New Online Services with California ABC

In case you have not already heard, the California Department of Alcoholic Beverage Control has announced new online services. With these new online services, licensees will be able to establish a License Administrator Account for their business. Ability to apply for a new ABC license online is also coming soon. These new online services will help streamline and modernize wineries’ interactions with the ABC.

Online services currently available with the ABC include:

  • Managing or renewing a license, paying renewal fees online
  • Becoming RBS alcohol server certified
  • Maintaining RBS server roster to verify server certification status
  • Applying to be an RBS Training Provider


California’s Newest Coastal AVA

by Katherine Pasichuke

The San Luis Obispo Coast AVA, also allowed to be dubbed ‘SLO Coast AVA’ on the bottle by the TTB, immediately evokes feelings of the slower pace of California coastal living just in the name. The TTB established this new AVA effective April 8, 2022.

SLO Coast AVA is approximately 408,505 acres with two already established AVAs nested within, the Edna Valley and Arroyo Grande Valley AVAs. To the west is the Pacific Ocean, spanning along the Central California coast from Hearst Castle down to Pismo Beach. To the east is the Santa Lucia Range, bordering the cooler marine influence this region experiences.

This area hosts Burgundy varietals and already provides some delicious wines with 78 vineyards and over 50 wineries throughout. More than 90 percent of existing acreage is less than six miles from the ocean, making it one of California’s coolest wine growing regions and a beautiful place to visit.


Changes for Alaska with Alcohol Laws, DTC Licenses for Wineries

by Katherine Pasichuke

On June 16, 2022, Alaska Governor Dunleavy signed Senate Bill 9, revamping the future for alcohol compliance for the state. SB 9 has placed new requirements on wineries, breweries, and distilleries shipping directly to consumers in Alaska. Up until now, wholesalers and manufacturers have not needed licenses to ship directly to Alaskan consumers.

SB 9 creates a manufacturer direct shipment license, with a biennial fee of $200. This new license authorizes the holder of a brewery retail license, winery retail license, or distillery retail license issued in another US state to sell and ship their products to Alaskan consumers. 

SB 9 also imposes new tax obligations on direct shippers. Once enacted, the holder of a manufacturer direct shipping license will be subject to the Alaska alcoholic beverage tax. Licensees will also have to send monthly statements and payments to the Alaska Department of Revenue, including total gallons and gallonage of each kind of beverage sold to consumers. Other requirements within SB 9 to be aware of include prohibiting shipping to consumers in dry areas of the state where the sale of alcohol is prohibited, using only ABC-approved common carriers, and abiding by certain volume limits

SB 9 does have a capacity cap for beers and distilled spirits manufacturers producing large quantities annually, but not for wine.

The Alcoholic Beverage Control Board is set to start accepting applications for this new license starting September 1, 2023, as SB 9 will take effect January 1, 2024. Until then, direct shippers may continue to ship into Alaska sans license or paying Alaskan beverage tax, but should keep on their radar that change is coming.


Update on SBA/PPP Loan Assistance

A couple continuing updates on SBA loans and the PPP program.

1. I know many banks have stopped accepting new applications for the Payroll Protection Program. Unfortunately, they were not prepared for the onslaught of applications they received on Friday and are now just trying to process what they have received. Check your bank’s website regularly (morning and evening) to find out when they will be accepting new applications for the PPP program. Some banks we work with, like Umpqua, have an email notification system you can sign up for. If you are banking with Umpqua and sign up for this notice, your personal customer representative in Napa is Paula Bernard.

2. All banks I have talked to are prioritizing their application process in somewhat the same following order: i. Current business account holders who have active lines of credit, ii. Current business account holders; iii. Current personal banking customers with active lines of credit; and iv. Current personal banking customers; and v. Everyone else. This might go without saying but your best bet for getting a PPP loan is by working with the bank with whom you have a business relationship and a line of credit. I mention this because some wineries may have local banks or credit unions (eg AmericanAg) they work with for their mortgage and have a business banking account tied to that mortgage, but may use a different bank (eg, Bank of America, Chase, Umpqua) for general AR / AP. In this case, working with your lender would be a better route for an SBA loan.

