Starting a winery is a dream for many wine enthusiasts, but it involves navigating various legal considerations to ensure compliance and success. From licensing and permits to labeling regulations and interstate shipping laws, understanding the legal landscape is crucial. That’s why Lindsey Zahn P.C. has created this invaluable guide for new wineries. Below, you’ll find the top ten business and compliance considerations to kickstart your winery venture.
Top Ten Legal and Compliance Considerations When Starting a Winery
- Employer Identification Number (EIN): Obtaining an EIN from the IRS is one of your initial steps. This number is crucial for tax purposes and is required for the federal winery permit application through the Alcohol and Tobacco Tax and Trade Bureau (“TTB“).
- Business Organization: Choose the right business structure – whether it’s a sole proprietorship, partnership, corporation, or LLC. Each comes with its own tax implications, so understanding these is vital. It may be ideal to consult a tax professional and/or a corporate attorney to better understand the business structure that will best suit your winery.
- Business Name Registration: If your business name differs from your personal name (for sole proprietors) or the registered name of your LLC or corporation, you’ll need to complete a “Doing Business As” (DBA) registration with your state government.
- Complete the Federal TTB Winery Permit Application: Wineries that manufacture, process, and/or pack or bottle wine in the United States must obtain a federal basic TTB winery permit with the TTB. The application process can be time-consuming and typically involves a wait of at least three months for TTB approval. Consider working with an attorney who focuses on alcohl beverage law to streamline this procedure.
- State Winery License Application: Review state level requirements for starting a winery in your specific state. In some states, you can apply for a winery license while your federal application is pending. Other states may require the submission of your TTB federal permit at the outset of your state license. Ensure compliance with your specific state’s regulations and plan accordingly.
- Grape Sourcing and Appellations: Understanding the rules regarding grape sourcing and wine appellations is crucial. Familiarize yourself with the requirements for using specific appellations, vineyard designations, or AVAs (American Viticultural Areas) on your wine labels.
- Determine Bond Requirements and Potential Excise Tax Liability: Wineries expecting to owe a certain amount of federal excise taxes to the TTB may be required to hold a bond. Additionally, some states may require a new winery to hold a bond when applying for a state license (typically, if a bond is required at the state level, it is a separate bond from what TTB may require).
- Understand Distribution and Direct-to-Consumer Shipping Laws: Research and understand the laws and regulations regarding wine distribution and direct-to-consumer sales within your state. Some states have restrictions on shipping wine directly to consumers, while others have more liberal regulations. Comply with the specific requirements for your target markets.
- Trademarks and Intellectual Property: Protect your winery’s brand by registering trademarks for your winery name, logos, and wine labels. Conduct thorough trademark searches to avoid infringing on existing trademarks and consult with an intellectual property attorney to secure your intellectual property rights.
- Contracts and Agreements: Establish contracts and agreements for grape sourcing, vineyard leases, distribution partnerships, and other business relationships. Work with an attorney focusing on wine law to ensure your contracts protect your interests and comply with applicable regulations.
Please note that while these are critical considerations, there are other aspects to contemplate when starting your winery, such as — but not limited to — environmental issues, local laws, and addressing employment and contractual matters. The “Top Ten” list serves as a reference guide to help you on your journey.
At Lindsey Zahn P.C., we understand that establishing a winery involves dealing with various federal and state agencies, which can be time-consuming and complex. We have extensive experience working with the TTB, FDA, and state agencies, allowing us to save you time and reduce expenses during the permit and licensing processes. Our firm can guide you through every step, ensuring your winery venture begins on a solid foundation. For more information about our services and how we can assist your winery, please contact us at info@zahnlawpc.com or 929-ZAHNLAW.