SF 245 (LSB 1058XS (1) 91)

SENATE FILE 245

BY  SHIPLEY

A BILL FOR

An Act providing for the direct shipment of alcoholic liquor, providing fees, and including effective date provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 123.28, subsection 5, Code 2025, is amended to read as follows:
   5.  This section does not affect the right of a retail alcohol license holder to purchase, possess, or transport alcoholic liquors subject to this chapter.  In addition, this section does not impact the direct shipment of alcoholic liquor as regulated by section 123.42A.
    Sec. 2.  Section 123.32, subsection 1, paragraph b, Code 2025, is amended by adding the following new subparagraph:
   NEW SUBPARAGRAPH.  (05)  An alcoholic liquor direct shipper license as provided in section 123.42A.
    Sec. 3.  Section 123.32, subsection 1, paragraph b, subparagraph (10), Code 2025, is amended to read as follows:
   (10)  A wine An alcoholic beverage carrier permit as provided in section 123.188.
    Sec. 4.  Section 123.39, subsection 1, paragraph a, subparagraph (2), Code 2025, is amended to read as follows:
   (2)  The director may suspend a certificate of compliance, a class “D” retail alcohol license, a manufacturer’s license, a broker’s permit, an alcoholic liquor direct shipper license, a class “A” native distilled spirits license, a class “A” or special class “A” beer permit, a class “A” wine permit, a wine direct shipper’s permit, or a wine an alcoholic beverage carrier permit for a period not to exceed one year, revoke the license, permit, or certificate, or impose a civil penalty not to exceed one thousand dollars per violation.
    Sec. 5.  Section 123.41, subsection 1, Code 2025, is amended to read as follows:
   1.  Each completed application to obtain or renew a manufacturer’s license shall be submitted to the department electronically, or in a manner prescribed by the director, and shall be accompanied by a fee of three hundred dollars payable to the department. The director may in accordance with this chapter grant and issue to a manufacturer a manufacturer’s license, valid for a one-year period after date of issuance, which shall allow the manufacture, storage, and wholesale disposition and sale of alcoholic liquors to the department and to customers outside of the state pursuant to the laws of that jurisdiction.
    Sec. 6.  Section 123.41, Code 2025, is amended by adding the following new subsection:
   NEW SUBSECTION.  1A.  A manufacturer of alcoholic liquor may ship alcoholic liquor in closed containers to individual purchasers inside this state by obtaining an alcoholic liquor direct shipper license pursuant to section 123.42A.
    Sec. 7.  NEW SECTION.  123.42A  Direct shipment of alcoholic liquor —— license and requirements.
   1.  An alcoholic liquor manufacturer licensed or permitted pursuant to laws regulating alcoholic beverages in this state or another state may apply for an alcoholic liquor direct shipper license, as provided in this section. For the purposes of this section, an “alcoholic liquor manufacturer” means a business with an operating still which distills spirits, barrel matures spirits for a period of two years on the licensed premises of the distillery where matured, or blends or mixes spirits comprised solely of spirits distilled or barrel matured for a period of two years on the licensed premises of the distillery.
   2.  a.  Only an alcoholic liquor manufacturer that holds an alcoholic liquor direct shipper license issued pursuant to this section is authorized to sell alcoholic liquor at retail for direct shipment to any person within this state. This section does not prohibit an authorized retail licensee or permittee from delivering alcoholic liquor pursuant to section 123.46A.
   b.  An alcoholic liquor manufacturer applying for an alcoholic liquor direct shipper license shall submit an application for the license electronically, or in a manner prescribed by the director, accompanied by a true copy of the manufacturer’s current alcoholic beverage license or permit issued by the state where the manufacturer is primarily located, a copy of the manufacturer’s basic permit issued by the alcohol and tobacco tax and trade bureau of the United States department of the treasury, and documents filed by the manufacturer with the alcohol and tobacco tax and trade bureau of the United States department of the treasury that show the total number of proof gallons of distilled spirits produced and manufactured by the manufacturer for the preceding calendar year.
   c.  An application submitted pursuant to paragraph “b” shall be accompanied by a license fee in the amount of twenty-five dollars.
   d.  A license issued pursuant to this section may be renewed annually by submitting a renewal application with the director in a manner prescribed by the director, accompanied by the twenty-five dollar license fee.
   3.  The direct shipment of alcoholic liquor pursuant to this section is subject to all of the following requirements and restrictions:
   a.  Alcoholic liquor shall only be shipped to a resident of this state who is at least twenty-one years of age, for the resident’s personal use and consumption and not for resale as follows:
   (1)  An alcoholic liquor direct shipper licensee may sell and ship alcoholic liquor to any person who is at least twenty-one years of age for personal use and not for resale if the licensee produces in, or imports into, the United States one hundred fifty thousand proof gallons or fewer of distilled spirits per calendar year.
