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Compliance Corner - Bottling Tasting Samples 0 B. Squirewell The Compliance Corner By Mary Beth Williams Many of you have asked about the requirements for sending small format bottles to customers for a virtual wine tastings that are happening now.   WineAmerica put the following federal guidance out, and the VA ABC guidance follows that. TTB Requirements Distribution of wine for tasting samples based on the requirements below will be treated as a normal taxable removal from the winery premises, subject to all applicable conditions of the Federal Alcohol Administration Act (FAA Act), the Alcoholic Beverage Labeling Act (ABLA), and the Internal Revenue Code (IRC). Wineries adhering to the following requirements would not need any waivers from current requirements. •    Samples must be provided in an approved standard of fill (50 mL which equals 1.7 fl. oz. or 100mL which equals 3.4 fl. oz.). •    Wine tasting containers must be properly labeled. •    If the tasting is of an existing wine that already has an approved COLA, the winery may change the net contents statement as an allowable revision. •    Assuming the wine samples are 100% domestic wine, the labels must include the following:    •    Brand name    •    Class and type designation    •    Appellation of origin (if required)    •    Alcohol content (or the designation “table wine,” if applicable)    •    Bottler’s name and address statement    •    Government health warning statement    •    Net contents    •    Sulfite declaration    •    If any changes are made that would require a new COLA, or the winery wishes to send tastings of a new wine, the winery must apply for a new COLA. •    Please note that the minimum type size for all these elements on a container of 187mL or less is 1mm. More information on formatting and other requirements for each element of the mandatory information is available on TTB’s wine labeling guidance page. •    Shipments of these containers must be treated the same as other types of removals from bond – for example, the wine must be tax-determined, and wineries must maintain the required removal from bond records. •    Wineries must ensure that any shipments are in compliance with the laws of their States and the State(s) of their customers. See below. VA ABC Requirements •    If you already have a COLA that will cover the product, you do not need to get a new product registration for the smaller bottle o    On your monthly report, you will simply add a second line for the product, showing a 50ml volume (or whatever the volume is), and tally the smaller bottles as normal on your monthly purchase order. •    If you need to get a new COLA for the smaller format, you’ll need to get a new ABC product registration as well. o    That product will get a new ABC product code, and will be reported on your monthly purchase order as a separate product with a separate code.  Make sure you use the correct volume notation on the purchase order so that you are paying the correct tax. Tips and Tricks •    Remember that if you’re just removing information from a label (to make it smaller), you don’t need a new COLA. •    The “glass of wine to go” allowed during COVID under ABC laws is just a glass, and therefore doesn’t require a COLA or the labeling requirements described above.  The closure parameters, etc, described in previous Compliance Corners all have to be met, but remember, these “to go” items are only allowed for pick up or delivery, not shipping.   Mary Beth Williams is the President of Williams Compliance and Consulting Group, LLC, a compliance services and legal consulting provider based in Hanover County, Virginia.  For more information, contact Mary Beth at Marybeth@williamscompliance.com or (804) 445-2924.
by B. Squirewell
Friday, May 1, 2020
COVID – Renewals and Cocktails to Go – Update #9 – 4/9/20 0 B. Squirewell The Compliance Corner By Mary Beth Williams COVID – Renewals and Cocktails to Go – Update #9 – 4/9/20 We have some of the gaps filled on the issues related to Executive Order Ten, so let’s get to it.   Renewals: If any of your VA ABC licenses expire in April, May, or June, the expiration will be delayed by 90 days. You won’t be issued a new license, so the license hanging on your wall may end up being expired for a little while, but you’ll be considered current with ABC, and there will be no penalties for paying for your renewal, so long as the renewal form and payment is submitted so that it can be approved before the end of that additional 90 day period.  Of course, you can go on and pay it when it’s currently due, if you’d prefer to do that.   This just gives you the option to hold onto the money you’d have to send ABC for an additional 90 days to give you time to get your revenue streams back to normal. Cocktails to Go: The cocktails to go provisions we mentioned yesterday IS going to apply to wineries as well. Effective tomorrow, 4/10, farm wineries will be able to sell glasses of wine, sangria, and slushies for to go, pick up, or delivery.    As with all other pick up and delivery orders, the order needs to be placed ahead of time.   The requirements for drinks to go are: Wine/sangria/slushy must be packaged in a glass, paper, or plastic container (or similar disposable container) or in a single original metal can with all container types having a secure lid or cap.The straw or sipping hole in the lid, if one exists, must be rendered inoperable.ABC has agreed to allow commonly purchased beverage cups such as soda or coffee cups, so long as tape is over the sipping/straw hole, and the lid taped onto the cup. The drinks should be transported in the trunk, or if there is no trunk, in an area of the vehicle not accessible by the driver. So don’t hand these drinks to the driver and let them drive off with them. All other open container laws remain in effect. Delivery of wine/sangria/slushies to go must end by 11pm each day.
