Tennessee direct-to-consumer (DTC) wine shipping rules and regulations

DTC License Required: Yes

License Type: DTC Permit

License Fee: $150, plus one-time $300 fee

License Expiration: 1 year from issue date

License Bond: N/A

State Sales Tax: Yes

State Sales Tax Rate: 7.000%

Local Sales Tax: Yes

Local Sales Tax Range: 0%–3%

Sales Tax on Shipping: Yes

Alcoholic Beverage Tax: $1.21/gal

Consumer Limit: One case per person per month regardless of winery size.

• Wineries producing 270,000 liters of wine or more annually: 3 cases per person per calendar year.
• Wineries producing less than 270,000 liters of wine annually: 6 cases per person per calendar year.

Per State Aggregate: Unlimited

Sales and Use Tax: Monthly by the 20th

Excise Tax: Annually by Jan 15th

Direct Shipment: N/A

Record Retention: At least 3 years

Product Restrictions: A winery direct shipper may only ship their own wine brands.

Product Registration: Winery must submit a list of brand names that will be shipped to Tennessee residents to the Tennessee Alcoholic Beverage Commission.

Registration Fees: N/A

Product Requirements: Any shipment of wine shall be made only in containers that clearly indicate on the exterior of the container, visible to a person at least three feet (3′) away, that the container “Contains alcohol: Signature of person 21 years of age or older required for delivery.”

*Nearly all states have some kind of rule regarding how wine must be labeled when being shipped direct to consumer. Please check for the unique rule for your state.

Tax can get complicated when it comes to direct-to-consumer (DTC) shipments. The beverage alcohol industry is different from other industries in that licensed alcohol shippers are required to register for sales tax in most states, independent of economic or physical nexus.

Depending on the state, sales and use tax can be applied at the state, county, city, or special district levels. Address accuracy is important to determine if a location falls into an incorporated or unincorporated section of a county or a special district.

On top of the sales tax requirements, alcohol taxes also apply to DTC shipments. Several states have “markup” taxes, where the retail value of the alcohol is multiplied by a percentage rate. Most of these markup taxes are either required or can be passed through to the consumer. 

Traditional “gallonage”-based excise taxes are also usually due on DTC shipments. Most of the time these are factored into the price of the item and not passed through to the consumer. In a few cases, these excise taxes are required to be passed on to the consumer.

Rules and regulations for your winery, brewery, or other beverage alcohol business change frequently. Avalara for Beverage Alcohol helps distill the beverage alcohol compliance process so you can focus on your business.