   (2)  An alcoholic liquor direct shipper licensee may sell and ship up to nine liters of alcoholic liquor per calendar year to any person who is at least twenty-one years of age for personal use and not for resale if the licensee produces in, or imports into, the United States more than one hundred fifty thousand proof gallons of distilled spirits per calendar year.
   b.  Alcoholic liquor subject to direct shipping shall be properly registered with the federal alcohol and tobacco tax and trade bureau, and manufactured on the licensed premises of the alcoholic liquor direct shipper licensee.
   c.  Alcoholic liquor subject to direct shipping shall be properly registered with the department. Products which are not listed for sale by the department must be registered electronically with the department for direct shipping. This registration must include the name of the manufacturer, the name of the brand, the standard of fill, the wholesale price, and other information as requested by the department. The registration shall be updated as necessary to ensure the department possesses an accurate, current registration.
   d.  All containers of alcoholic liquor shipped directly to a resident of this state shall be conspicuously labeled with the words “CONTAINS ALCOHOL: SIGNATURE OF PERSON AGE 21 OR OLDER REQUIRED FOR DELIVERY” or shall be conspicuously labeled with alternative wording preapproved by the director.
   e.  All containers of alcoholic liquor shipped directly to a resident of this state shall be shipped by a holder of an alcoholic beverage carrier permit as provided in section 123.188.
   f.  Shipment of alcoholic liquor pursuant to this subsection does not require a refund value for beverage container control purposes under chapter 455C.
   4.  An alcoholic liquor direct shipper licensee shipping alcoholic liquor to this state shall remit the following amount to the department in a manner as directed by the department:
   a.  For alcoholic liquor that is listed for sale by the department, an amount equivalent to fifty percent of the listed wholesale price.
   b.  For alcoholic liquor that is not listed for sale by the department, an amount equivalent to fifty percent of the wholesale price as registered with the department under subsection 3.
   5.  Each alcoholic liquor direct shipper licensee shall make a report under oath to the department electronically, or in a manner prescribed by the director, on or before the tenth day of each month, which includes all of the following information:
   a.  The products and quantities shipped directly to residents of this state in the preceding month.
   b.  The name and address of the individuals to whom the alcoholic liquor was sold in each sale.
   c.  The wholesale price of the alcoholic liquor sold.
   d.  The purchase price of the alcoholic liquor sold and the amount of taxes charged to the individual purchasing the alcoholic liquor.
   e.  The alcoholic beverage carrier permittee who delivered the shipment.
   f.  All documents filed by the alcoholic liquor direct shipper licensee with the alcohol and tobacco tax and trade bureau of the United States department of treasury for the preceding month, including all production, storage, and processing reports.
   6.  The license holder at the time of filing the report as required by subsection 5 shall pay to the department the amount as required pursuant to subsection 4. The department shall assess and collect a civil penalty of ten percent of the amount due if the report required to be filed pursuant to this section and the amount required to be paid as provided by subsection 4 is not filed and the amount paid within the time required by this section.
   7.  An alcoholic liquor direct shipper licensee shall be deemed to have consented to the jurisdiction of the department or any other agency or court in this state concerning enforcement of this section and any related laws, rules, or regulations. A license holder shall allow the department to perform an audit of shipping records upon request.
   8.  A violation of this section shall subject the licensee to the general penalties provided in this chapter and shall constitute grounds for imposition of a civil penalty or suspension or revocation of the license pursuant to section 123.39.
    Sec. 8.  Section 123.43A, subsection 2, Code 2025, is amended to read as follows:
   2.  A native distillery shall not sell more than nine liters per person per day, of native distilled spirits on the premises of the native distillery. However, a native distillery shall not directly may ship native distilled spirits for sale at retail manufactured by the native distillery in closed containers to individual purchasers inside the state by obtaining an alcoholic liquor direct shipper license pursuant to section 123.42A. The native distillery shall maintain records of individual purchases of native distilled spirits at the native distillery for three years.
    Sec. 9.  Section 123.43A, subsection 7, Code 2025, is amended to read as follows:
   7.  A native distillery may sell the native distilled spirits it manufactures to customers outside the state, pursuant to the laws of that jurisdiction.
    Sec. 10.  Section 123.46A, subsection 5, Code 2025, is amended to read as follows:
   5.  Nothing in this section shall impact the direct shipment of alcoholic liquor as regulated by section 123.42A or the direct shipment of wine as regulated by section 123.187.
    Sec. 11.  Section 123.173C, subsection 4, paragraphs b and d, Code 2025, are amended to read as follows:
   b.  A person, within or outside of the state, who desires to ship wine from a private collection to a wine auction permittee to be sold at auction shall do so through a holder of a wine an alcoholic beverage carrier permit. The wine auction permittee shall ensure that each bottle of wine so acquired is permanently affixed with a label stating that the wine was acquired from a private collection.
   d.  A permittee is responsible for the storage of all wines that are to be offered at auction at the licensed premises, and for the subsequent shipment and delivery of all wines sold at auction to the purchasers of the wines. Shipment of wine pursuant to this paragraph shall only be done by a holder of a wine an alcoholic beverage carrier permit.