by B. Squirewell
Thursday, April 9, 2020
COVID – Renewals and Cocktails to Go – Update #8 – 4/8/20 0 B. Squirewell The Compliance Corner By Mary Beth Williams COVID – Renewals and Cocktails to Go – Update #8 – 4/8/20 Much is unknown on these issues at this point, but we wanted to make sure you had the basics.     We’ll fill in the holes as quickly as possible. Renewals: The fees for all renewals due before June 30 are deferred until after that date.   We don’t know yet when they’ll be due, but if you license expires before June 30, you can wait to pay the fee until after June 30. Cocktails to Go: The Governor said that as of 12:01 Friday am, mixed beverage licensees will be able to sell cocktails to go.  ABC is working on the guidelines for what the rules will be for these types of sales, and will have those ready tomorrow.   PLEASE NOTE that the Governor stated that “mixed beverage licensees” would be able to sell cocktails to go.   Wineries are not mixed beverage licensees, and I am working on getting clarification on exactly what wording was used.   It’s certainly possible that the Governor is not fluent in the nuances of alcohol regulation, and that the law change will be applicable to us as well, but until we see the actual language, please do not promote that you can sell glasses to go.   We’ll update you as soon as we get clarification. Mary Beth Williams is the President of Williams Compliance and Consulting Group, LLC, a compliance services and legal consulting provider based in Hanover County, Virginia.  For more information, contact Mary Beth at Marybeth@williamscompliance.com or (804) 445-2924.
by B. Squirewell
Wednesday, April 8, 2020
Member Question & Answer - Payroll & Tips 0 B. Squirewell Question: How to handle a lower payroll due to tips.  Whether guaranteed payments to partners are included in the SBA PPP loan payroll costs? If we get a loan, to be forgiven, do we have to hit a payroll $ dollar target, or headcount target, or both? Answer:  Tips are included when calculating payroll costs. Section 1102 (36)(A)(vii)(I)(aa)(BB) of the CARES Act indicates that payroll costs includes "payment of cash tip or equivalent."  The payroll cost is used to determine the maximum amount of the loan. As a payroll cost, it would be paid out as wages to the employee and would therefore be forgiven.  
by B. Squirewell
Tuesday, April 7, 2020
COVID – How To Report Deliveries – Update #7 – 4/6/20 0 B. Squirewell The Compliance Corner By Mary Beth Williams COVID – How To Report Deliveries – Update #7 – 4/6/20 If you did any deliveries in March, you need to submit a delivery report to ABC with a postmark no later than the 15th of the month.  The report is available in an .xlsx format on the VWA COVID page - under the Documents you Need heading, and a copy of it is attached to this alert as well.   Also here is the delivery permit application if still needed. It’s important to note that you DO NOT need to submit excise taxes with that report.   You will submit the excise taxes for those bottles on your regular monthly farm winery report, which also needs to be postmarked on the 15th.  To that end, all bottles you delivered should be reported on your monthly Purchase Order, which will mean they show up on your monthly report, and the taxes are paid accordingly. Mary Beth Williams is the President of Williams Compliance and Consulting Group, LLC, a compliance services and legal consulting provider based in Hanover County, Virginia.  For more information, contact Mary Beth at Marybeth@williamscompliance.com or (804) 445-2924.