All banks I have spoken to are processing applications solely online.

3. Payroll companies like ADP have created a simple report that can be run to obtain the payroll information you will need to apply for a loan, the ADP report is super-easy to use. It includes IRS Forms 940 and 941 which you will need for your loan application. If you have a payroll company, I encourage you to login and download this report now so you have it on file when the time comes to apply for a loan.

3b. If you do not have payroll, but you have independent contractors that you pay regularly, make copies of your 2019 schedule 1040 (if ready) and back-up copies of your 1099 filings to substantiate your payroll costs. According to the Treasury website PPP fact sheet, Payroll costs include “For a sole proprietor or independent contractor: wages, commissions, income, or net earnings from self-employment, capped at $100,000 on an annualized basis for each employee.” I take this to mean your 1099 stubs will be accepted as proof of payroll, still waiting for confirmation on this fact.

4. ADP has a useful FAQ page on the PPP etc at:

5. Personally I am a bit discouraged at the roll-out for the SBA/PPP loans thus far — its been a lot of starts and stops and not much else. I imagine we all feel that way. But we are going to try and stay on top of it and are here to help you in any way we can. The best advice I can offer now is to download the payroll reports you will need if you haven’t already done so, and/or put together copies of tax returns and all those 1099s. You can also find the SBA/PPP loan package below, which may be useful when you are ready to apply with your lender:

TTB Newsletter for March 31, 2020

COVID-19 Special Edition — Postponed Due Dates for Tax and Other Related Filings
This special edition announces a 90-day postponement for TTB excise tax-related filings.The Alcohol and Tobacco Tax and Trade Bureau (TTB) recognizes that businesses that we regulate are being severely impacted by COVID-19. To assist these businesses during this period, we are postponing several filing and payment due dates for 90 days where the original due date falls on or after March 1, 2020, through July 1, 2020.Specifically, we are:Postponing tax payment due dates for wine, beer, distilled spirits, tobacco products, cigarette papers and tubes, firearms, and ammunition excise taxes.Postponing filing due dates for excise tax returns.Postponing filing due dates for submission of operational reports.Postponing filing due dates for claims for credit or refund by producers.Postponing filing due dates for claims by manufacturers of nonbeverage products.Postponing due dates for submission of export documentation.Considering emergency variations from regulatory requirements for affected businesses on a case-by-case basis.Reviewing requests for relief from penalties based on reasonable cause.See TTB Industry Circular 2020-2 for additional details.

COVID-19 Update

For the time being, we are continuing to alternate through the office Monday-Friday. We plan on continuing this schedule through the end of April. So far, we feel that this schedule is working successfully by allowing us to stay on top of the most important mail, compliance, AR and AP, but also minimizing the risk of exposure.

As I’m sure you have heard already, Congress has passed the Coronavirus Aid, Relief and Economic Security (CARES) Act, a $2.2 trillion economic stimulus bill which includes a number of programs and provisions that will help support wineries as they cope with the current crisis.
Below please find a brief description of the various aspects of CARES that we received from the Wine Institute News Alert on 3/26. We have taken the initiative of familiarizing ourselves with the process of applying for aid. If you plan on applying for aid but have not done so yet and would like help, please let us know:


Small Business Paycheck Protection Program

This SBA loan forgiveness program is meant to help small businesses (fewer than 500 employees) impacted by the pandemic and economic downturn to make payroll and cover other expenses from Feb. 15 to June 30. Notably, small businesses may take out loans up to $10 million—limited to a formula tied to payroll costs—and can cover employees making up to $100,000 per year. Loans may be forgiven if a firm uses the loan for payroll, interest payments on mortgages, rent, and utilities.

Employee Retention Tax Credit

Employers are eligible for a 50% refundable payroll tax credit on wages paid up to $10,000 per employee during the crisis. It would be available to employers whose businesses were disrupted due to virus-related shutdowns and firms experiencing a decrease in gross receipts of 50% or more when compared to the same quarter last year.

Deferral of Payroll Taxes 

Employer-side Social Security payroll tax payments may be delayed until Jan. 1, 2021, with 50% owed on Dec. 31, 2021 and the other half owed on Dec. 31, 2022.

