HF1831 Summary

• Establishes the Minnesota Grape and Wine Council with 15 voting members representing wine producers, grape growers, industry associations, and state agencies to review grant applications for promotion, education, and development of Minnesota wines.

• Creates a Minnesota grape and wine account in the agricultural fund to support council-approved grants, with administrative costs recoverable from the account.

• Imposes 2.5 percent gross receipts tax on direct shippers of wine, effective for sales after June 30, 2018, with revenues deposited to the grape and wine account beginning August 1, 2018.

• Requires wineries to obtain a direct shipper license to ship up to two cases of wine per calendar year directly to Minnesota residents age 21 or older, and mandates quarterly tax reporting and a $50 annual license fee.

• Establishes sales and use tax nexus for direct shippers by treating the acquisition of a direct shipper license as regular and systematic solicitation within Minnesota, effective January 1, 2019.