by B. Squirewell
Monday, April 6, 2020
Compliance Corner 3/17/2020 1 B. Squirewell Is there a specific form for deliveries for reporting them to ABC?
by Wisteria Farm and Vineyard
Wednesday, April 1, 2020
COVID – The Legalities – Update #5 – 230 – 3/30/20 0 B. Squirewell The Compliance Corner By Mary Beth Williams Today, Governor Northam issued a Stay at Home order, EO 55, https://www.governor.virginia.gov/media/governorvirginiagov/executive-actions/EO-55-Temporary-Stay-at-Home-Order-Due-to-Novel-Coronavirus-(COVID-19).pdf.      The EO mandates that citizens stay home, with a number of exceptions, and the focus in this EO is really on individual behavior rather than business activity.  The good news is that, at this point, the limitations already in place on your businesses remain have not been enhanced, so what worked yesterday works tomorrow as well.         Obtaining food, beverages, goods, or services via curbside pick up, take out, and delivery remains permissible. No sales for on-premises consumption can be made.   No more than 10 patrons, with enforced social distancing and heightened sanitization, can be at the winery to buy wine to take home with them.  Non-retail-businesses like agriculture and manufacturing had no further restrictions put on them under this order. We’re attaching a template of a letter you can give to your employees is attached, although we don’t think it’s needed at this time. As the stance, and perhaps language, continues to evolve in Virginia, we’ll update you and will update the template to mirror those changes at that time. These additional measures were put in place because people weren’t complying with the guidelines already in place.  We highly recommend that, if you haven’t already done so, you make your primary point of sale outside, and you limit the patron’s ability to touch bottles, countertops, etc. so that your need to sanitize is reduced.  The additional measures announced today were put in place because people weren’t complying with the existing guidelines.  Remain cognizant of the guidelines for our industry so that we don’t face more limitations. Stay well! Mary Beth Williams is the President of Williams Compliance and Consulting Group, LLC, a compliance services and legal consulting provider based in Hanover County, Virginia.  For more information, contact Mary Beth at Marybeth@williamscompliance.com or (804) 445-2924.
by B. Squirewell
Wednesday, April 1, 2020
COVID – TTB Reporting and Tax Filings – Update #6 – 3/31/20 0 B. Squirewell The Compliance Corner By Mary Beth Williams     TTB announced today that they are postponing the due date for Excise Tax Returns, Excise Tax Payments, Operations Reports, submission of Export Documentation, and submission of Claims by 90 days for all reports/returns/payments due between March 1 and July 1.   For monthly reporters, that means the Operations Report that was due on April 15th will now be due on July 14th, and excise tax returns and the accompanying payment for the period of 3/16-31 that would have been due on April 14th, will now be due on July 13th.   For quarterly reporters, the Operations Report and Excise Tax return (with payment) that were due on April 15 will now be due on July 14th. That same delay will continue through the 3 month period, and it is unclear how they intend to have you “catch up” after that 90 day period, but we’ll keep you posted on that.   Of course, you still can continue to submit your reports on your regular schedule, and I’d recommend that you continue with your operations reporting on schedule to eliminate the crazy catch up at the end of the postponement period (which just happens to coincide with harvest – fun!), but I’d hold off on submitting your excise tax returns until you’re ready to pay, obviously no later than the new deadline.   More detail can be found at https://www.ttb.gov/industry-circulars/ttb-industry-circulars-2020-2   Mary Beth Williams is the President of Williams Compliance and Consulting Group, LLC, a compliance services and legal consulting provider based in Hanover County, Virginia.  For more information, contact Mary Beth at Marybeth@williamscompliance.com or (804) 445-2924.
