least 30 days next preceding the date of the relocation. In the event of flood or fire, the Commissioner may waive the 30 day notice upon request of the affected licensee.

9.13. Connection between direct shipper prohibited. - If a licensed retailer, private club type, private wine bed and breakfast, private wine restaurant, or private wine spa applicant is located within the same building or structure as a licensed direct shipper, there shall be no internal interconnection or door between the premises of the licensed retailer, private club type, private wine bed and breakfast, private wine restaurant, or private wine spa and the premises of the direct shipper. No person may be simultaneously employed by a direct shipper, distributor, private wine bed and breakfast, private wine restaurant, private wine spa, or private club type.

9.14. Transportation of wine by direct shipper. -- A direct shipper may not transport any wine unless the licensee has been issued a transportation permit by the Commissioner or utilizes a West Virginia licensed and bonded transporter or common carrier who has obtained a transportation permit as specified in this subsection.

9.15. Direct shipper records, inspection.

9.15.1. Every direct shipper shall maintain records of all sales, shipments and deliveries, including invoices, records, receipts, bills of lading, taxes paid to the State of West Virginia and other pertinent papers required by the Commissioner.

9.15.2. The licensed direct shipper shall preserve all records for at least two years.

9.15.3. The Tax Commissioner or the Commissioner, or both, may inspect the books, accounts, and records of any licensee and examine, under oath, any officer, agent, or employee of any licensee or any person engaged in the business of selling, shipping, or delivering wine to a distributor.

9.15.4. The Tax Commissioner or the Commissioner, or both, may require the production, within this state at the time and place the Tax Commissioner or the Commissioner, or both, of any books, accounts, papers or records kept within or without the State, or verified copies in lieu thereof, for examination by the Tax Commissioner, the Commissioner or their duly designated agents.

9.16. Monthly report of direct shipper; form; content.

9.16.1. Direct shippers shall file to the Tax Commissioner and the Commissioner a properly completed monthly report for all purchases and shipments of wine, nonfortified dessert wine, port, sherry, or Madeira wines sent to West Virginia adult residents for personal use and consumption, and not for resale. The report shall be filed before the 16th day of the month next succeeding the month for which the report is made on the Direct Shipper's Report of Wine Sales & Taxes on Shipments into West Virginia form, provided by the Commissioner and available at www.abca.wv.gov.

9.16.2. The monthly report shall contain the following information:

9.16.2.a. The name and address of the direct shipper;

9.16.2.b. The month for which the report is being made;

9.16.2.c. The names and addresses of all West Virginia adults to whom the direct shipper shipped, wine, nonfortified dessert wine, port, sherry, or Madeira wines. The names and addresses of the common carrier used to ship the wine, nonfortified dessert wine, port, sherry, or Madeira wines;

9.16.2.d. The total number of liters sold and shipped by such direct shipper;

9.16.2.e. The identity and business phone number of the person preparing the report on behalf of the direct shipper;

9.16.2.f. The total amount of the invoice for the wine, nonfortified dessert wine, port, sherry, or Madeira wines shipped.; and

9.16.2.g. Such other information as the Commissioner or Tax Commissioner requires.

9.16.3. All monthly reports shall be considered tax returns pursuant to W. Va. Code § 11-10-1 et seq.

9.16.4. Each monthly report must be filed in duplicate with the Tax commissioner and the Commissioner. Failure to timely file the monthly reports within five calendar days after the 16th day of the month will subject the direct shipper to penalties under W. Va. Code § 60-8-18.

9.16.5. Every licensed direct shippers must collect and remit to the Tax Commissioner all taxes, sales taxes, municipal taxes and the liter tax due to West Virginia at the close of each month with the direct shipper's monthly report reflecting the taxes paid for all sales and shipments to West Virginia adult residents who are 21 years of age or older.

9.17. Invoices required; content. -- One copy of each invoice for every sale and shipment made to adult West Virginia residents for personal use and consumption, and not for resale. The invoice shall identify the resident to whom sales and shipments of wine, nonfortified dessert wine, port, sherry, or Madeira wines were made, the resident's address, the total invoice cost, the items sold by label identification, the quantity stated in liters, and the alcohol content of each item sold.

9.18. Direct shipping and transportation.

9.18.1. A direct shipper may not ship more than two (2) cases of wine, nonfortified dessert wine, port, sherry, or Madeira wines to an adult West Virginia resident consumer, who is 21 years of age or over, for such resident's personal use and consumption and not for resale, per month.

9.18.2. All transportation of wine, nonfortified dessert wine, port, sherry, or Madeira wines by or on behalf of a direct shipper must be by a bonded and licensed common carrier. A direct shipper may also be a bonded and licensed common carrier.

9.18.3. A direct shipper or bonded and licensed common carrier must obtain a transportation permit from the Commissioner in order to transport wine into or within West Virginia.

9.18.4. Upon delivery a direct shipper or bonded and licensed common carrier must obtain the written or electronic signature of the adult West Virginia resident who is 21 years of age or over, who ordered the wine, nonfortified dessert wine, port, sherry, or Madeira wines. The common carrier shall verify the age of the person who ordered by checking the proper identification.

9.18.5. A direct shipper or bonded and licensed common carrier may not leave direct shipments of wine, nonfortified dessert wine, port, sherry, or Madeira wines at the West Virginia address for the person who ordered without the direct shipper or common carrier having first checking the person's identification and verifying the person's signature who ordered the wine, nonfortified dessert wine, port, sherry or Madeira wines and that the person who ordered is 21 years of age or over.

9.18.6. Failure of a direct shipper or its common carrier to satisfy the requirements of this rule and the W. Va. code subjects the direct shipper and common carrier to penalties under W. Va. Code § 60-8-18.

9.19. Unlawful direct shipping.

9.19.1. No person may ship wine, nonfortified dessert wine, port, sherry, or Madeira wines directly to consumers in West Virginia without a direct shipper's license or any other permit or license from the Commissioner.

9.19.2. No person may ship wine, nonfortified dessert wine, port, sherry, or Madeira wines directly to licensed retailers, private club types, private wine bed and breakfasts, private wine restaurants, and private wine spas in West Virginia.

9.19.3. Any person who knowingly makes, participates in, transports, imports, or receives such an unlicensed and unauthorized direct shipment of wine, nonfortified dessert wine, port, sherry, or Madeira wines is guilty of a felony and shall upon conviction thereof, be fined in an amount not to $10,000 per violation or shall be imprisoned in jail for a period not to exceed 72 hours.

9.19.4. Without limitation on any punishment or remedy, criminal or civil, any person who knowingly makes, participates in, transports, imports, or receives such a direct shipment of wine, nonfortified dessert wine, port, sherry, or Madeira wines constitutes an act that is an unfair trade practice.

Notes

W. Va. Code R. § 175-4-9