Taxable and Non-taxable Sales Transactions by Native Wineries

Topics:

Alcohol

The Iowa wine gallonage tax applies to certain sales transactions involving native wineries. The tax rate is $1.75 per wine gallon and is imposed on specific sales as outlined below.

Tax Rate $1.75 per wine gallon or fractional gallon sold in the state, subject to the conditions specified below.

Taxable Transactions

  • Wholesale Sales to Retail Licensees: When a native winery sells native wine at wholesale to a person holding a retail license (e.g., grocery store, liquor store, or restaurant).
  • Wholesale Sales to Own Retail License: When a native winery sells native wine at wholesale to its own retail license for subsequent sale by the drink or by unopened bottle for off-premises consumption.
  • Direct Shipment Sales: When a native winery sells and ships native wine directly to Iowa customers for personal use through its wine direct shipper permit.

Non-taxable Transactions

  • Retail Sales at Manufacturing Premises: When a native winery sells native wine by the bottle for off-premises consumption from its manufacturing premises under its class β€œA” wine permit.
  • Retail Sales at Additional Locations: When a native winery sells native wine by the bottle for off-premises consumption from an additional location established under its class β€œA” wine permit and registered with the Iowa Department of Revenue (IDR).
  • Wholesale Sales to Another Class β€œA” Wine Permittee or Out-of-State Distributor: When a native winery sells native wine to an in-state wine wholesaler or an out-of-state distributor, in which case the wholesaler or distributor is responsible for paying the wine gallonage tax.

Record-Keeping

Native wineries should maintain accurate records distinguishing between sales made under a class β€œA” wine permit, a retail license, and a wine direct shipper permit to ensure proper tax reporting and compliance.

Penalties and Violations

Failure to comply with Iowa Code chapter 123 may result in administrative sanctions, including civil penalties, license or permit suspension, or revocation. Failure to report and remit the wine gallonage tax by the due date will result in a 10% penalty on the tax due.