by B. Squirewell
Wednesday, April 1, 2020
Compliance Corner 3/24/20 0 B. Squirewell The Compliance Corner By Mary Beth Williams COVID – The Legalities – Update #3 – 7p 3/24/20 We’ve gotten some additional clarification on the prohibition of service and sales for on-premises consumption.  As we discussed on the call Tuesday, until 11:59pm on 4/23, wineries are directed to close all dining areas and congregation areas, but can continue to offer delivery, and carry out.  We have previously been advised that that applies to both inside and outside areas. After further discussion with VDACS after the issuance of this order, the purpose of this prohibition is to encourage people to stay home, in part by eliminating the enticement to go out and gather, and as such, they want the on-premises portions of these businesses to close completely.   They will broadly define “congregation areas” to include any area where people would be inclined to gather, including, but not limited to points of service or sales, and any designated seating area.   Further, VDACS says in a communication this afternoon that on-site browsing and shopping are not permissible under the intent of this order.  To that end, it remains my belief that sales for on-premises consumption will not be permissible under this order, and that your avenues for sales are curbside pickup, delivery, and shipping. I do not believe they want people in the winery looking at the wines browsing to make a choice. They want people to call in an order (or text, email, app, or online place an order), they have people pull up, pay for the wine at their car, and you take the wine to the car. That’s the safest way to do it.  Are you in jeopardy of being shut down for having someone get out of their car to come pay for and pick up their order? No, but certainly the plan is to limit interaction where the virus could be transferred.  This is new, and the boundaries have not been tested yet, and certainly additional clarification may be added, but I believe they will be enforcing this prohibition quite stringently.  Remember that a violation is a Class 1 misdemeanor as well.  If you were to allow people to purchase a bottle to go, and then go sit on a picnic blanket and consume it, I believe that could be deemed a congregation area, particularly if you had multiple people seated on blankets in a general area of your property. It flies at least in the face of the intent of the law, if not in the face of the actual language. I can’t give you much guidance beyond that at this point, but to say no on-premises sales should happen. I hope that gives a little more clarity. We’ll keep you posted as other things develop. Mary Beth Williams is the President of Williams Compliance and Consulting Group, LLC, a compliance services and legal consulting provider based in Hanover County, Virginia.  For more information, contact Mary Beth at Marybeth@williamscompliance.com or (804) 445-2924.
by B. Squirewell
Wednesday, March 25, 2020
Compliance Corner 3/23/2020 0 B. Squirewell The Compliance Corner By Mary Beth Williams COVID – The Legalities – Update #3 – 2p 3/23/20 As of midnight tomorrow, 3/24, on premises service and sales of food and alcohol is banned.   Delivery, Curbside, and carryout is still permitted.    All gatherings of more than 10 people, whether public or private, are banned.    We’ll get you more specifics as they become available.  Delivery  Here are the specific instructions that ABC has put in place for delivery permits during the COVID. 1.       Sales are only authorized to individuals who are otherwise legally qualified to purchase wine and beer. 2.       The General Permit authorizes delivery of such products without the necessity of the licensee obtaining a delivery permit from the Virginia Alcoholic Beverage Control Authority. All such deliveries of beer, wine, or farm wine shall be performed by either (i) the owner or any agent, officer, director, shareholder or employee of the permittee or (ii) an independent contractor of the permittee, provided that (a) the permittee has entered into a written agreement with the independent contractor establishing that the permittee shall be vicariously liable for any administrative violations of this section or § 4.1-304 committed by the independent contractor relating to any deliveries of beer, wine, or farm wine made on behalf of the permittee and (b) only one individual takes possession of the beer, wine, or farm wine during the course of the delivery. 3.       Deliveries may be made to consumers in the Commonwealth forgoing the requirement to get the recipient’s signature when making a delivery. Provided that whoever is making the delivery denotes on electronic or paper form the legible full name of the individual that is receiving the delivery as well as the method of verification for documenting that the recipient was at least 21 years of age as the delivery permittee has the sole responsibility of verifying that the recipient is at least 21 years of age pursuant to 3VAC5-50-20. 4.       