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While patience is a long standing member of the virtue list, it’s not always easy. But a little patience goes a long way when dealing with regulatory compliance matters like certificate of label approvals (COLAs). The Alcohol and Tobacco Tax and Trade Bureau (TTB) began accepting COLA applications online several years ago, which reduced the processing time for new COLA applications to just a few days. In their ongoing efforts to streamline their processes for industry members, the TTB began accepting formulas and permit applications online as well. More recently, the TTB announced a streamlined approval process along with the end of expedited review (previously discussed here and here). Notwithstanding these efforts, the volume of COLA applications has continued to swell with processing times becoming progressively longer. To help people estimate their wait time the TTB is now providing average COLA processing times through its website (the information is in a chart on the upper right hand side of the page) or by phone (dial 1-866-927-2533, press 4 for malt beverages and distilled spirits labels and 6 for wine labels). Given government budgets cuts and increases in label approval applications, it seems likely that the days of getting labels approved in four or five days are not likely to return.  The federal labeling regulations allow the TTB to take up to 90 days to approve a COLA application. 27 C.F.R. § 13.21(b) (2011). Processing times currently are much shorter than that, but industry members should plan accordingly and allow at least 30 days for label approval through COLAs Online.  The attorneys are Strike & Techel are available if you need assistance with TTB regulatory matters, including COLAs.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2010-2011 · All Rights Reserved ·

Earlier this week, California legislators passed a law that requires large internet retailers to collect sales tax for orders placed from California customers.  Most of the publicity surrounding the bill has been on large internet retailers like Amazon.com and Overstock.com, which have strongly opposed the law, and are now beginning the process of limiting their presence in California in order to avoid needing to charge sales tax on California purchases.  However, the law is not limited to these major retailers, as it stands to affect consumers who order alcohol online as well as out-of-state alcohol retailers who do substantial business in the state.

Two primary factors will most impact whether an alcohol retailer and its consumers will be affected by the new law.  First, the law is aimed at large retailers, and only applies only to businesses that have sales within California in excess of $500,000 over the previous 12 months.  This likely means that orders from small wineries would remain untaxed, while large internet retailers will probably need to start charging sales tax to California consumers.

Second, the law applies only to retailers that have a “substantial nexus” in California.  The precise meaning of this term has already been the source of considerable confusion, and large retailers like Amazon.com have begun breaking ties with California-based affiliates and entities that provide “click-throughs” to their site, so that they are not affected by the law.  How this provision affects out-of-state alcohol retailers remains unclear.  Retailers that are definitely subject to the law are those with a place of business in California, including an office, place of distribution, sales room, or warehouse.  Also, retailers with representatives or salespeople in California will be subject to the law.  What remains unknown is whether retailers without any such contacts will be required to collect sales tax on shipments into the state.  Stay tuned.

California’s new law went into effect on July 1, 2011, and is codified at Cal. Rev. & Tax Code § 6203.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2010-2011 · All Rights Reserved ·

Starting a wine bar, or any other type of alcoholic beverage business, is more complicated that starting most businesses in California. There are dozens of different kinds of alcoholic beverage licenses, entity formation and ownership issues, key notification requirements and what can feel like a million other boxes to check. Sometimes, all the ABC regulations become so overwhelming that people forget about the basics—like making sure there are no zoning or planning restrictions that would prevent one from operating the planned business in the place one hopes to open. Like all companies, alcoholic beverage businesses are subject to local requirements. If a space is not zoned correctly, or the planned use is not allowed in the space, the problem will take time and money to fix, if it can even be fixed at all. In San Francisco, neighborhoods like the Mission, the Haight and North Beach have extra restrictions relevant to businesses that sell alcohol. To avoid a dilemma, it’s best to ensure that the initial business plan includes an analysis of this issue before a lease is secured.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2010-2011 · All Rights Reserved ·