Expanded Net Operating Loss (NOL) Provisions

Firms may take net operating losses (NOLs) earned in 2018, 2019, or 2020 and carry back those losses five years. The NOL limit of 80% of taxable income is also suspended, so firms may use NOLs they have to fully offset their taxable income. The bill also modifies loss limitations for non-corporate taxpayers, including rules governing excess farm losses.

Expanded Net Interest Deduction

The net interest deduction limitation, which currently limits businesses’ ability to deduct interest paid on their tax returns to 30% of earnings before interest, tax, depreciation, and amortization (EBITDA), has been expanded to 50% of EBITDA for 2019 and 2020.

MI LARA Announcement

Liquor Licensees Not Required to Place License in Escrow During State Of Emergency
March 31, 2020 – Liquor licensees whose businesses are closed for more than 30 days due to Executive Orders related to the Coronavirus COVID-19 state of emergency are not required to place their license in escrow, but must maintain proof of liquor liability insurance.The Michigan Liquor Control Commission today approved Administrative Order 2020-11 to allow for this exception to administrative rule R 436.1047 for the duration of the executive orders and for 30 days after the executive orders expire. Licensees who do not want to maintain liquor liability insurance must place their license in escrow.Due to the ongoing emergency, which has closed places of public accommodation to the public and directed residents to stay home as much as feasible, the MLCC finds that many licensees may not be able to continue active operation of their licensed businesses for extended periods during the state of emergency.Under Michigan Administrative Code R 436.1047, a licensee that ceases active operation for more than 30 days must place its license into escrow with the MLCC. The MLCC determined that “ceases active operation” doesn’t apply to licensees who have closed their businesses due to the current executive orders.For more information on the coronavirus/COVID-19 state of emergency, please visit the State of Michigan’s coronavirus website at further information, please monitor the MLCC website for updated information at is the mission of the MLCC to make alcoholic beverages available for consumption while protecting the consumer and the general public through the regulation of those involved in the importation, sale, consumption, distribution, and delivery of these alcohol products.

Update on COVID-19

We just wanted to send an update on our status here in Napa. As many of you know, there are now or will be soon “shelter in place” guidelines for most of our area. For the time being, our office is still open and we are still here to support you, but with a reduced in-office schedule in place for this week and next. (We will reevaluate our schedule for the beginning of April as necessary.)
Chandra will be in the office Monday, Wednesday, and Friday, with Mail pick up and bank deposits also Monday, Wednesday, and Friday. 
Friday we will close at noon.
Katie will be in the office Tuesday and Thursday.
Sean will be in the office routinely throughout the week.
We expect most tax and compliance deadlines to be extended for this month and next, but for the time being, we are operating on the typical reporting cycle.
If you have questions, or need additional or specific help, please let us know.
We wish you all the best.

Tennessee Wine and Spirits Retailers Association v. Thomas

A bit late to the news on this, but found this case interesting. Supreme Court rules against TN residency requirement: “The Court’s decision referenced the Constitution’s Commerce Clause to assert that Tennessee’s two-year residency requirement ‘blatantly favors the state’s residents and has little relationship to public health and safety” and is therefore unconstitutional.'” See Laurie Wachter’s very good article at: I can’t agree however with the conclusions drawn by Hinman (and perhaps others) that this ruling with lead to a robust Direct to Retailer industry, since the practical realities of developing and maintaining such a business are clearly outside the core competencies of any small to medium sized winery — and likely almost all large wineries to boot. I’d argue instead that developing relationships in the 3-tier system is ultimately more advantageous to the vast majority of wineries.

County Meets to Review Winery Application Process

The ongoing fight for the soul of Napa Valley continues: Disneyfication v. The Family Farm. This week the Napa County Board of Supervisors is taking another look a simplifying the winery permit process. There has been a clear need for this kind of change since the original winery ordinance went into practice. Interestingly, the driving force behind the push to streamline the application process is coming from Save the Family Farms.

If you are planning a small farm or winery, contact us for assistance with the approval process. We can help guide you through the application process and help shepherd the application through approval.

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