An Act to establish a distilled spirits direct shipment license and distilled spirits carrier license to enable the direct shipments of certain distilled spirits in South Dakota.
Be it enacted by the Legislature of the State of South Dakota:
Section 1. That a NEW SECTION be added:
35-13A-1. Definitions.
Terms used in Sections 1 to 17, inclusive, of this Act, mean:
(1) "Common carrier," a carrier that holds itself out to the general public as engaged in the business of transporting goods for a fee;
(2) "Distilled spirits carrier," a common carrier that has obtained a distilled spirits carrier license;
(3) "Distiller," a person that produces distilled spirits and holds a federal distilled spirits plant-beverage permit;
(4) "Department," the South Dakota Department of Revenue;
(5) "Direct shipper," a distiller that has obtained a distilled spirits direct shipper license;
(6) "Purchase price," the price of a product charged to the end consumer before the application of South Dakota state and local taxes.
Section 2. That a NEW SECTION be added:
35-13A-2. Distilled spirits direct shipper--License--Requirements--Fee.
Any distiller located within or outside of the state may obtain a distilled spirits direct shipper license. An applicant for an initial or renewed distilled spirits direct shipper license shall:
(1) File an application with the department on a form prescribed by the department;
(2) Pay a license fee of one hundred dollars;
(3) Submit a copy of the applicant's current federal distilled spirits plant permit;
(4) Register each brand label offered for sale in this state, if not previously registered, and pay all applicable brand registration fees pursuant to chapter 39-13;
(5) Hold a South Dakota sales and use tax license issued by the department; and
(6) Be current on the remittance of all applicable state and local taxes.
The department shall issue a distilled spirits direct shipper license to any applicant who meets the requirements of this Act. Any money collected pursuant to this section shall be deposited in the general fund.
Section 3. That a NEW SECTION be added:
35-13A-3. Distilled spirits carrier--License--Requirements--Fees.
Any common carrier may apply for a distilled spirits carrier license. An applicant for an initial or renewal distilled spirits carrier license shall:
(1) File an application with the department on a form prescribed by the department; and
(2) Pay a license fee of one hundred dollars.
The department shall issue a distilled spirits carrier license to any applicant who meets the requirements of this Act. Any money collected pursuant to this section shall be deposited in the general fund.
Section 4. That a NEW SECTION be added:
35-13A-4. Licenses--Duration--Fees.
Each distilled spirits direct shipper license and distilled spirits carrier license is valid from twelve o'clock midnight on the thirty-first day of December to twelve o'clock midnight on the thirty-first day of the next December. However, the license is valid for an additional three days if a proper application for a new license is in the possession of the department before midnight on the thirty-first day of December when the license expires. The full fee shall be charged for any license for a portion of the period.
Section 5. That a NEW SECTION be added:
35-13A-5. Distilled spirits--Registered for direct shipment--Requirements.
Notwithstanding any other provisions of title 35, a direct shipper licensed pursuant to this Act may sell and ship distilled spirits to any person in this state who is twenty-one years of age or older if the distilled spirits are registered for direct shipment as required pursuant to section 2 of this Act. Before shipping the distilled spirits, the direct shipper shall verify the age of the person placing the order by obtaining a copy of the person's valid age-bearing photo identification document issued by this state, another state, or the federal government, or by using an age verification service. The direct shipper shall record the name, address, date of birth, and telephone number of the person placing the order on the order form or other verifiable record. The direct shipper shall notify the person placing the order that the recipient of the shipment is required to show a valid age-bearing photo identification document issued by this state, another state, or the federal government upon delivery. No direct shipper may ship more than three cases of distilled spirits, containing no more than twelve bottles per case and no more than seven hundred fifty milliliters per bottle, in any calendar year to any person for personal use under this Act.
Section 6. That a NEW SECTION be added:
35-13A-6. Package labeling requirements--Penalty.
A direct shipper shall label each package to be shipped in accordance with the provisions of this Act so that it conspicuously contains words indicating the package contains alcohol and that the signature of a person twenty-one years of age or older is required for delivery. Any direct shipper who causes a direct shipment of distilled spirits in violation of the provisions of section 5 of this Act or this section is subject to a civil penalty of one thousand dollars for a first offense and two thousand dollars for a second or subsequent offense. Penalties may be imposed by the Department of Revenue. Any money collected pursuant to this section shall be deposited in the general fund.
Section 7. That a NEW SECTION be added:
35-13A-7. Carrier--Delivery of shipment--Requirements--Penalty.
Each shipment of distilled spirits made in accordance with this Act shall be delivered by a distilled spirits carrier and shall be accompanied by a shipping label that conforms to the requirements contained in section 6 of this Act. The distilled spirits carrier shall obtain the signature of a person twenty-one years of age or older prior to delivery of the shipment, and shall request that the person signing for the shipment display a valid age-bearing photo identification document issued by this state, another state, or the federal government verifying that the person is twenty-one years of age or older.