    Sec. 12.  Section 123.187, subsection 3, paragraph d, Code 2025, is amended to read as follows:
   d.  All containers of wine shipped directly to a resident of this state shall be shipped by a holder of a wine an alcoholic beverage carrier permit as provided in section 123.188.
    Sec. 13.  Section 123.188, subsections 1, 2, and 4, Code 2025, are amended to read as follows:
   1.  A person desiring to deliver alcoholic liquor subject to direct shipment within this state pursuant to section 123.42A, wine subject to direct shipment within this state pursuant to section 123.187, or to deliver wine shipped to or by a wine auction permittee pursuant to section 123.173C, shall submit an application for a wine an alcoholic beverage carrier permit electronically, or in a manner prescribed by the director, which shall be accompanied by a fee in the amount of one hundred dollars.
   2.  The director may in accordance with this chapter issue a wine an alcoholic beverage carrier permit which shall be valid for one year from the date of issuance unless it is sooner suspended or revoked for a violation of this chapter.
   4.  The delivery of alcoholic liquor or wine pursuant to this section shall be is subject to the following requirements and restrictions:
   a.  A wine An alcoholic beverage carrier permittee shall not deliver alcoholic liquor or wine to any person under twenty-one years of age, or to any person who either is or appears to be in an intoxicated state or condition.
   b.  A wine An alcoholic beverage carrier permittee shall obtain valid proof of identity and age prior to delivery, and shall obtain the signature of an adult as a condition of delivery.
   c.  A wine An alcoholic beverage carrier permittee shall maintain records of alcoholic liquor or wine shipped which include the permit number and name of the alcoholic liquor or wine manufacturer or wine auction permittee, quantity of alcoholic liquor or wine shipped, recipient’s name and address, and an electronic or paper form of signature from the recipient of the alcoholic liquor or wine. Records shall be submitted to the department on a monthly basis in a form and manner to be determined by the department.
    Sec. 14.  EFFECTIVE DATE.  This Act takes effect January 1, 2026.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill allows for the direct shipment of alcoholic liquor within the state.
   New Code section 123.42A provides for the direct shipment of alcoholic liquor and provides for an alcoholic liquor direct shipper license. An alcoholic liquor direct shipper licensee (licensee) may sell and ship any amount of alcoholic liquor to any person who is at least 21 years of age for personal use and not for resale if the licensee produces in, or imports into, the United States 150,000 proof gallons or fewer of distilled spirits per calendar year. If the licensee produces or imports more than 150,000 proof gallons of distilled spirits, a licensee may sell and ship up to nine liters of alcoholic liquor per calendar year to a person 21 years of age or older. The annual fee for the license is $25.
   Provisions governing the direct shipment of wine and the wine direct shipper permit are generally made applicable to the direct shipment of alcoholic liquor. 
   The bill requires all alcoholic liquor subject to direct shipping to be properly registered with the department of revenue (department) and that products which are not listed for sale by the department must be registered to include information on the name of the manufacturer, the name of the brand, the standard of fill, the wholesale price, and other information as requested by the department. The bill also requires each licensee to make a monthly report to the department that lists the products and quantities shipped directly to residents of this state in the preceding month, the name and address of the individuals to whom the alcoholic liquor was sold in each sale, the wholesale price of the alcoholic liquor sold, the purchase price and taxes charged of the alcoholic liquor sold, the alcoholic beverage carrier permittee who delivered each shipment, and documents filed by the licensee with the alcohol and tobacco tax and trade bureau of the United States department of treasury for the preceding month, including all production, storage, and processing reports. 
   Finally, the bill requires a licensee to remit an amount to the department depending on whether the alcoholic liquor shipped is listed for sale by the department. If the alcoholic liquor is listed for sale by the department, the permittee shall remit to the department an amount equivalent to 50 percent of the wholesale price paid by the department for the alcoholic liquor. If the alcoholic liquor is not listed for sale by the department, the permittee shall remit to the department an amount equivalent to 50 percent of the wholesale price of the alcoholic liquor as registered with the department. The bill provides that a civil penalty of 10 percent of the amount due shall be assessed and collected if the amount required to be paid to the department as provided by the bill is not paid within the time required. Generally, moneys collected by the department under Code chapter 123 for the issuance of permits and licenses, and other moneys and receipts received by the department from any other source under the Code chapter, are deposited in the beer and liquor control fund (Code section 123.17). Civil penalties imposed and collected by the department under the Code chapter are credited to the general fund of the state.
   The bill allows a manufacturer of alcoholic liquor and a native distillery to ship alcoholic liquor or native distilled spirits, as applicable, to individual purchasers inside this state by obtaining an alcoholic liquor direct shipper license as established in the bill.
   The bill replaces the wine carrier permit under current law with an alcoholic beverage carrier permit to provide for the direct shipment of alcoholic liquor as provided by the bill.
   The bill takes effect January 1, 2026.