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Selling contract produced spirits to NY based client

Lassiter Distilling Co

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We are considering taking on a contract for a client based in New York. Clearly, we can't sell this volume of spirits to someone who doesn't have a federal wholesaler's permit, and we'll probably need some sort of out of state shipper's permit to ship to NY. What I'm not sure about and can't seem to get a clear answer from the state is whether our client needs to have a NY distributor's license, or if the wholesaler's permit is sufficient for us to sell their contracted filled bottles to them. Does anyone have experience in this area or advice you can share? 


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  • 2 weeks later...

I see no responses to this from people who know.  You do not say what use the person to whom you wish to sell will put the spirits you bottle for them.  From your question, I assume that the person with whom you would contract wants to offer the spirits for sale at wholesale to retailers.  That does indeed trigger the customers need for a federal basic permit as a wholesaler, because they are purchasing for resale at wholesale.  If, however, the customer is a retailer, for whom you bottle a private label,  say Joe's Bar and Grill and you  bottle spirits, under the bottling trade name, Joe's Bar Spirits Company, for sale at retail only, by Joe's Bar and Grill, Joe would not be required to have a wholesale basic permit because Joe is not purchasing for resale at wholesale.  That is the federal law.

Now, in general, states do not allow anyone to bring spirits into the state - the term used is often import - unless  the person holds some sort of permit or license that allows them to do so.  Why?  Because the state wants to ensure tax collection, etc.  Ditto for requiring a license or permit for the person who ships into the state and they require that such persons make periodic reports to the state of what was shipped into the state and to whom it was shipped.  That is a the basic framework and it gets fleshed out in different ways.  How it gets fleshed out is state specific and often is also product specific, i.e. the rules that apply to interstate shipments of wine are likely to be far more lenient than the rules that apply to the interstate shipment of spirits.

Some states also have prohibitions against private labels, but that, I think, has been a passing prohibition, as private label business has grown in all sectors of the food and beverage market.  Washington, for example, allows private labels, but only if the private label product is available for purchase by all retailers within the state.  

Now, that general statement gives you some terms that you can use to search the internet for answers or use when you ask questions of the state.  For example, a search for the string "New York, import, distilled spirits" yields a link to the State's Department of Taxaction, https://www.tax.ny.gov/pubs_and_bulls/tg_bulletins/abt/do_i_have_to_register.htm, which informs you that, "If you’re a distributor of alcoholic beverages (beer, wine, or liquor), you must register with the Tax Department" and that you’re a distributor if you "iimport (or cause to be imported) liquors into New York State for sale or use for any purpose."   The emphasis is in the original.  The site than says, as you scroll down the page, that you must makle application to register, which is obvious, I assume, and adds that the applicaiton will not be approved unless you have a license issued by the the State Liquor Authority. I keep the font size because  it is a hyperlink.  

So, if a person im,ports for any purpose the person must  register with the the DOR, to register the person must make application, and the application won't be approved unless the person has a license issued by the NY State Liquor Authority.  That tells us that the federal permit is not sufficient.  Follow the link and see what happens next.  I'm not going down that rabbit hole this morning :-).

I'll add one final bit of general advice.  If you want to ask any regulatory agency a question, first try to find the answer yourself.  If you can't kind it, ask, and if you can find it, ask anyway.  You want to ask because you can misunderstand what the source you found is trying to say; but you want to know the answer already, if you can find it, because then you will have a better idea of how to formulate/frame your question and also, whether they answer you are getting from the person with whom you are speaking is B.S.  That does happen.  


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