Delivery shall be refused when the proposed recipient appears to be under the age of 21 years and refuses to present valid identifications. 5.       All permittees delivering wine or beer pursuant to this section shall affix a conspicuous notice in 16-point type or larger to the outside of each package of wine or beer delivered in the Commonwealth, in a conspicuous location stating: "CONTAINS ALCOHOLIC BEVERAGES; SIGNATURE OF PERSON AGED 21 YEARS OR OLDER REQUIRED FOR DELIVERY." Such notice shall also contain the delivery permit or license number of the delivering permittee. 6.       No more than four cases of wine nor more than four cases of beer may be delivered at one time to any person in Virginia to whom alcoholic beverages may be lawfully sold, except that the permittee may deliver more than four cases of wine or more than four cases of beer if he notifies the Department in writing at least one business day in advance of any such delivery, which notice contains the name and address of the intended recipient. We’ll keep you posted as things change over the weekend. Mary Beth Williams is the President of Williams Compliance and Consulting Group, LLC, a compliance services and legal consulting provider based in Hanover County, Virginia.  For more information, contact Mary Beth at Marybeth@williamscompliance.com or (804) 445-2924.   Dear Food Establishment: On March 17, 2020, Governor Northam and Virginia Department of Health (VDH) Commissioner Oliver issued a Public Health Emergency Order to enforce a ten (10) patron limit in restaurants. This Order mandates that all VDH regulated restaurants and similar establishments in Virginia restrict occupancy to not more than 10 patrons at a given time. It is the interpretation of the Virginia Department of Agriculture & Consumer Services (VDACS) that the order issued by the Governor and State Health Commissioner regarding the restriction limiting the number of patrons at restaurants and similar establishments to ten (10), also applies to similar establishments or activities as regulated by the VDACS Food Safety Program, including farmers’ markets, areas at breweries wineries and distilleries that include tasting rooms, public taprooms, sit down seating areas within these facilities and any comparable retail operation such as convenience stores with food service and seating. This directive does not include grocery stores, as they are deemed essential for retail food distribution to the general population.   VDACS is continuing to encourage all food establishments to be vigilant by emphasizing employee health, good hygiene and sanitation practices for employees. While COVID-19 is not spread by food, continued action should be taken to prevent the person to person spread of COVID-19 from an infected food worker to co-workers and/or customers. Thank you for your cooperation regarding this important directive. For questions related to the coronavirus, visit the Virginia Department of Health's website at  http://www.vdh.virginia.gov/environmental-health/ Additional guidance can be found at:  https://www.cdc.gov/coronavirus/2019-ncov/community/guidance-business-response.html   https://www.fda.gov/emergency-preparedness-and-response/mcm-issues/coronavirus-disease-2019-covid-19-frequently-asked-questions   
by B. Squirewell
Tuesday, March 24, 2020
Compliance Corner 3/19/2020 0 B. Squirewell The Compliance Corner By Mary Beth Williams COVID – The Legalities – UPDATE #1 – 3/18/20 We remain in uncharted waters, and there is a lot of action going on impacting the way you can do business.  So buckle up, and let’s get caught up: Tasting Rooms and Retail Activities Yesterday afternoon , 3/18, VDACS issued a determination that the Executive Order previously issued by the Governor and the Health Commissioner restricting the number of patrons at restaurants to 10 patrons also applies to similar establishments or those retail entities that are regulated under the VDACS Food Safety Program, specifically including the tasting rooms of farm wineries, wineries, breweries, and distilleries.  The order from yesterday is attached here.  https://www.governor.virginia.gov/media/governorvirginiagov/governor-of-virginia/pdf/Order-of-the-Governor-and-State-Health-Commissioner-Declaration-of-Public-Health-Emergency.pdf We reached out to VDACS for clarification on the use of farm wineries’ licensed outdoor space, and it is their opinion that the Executive Order does NOT apply to outdoor spaces that have adequate outdoor space to ensure adequate and enforced social distancing, and which have the ability to provide appropriate sanitization to minimize the risk of spreading the virus.       