North Dakota HB 1146: A BILL for an Act to amend and reenact subsections 5 and 8 of section 5‑01‑01 and sections 5‑01‑16 and 5‑02‑01 of the North Dakota Century Code, relating to direct shipment of alcoholic beverages from out of state to a retail licensee; and to provide a penalty.

Bill Text

17.0252.01000
Sixty-fifth
Legislative Assembly
of North Dakota
Introduced by
Representative Rick C. Becker
A BILL for an Act to amend and reenact subsections 5 and 8 of section 5-01-01 and sections
5-01-16 and 5-02-01 of the North Dakota Century Code, relating to direct shipment of alcoholic
beverages from out of state to a retail licensee; and to provide a penalty.
BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA:
SECTION 1. AMENDMENT. Subsections 5 and 8 of section 5-01-01 of the North Dakota
Century Code are amended and reenacted as follows:
5. "Direct shipper" means a person that is licensed by the commissioner and ships or
causes to be shipped alcoholic beverages directly into this state to a consumer for the
consumer's personal use and not for resale or to a retail licensee.
8. "Licensed alcohol carrier" means a person licensed to transport or deliver alcoholic
beverages to a consumer or to a retail licensee without first having the alcoholic
beverage delivered through a wholesaler licensed in this state.
SECTION 2. AMENDMENT. Section 05-01-16 of the North Dakota Century Code is
amended and reenacted as follows:
5-01-16. Direct sale from out-of-state person to consumer or retail licensee - Penalty.
1. A person in the business of selling alcoholic beverages may not knowingly or
intentionally ship, or cause to be shipped, any alcoholic beverage from an out-of-state
location directly to a person in this state who is not a licensed wholesaler in this state.
2. A person in the business of transporting goods may not knowingly or intentionally
transport, or cause to be transported, any alcoholic beverage directly to a person in
this state who is not a licensed wholesaler in this state.
3. For a first violation of subsection 1 or 2, the tax commissioner shall notify, by certified
mail, the person and order that person to cease and desist any shipment of alcoholic
beverages in violation of subsection 1 or 2 and shall assess a civil penalty of one
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HOUSE BILL NO. 1146

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hundred dollars for each illegal shipment. For a second violation of subsection 1 or 2,
the tax commissioner shall assess a civil penalty of two hundred dollars for each illegal
shipment. For any subsequent violation of subsection 1 or 2, the tax commissioner
shall assess a civil penalty of five hundred dollars for each illegal shipment.
4. The alcoholic beverage transported in violation of this section and the vehicle used in
violation of this section are forfeitable property under chapter 29-31.1.
5. This section does not apply to a transaction by a person holding a valid manufacturer's
or retailer's license issued by the state of its domicile and if the person obtains a direct
shipping license from and on a form prescribed by the tax commissioner before
making a shipment. The annual fee for a direct shipping license is fifty dollars.
Licensed direct shippers may sell and ship to an individual twenty-one years of age or
older 7.13 gallons [27 liters] or less of wine, two hundred eighty-eight fluid ounces
[8517.18 milliliters] or less of beer, or 2.38 gallons [9 liters] or less of any other
alcoholic beverages per month for personal use and not for resale. Licensed direct
shippers may sell and ship alcoholic beverages to a retail licensee upon receiving a
copy of the certificate issued by the attorney general to the retail licensee under
section 5 - 02 - 01.
a. A direct shipper shall ship all containers of alcoholic beverages shipped directly
to a resident of this state or a retail licensee using a licensed alcohol carrier and
may cause the alcoholic beverages to be shipped by a licensed logistics
company.
b. A direct shipper shall label all containers of alcoholic beverages shipped directly
to an individual or retail licensee in this state with conspicuous words
"SIGNATURE OF PERSON AGE 21 OR OLDER REQUIRED FOR DELIVERY".
c. A licensed direct shipper shall report and pay the wholesaler excise tax and
retailer sales taxes to the tax commissioner on all alcoholic beverages sold to
residents in this state for personal use and not for resale at the rates set forth in
sections 5-03-07 and 57-39.6-02. A licensed direct shipper shall report and pay
the wholesaler excise tax to the tax commissioner on all alcoholic beverages sold
to retail licensees in this state at the rates set forth in section 5 - 03 - 07. The excise
tax reports are due January fifteenth of the year following the year sales and
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shipments were made. When the fifteenth day of January falls on a Saturday,
Sunday, or legal holiday, the due date is the first working day thereafter. The
report must provide such detail and be in format as prescribed by the tax
commissioner and include the identification of any logistics o