Any common carrier or distilled spirits carrier who delivers distilled spirits to a person under twenty-one years of age is subject to a civil penalty of one thousand dollars for a first offense and two thousand dollars for a second or subsequent offense. Any money collected by the department pursuant to this section shall be deposited in the general fund.
Section 8. That a NEW SECTION be added:
35-13A-8. Distilled spirits received--Limits--Resale prohibited--Penalty.
No person may receive more than three cases of distilled spirits, containing no more than twelve bottles per case and no more than seven hundred fifty milliliters per bottle, in any calendar year for personal use under this Act. No person who receives distilled spirits pursuant to the provisions of this Act may resell any of the distilled spirits. It is a Class 2 misdemeanor for any person to receive more than three cases of distilled spirits during a calendar year in violation of the provisions of this Act. It is a Class 1 misdemeanor for any person to resell or attempt to resell any distilled spirits obtained pursuant to the provisions of this Act.
Section 9. That a NEW SECTION be added:
35-13A-9. Production and shipment in accordance with federal permit--Penalty.
A direct shipper may only ship distilled spirits that were produced by the direct shipper in accordance with the direct shipper's federal distilled spirits plant permit. A violation of this section is a Class 2 misdemeanor.
Section 10. That a NEW SECTION be added:
35-13A-10. State jurisdiction--Audit of records.
A direct shipper is deemed to have consented to the jurisdiction of the department and the courts of the State of South Dakota with respect to the enforcement of the provisions of this Act. The direct shipper shall allow the department to perform an audit of the direct shipper's records, including any documents used to verify the age of any person ordering distilled spirits from the direct shipper and provide copies of any such records upon request.
Section 11. That a NEW SECTION be added:
35-13A-11. Direct shipper--Quarterly reports.
A direct shipper shall file quarterly reports with the department on or before the fifteenth day of the month following each quarterly period. The required quarterly report shall be filed even if no business was transacted in this state during the reporting period.
The report shall include:
(1) The business name, address, and direct shipper license number of the direct shipper;
(2) The total gallons of distilled spirits shipped to recipients in this state during the quarterly period;
(3) The name and address of shipment recipients in this state and the number of cases, or portions thereof, received per recipient during the quarterly period;
(4) The distilled spirits carrier or carriers used to deliver each shipment;
(5) The date, distilled spirits type, brand label, quantity, and purchase price of each shipment, along with any taxes paid by the purchaser, during the quarterly period; and
(6) The tracking number of each shipment.
Section 12. That a NEW SECTION be added:
35-13A-12. Carrier--Quarterly reports.
A distilled spirits carrier shall file quarterly reports with the department on or before the fifteenth day of the month following each quarterly period. The required quarterly report shall be filed even if no business was transacted in this state during the reporting period.
The report shall include:
(1) The business name and address of the direct shipper for each shipment;
(2) The date of shipment;
(3) The name and address of shipment recipients in this state;
(4) The weight in pounds of each package shipped; and
(5) The tracking number of each shipment.
Section 13. That a NEW SECTION be added:
35-13A-13. Tax payments.
A direct shipper shall pay the alcohol excise tax as prescribed pursuant to 35-5-2, according to the rates established in subdivisions 35-5-3(2) and (5). Notwithstanding the filing and payment requirements prescribed in chapter 35-5, a direct shipper shall include on the report required by section 11 of this Act the gallons of distilled spirits shipped to recipients in this state in each distilled spirits category as set forth in subdivisions 35-5-3(2) and (5), and calculate the tax due for each category.
Additionally, the direct shipper shall pay the tax imposed by 35-5-6.1 on shipped distilled spirits based upon the purchase price of the distilled spirits sold to the consumer. The direct shipper shall remit the taxes quarterly on or before the fifteenth day of the month following each quarterly period.
A direct shipper that is also licensed, pursuant to chapter 35-13, as an artisan distiller or distiller shall receive a credit for any alcohol excise tax paid pursuant to this title for any distilled spirits sold for shipment in this state by the direct shipper.
Section 14. That a NEW SECTION be added:
35-13A-14. Electronic submission of reports--Electronic tax payments.
All reports required pursuant to sections 11 and 12 of this Act shall be submitted by electronic means to the department. All taxes required to be remitted pursuant to section 13 of this Act shall be remitted by electronic transfer to the department.
Section 15. That a NEW SECTION be added:
35-13A-15. Sale and shipment of distilled spirits--License required--Action by department--Civil penalty.
Any sale and shipment of distilled spirits directly to a person