With that clarification, the current law for enclosed spaces is as follows:  No more than 10 patrons (this does NOT include employees) in the establishment at one time.Again, I don’t believe that includes people outside, but I’m waiting for clarification.The 10 WOULD include people coming in from outside to use the restaurant or order wine at the tasting bar. This is considered an emergency order, which increases penalties significantly.If you are found to be in violation (and I hear that police are checking), you’re subject eviction of your guests by the police; immediate shutdown of the establishment, a misdemeanor charge brought against the owner, and a potential suspension or fine at ABC. This remains in effect until amended or rescinded by the Governor. The farm wineries are in a unique position to be able to provide the public with a safe place to have life seem “normal” for a while, but it is IMPERATIVE that this be done with consideration to health concerns for both your guests and your staff.  Ensuring that this vital privilege continues is dependent on each winery doing everything in its power to ensure both the spirit and the letter of the Executive Order are complied with. To that end, we’d recommend the following best practices until the executive order is lifted for utilizing your outdoor consumption area, to ensure that this privilege remains intact through the COVID crisis: Move your sales location outside, with indoor access limited to use of the restrooms. Create and enforce a rigorous restroom cleaning schedule Tables are physically separated so that they are no closer than 6’ apart. Control the incoming number of guests to ensure that adequate social distancing beyond the tables is maintain. Have a staff member ask groups to move apart if they’re too close, and to ensure that no more than 10 people are inside (including for the restrooms) at one time. Glass and bottle sales only; no tastings. Use single-use vessels for consumption: plastic cups or glassware that the guests take home with them to clean.Do not refill a used glass. No growler refills. Go to a cashless system to prevent cash having to change hands. Disinfect the POS screen between uses. Communicate the new protocol to your customers so that they know what they can and can’t do when they come visit. A WEBINAR WILL BE HELD ON THESE ISSUES TOMORROW, FRIDAY 3/20, AT 1:00 TO GIVE ADDITIONAL GUIDANCE. On a separate but related note, we also had a call with ABC yesterday, and they are doing things very quickly to try to make doing business as easy as possible amid these restrictions. They feel that they have the authority to make changes to regulations under the state of emergency, but not to statutes. Delivery permit requests are now being expedited, and can be submitted via email to lrmhlp@abc.virginia.gov.  They are generally being issued within a day at this point.  Remember, this is delivery to an end consumer, not for resale, and each delivery is limited to no more than 4 cases person per delivery.   The requirement to have the consumer sign the invoice when you deliver has been waived for the duration of this crisis.  There is no fee for this permit, and is available to anyone with a winery or farm winery license.  You can see the other requirements on the Compliance corner sent out 3/17. ABC has also issued an emergency ruling that during this crisis, wine MAY be delivered to a person in a car, provided they have ordered the wine ahead of time (even if ahead of time is by calling it in while they’re sitting there).  It’s fine if they pay at the time of pickup, but the order must have been placed ahead of time.   What they don’t want is a drive through window, where someone pulls up, orders a couple of bottles, and picks them up like they’re a Big Mac. It’s still fine for you to set up a spot outside and take to-go orders, and either you or the customer can carry the wine to the car. The above prohibition on delivering to the car is just on people who aren’t coming up and ordering in person. TAX IMPLICATIONS VA Dept of Tax will liberally entertain applications for an extension to pay Feb VA Sales and Use tax (due tomorrow) until April 20.  Interest will accrue on that balance, but if you make application, you won’t have any penalties imposed. VA personal income tax returns are still due on 5/1, BUT you may delay payments to 6/1.   You will still owe interest (the dept doesn’t have the authority to waive interest under current law) for that period, but you’ll have another month to pay without penalty. SBA LOANS The Governor issued a declaration that VA is an economic injury disaster location, in order to facilitate emergency SBA loans for VA citizens. The website with more information on these loans is https://www.sba.gov/funding-programs/disaster-assistance. The letter making the request is attached.  You may need to attach it to your application for these emergency loans.    https://www.governor.virginia.gov/media/governorvirginiagov/governor-of-virginia/pdf/SBA-Disaster-Declaration-Request.pdf Mary Beth Williams is the President of Williams Compliance and Consulting Group, LLC, a compliance services and legal consulting provider based in Hanover County, Virginia.  For more information, contact Mary Beth at Marybeth@williamscompliance.com or (804) 445-2924.
by B. Squirewell
Friday, March 20, 2020
1025 Boulders Parkway, Suite 110
N. Chesterfield, VA 23225
804-592-3196
info@vawine.org