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Distillery in One State; Doing Business Elsewhere


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Hello All! I am going to be running a contract run out of an associates distillery. Now my big question is if I am going to be selling the spirits in another state outside of the state of production, are there any snafu's? Also if I wanted to sell on a military base does anyone know about that process? Thanks!!

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If you are having someone contract to produce spirits for you, which you are going to sell at wholesale (i.e, you sell to other wholesalers or to retailers), then you will have to have a federal basic permit as a wholesale liquor dealer, without regard to whether you sell in the state of production or some other state.

Next, for reasons of state taxation, there is no state that will allow someone to ship spirits into that state without some sort of licensing scheme. The schemes can vary, but someone within the state where the sales takes place will have to be licensed by the state to "import" spirits into the state and be responsible for paying taxes and labels, if the state has a labeling law. If you are the person responsible for bring them into the state, then you will have to be licensed by the state. If you are selling them to someone in the state that has a state license to import, then it is likely that you, as the person shipping into the state, will need to be licenses by the state, even if you have no presence in the state. You lso need to consider the need for "agents" licenses. But don't ask for advice about any of this here. Go directly to the state and let them tell you what they require. That is the way to stay out of trouble you do not need, especially if you are considering opening a distillery at some future date. You do not want to have been charged with a violation of state laws having to do with the illegal shipment of alcohol.

Finally, you cannot use an associates DSP to produce spirits. The associate will have to produce the spirits, keep the records, pay the taxes, get the label approvals, etc. I think that you may know this, but the proper way to describe what must happen is that you are going to contract with a distilled spirits plant to have that distilled spirits plant produce spirits for you in return for a payment you make to them to buy the spirits from them. YOU are not going to use the distillery; the proprietor is.

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