Service said to save hours in compliance work
NAPA — Filing reports and paying taxes and fees for shipping wine directly to consumers across the country can take hours of staff time a month, but a new service from a software company powering the direct-shipping workflows of many North Coast wine producers claims to have cut that time to minutes by automating much of the process.
Colorado-based ShipCompliant on Wednesday launched AutoFile, designed to automatically file reports and submit payments to state governments.
For eight years since the landmark Granholm ruling by the U.S. Supreme Court opened the potential of direct wine shipping nationwide, the company has offered compliance reporting software tools, but until now it was up to the winery user to manually print reports or enter data into state websites then write or request checks for the 40 states that now allow shipping wine directly to consumers.
AutoFile is designed to link electronically with state computer systems or send paper reports. The winery gets a month-end email with a list of reports to be filed and payments made, allowing details to be corrected if situations changed after the time the order was placed, such as a consumer picking it up at the winery rather than having it delivered to another state.
Jason Eckenroth, CEO, compared the service to online payment of bills via a bank or management of payroll taxes.
“A number of beta testers described it as putting regulatory compliance on cruise control,” said Jason Eckenroth, CEO. “Many are familiar with payroll tax, but hardly anyone one pays it [themselves], because it is done behind the scenes. We eliminate the burden of compliance without eliminating the purpose of it.”
He offered a comparison for a winery shipping wine to Washington state, which requires quarterly submissions and payments for sales and excise taxes. ShipCompliant estimated a vintner would have to commit two and a quarter hours a month and nine hours a year to reporting and remitting, while the AutoFile service would do that in about two minutes a quarter and eight minutes a year. Funds are paid from the checking account the winery designated, alleviating licensee to have a third party cut the checks.
One of the benefits of Granholm was prompting more states to allow shipping wine to consumers. But subsequent state-by-state rules on the frequency of reporting, detail of those disclosures and payments for sales, excise and other taxes have made direct-shipping compliance a daunting task for small producers.
Deanna Milano, RN, who makes wine and manages the books for 15,000-case-a-year Milano Family Winery in Hopland, participated in the testing of AutoFile. A consultant spends four to six hours monthly on reporting and paying agencies in the 14 states for the 3,000-case family brand, and for billing the winery’scustom-winemaking clients.
“Now, if she spends a half-hour to an hour on compliance, that’s a lot,” Ms. Milano said.
State governments set up the online portals for tax reporting because of the high cost of processing paper documents, according to Mr. Eckenroth. For example, it costs Virginia about $40 to process a tax payment, yet the average remittance ShipCompliant’s customers send to that state is $9. But with each state’s web portal means more time spent re-entering information. So data gateways were developed, analogous to what tax-preparation services have with the IRS and state tax agencies.
AutoFile was launched in conjunction with ShipCompliant’s ninth annual Direct Sales Conference in Napa. AutoFile is a new middle service option out three tiers of packages for the ShipCompliant Direct suite of software. For wineries producing less than 250,000 cases, the basic service with manual report-making costs $150 a month. The AutoFile package adds on that service and costs $300. The professional level adds wholesale sales tools and costs $450 a month.
With the launch, the company is waiving AutoFile setup costs and offering the first month free.
Comparison of reporting direct sales to Washington state
|Report||Without AutoFile||With AutoFile||Time saved|
|Washington sales tax (quarterly)||90 minutes||One minute||89 minutes|
|Washington excise tax (quarterly)||45 minutes||One minute||44 minutes|
|Total (quarterly)||Two hours, 15 minutes||Two minutes||Two hours, 13 minutes|
|Total (annually)||Nine hours||Eight minutes||Eight hours, 52 minutes|
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