§ 5-01-16 — Direct sale from out-of-state person to consumer - Penalty

North Dakota § 5-01-16

• Jurisdiction: North Dakota
• Title 5: Alcoholic Beverages
• Ch. 5-01: General Provisions

Text

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
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.
a. A direct shipper shall ship all containers of alcoholic beverages shipped directly to
a resident of this state 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 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 at the rates set forth in sections 5-03-07 and 57-39.6-02.
The excise tax reports are due January fifteenth of the year following the year
sales and 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 or fulfillment houses
the licensee used for such shipments. The sales and use tax reports are due as
set forth in chapter 57-39.6. The sales and use tax reports must be in a format as
prescribed by the tax commissioner. The tax commissioner may require that the
report be submitted in an electronic format approved by the tax commissioner.
d. All alcoholic beverages that are shipped directly to a resident of this state must be
properly registered with the federal alcohol and tobacco tax and trade bureau and
must be owned by the licensed direct shipper.
6. A licensed alcohol carrier may ship alcoholic beverages into, out of, or within this state.
A licensed alcohol carrier shall pay an annual fee of one hundred dollars and obtain a
license on an application form provided by the tax commissioner and subject to any
requirements determined by the tax commissioner.
a. A licensed alcohol carrier shall ensure all containers of alcoholic beverages
shipped directly to an individual in this state are labeled with conspicuous words
"SIGNATURE OF PERSON AGE 21 OR OLDER REQUIRED FOR DELIVERY". A
licensed alcohol carrier may not deliver alcoholic beverages to a person under
twenty-one years of age, or to a person who is or appears to be in an intoxicated
state or condition. A licensed alcohol carrier shall obtain valid proof of identity and
age before delivery and shall obtain the signature of an adult as a condition of
delivery.
b. A licensed alcohol carrier shall maintain records of alcoholic beverages shipped
into, out of, or within this state which include the name of the licensed direct
shipper, the name of any licensed logistics shipper, the date of each shipment,
the recipient's name and address, and an electronic or paper form of signature
from the recipient of the alcoholic beverages. A licensed alcohol carrier shall
submit a report to the tax commissioner on a monthly basis in the form and
format prescribed by the tax commissioner. The report is due on the last day of
the month following the month of shipment. If the due date falls on a Saturday,
Sunday, or legal holiday, the due date is the first working day after the due date.
The tax commissioner may require that the report be submitted in an electronic
format approved by the tax commissioner.
c. If the tax commissioner has provided notice to a licensed alcohol carrier that a
direct shipper is not licensed, the licensed alcohol carrier must notify the direct

shipper that the direct shipper must obtain a direct shipper permit before
tendering packages to the licensed alcohol carrier for delivery. Any assessed
penalty may be waived by the tax commissioner for good cause upon request by
the licensed alcohol carrier.
7. Licensed logistics shippers must obtain a logistics shipping license from the tax
commissioner and shall pay an annual fee of one hundred dollars before making or
causing a shipment.
a. A licensed logistics shipper shall ensure all containers of alcoholic beverages
shipped directly to an individual in this state are labeled with conspicuous words
"SIGNATURE OF PERSON AGE 21 OR OLDER REQUIRED FOR DELIVERY".
b. All containers of alcoholic beverage shipped directly to a resident of this state
must be shipped using a licensed alcohol carrier as provided in subsection 6.
c. A licensed logistics shipper shall maintain records of alcoholic beverages shipped
which include the license number and name of the licensed direct shipper, the
license number and name of the licensed common carrier, the date of each
shipment, the quantity and kind of alcohol shipped, and the recipient's name and
address for each shipment. A licensed logistics shipper shall submit a report to
the tax commissioner on a monthly basis in the form and format prescribed by the
tax commissioner. The report is due on the last day of the month following the
month of shipment. If the due date falls on a Saturday, Sunday, or legal holiday,
the due date is the first working day after the due date. The tax commissioner
may require that the report be submitted in an electronic format approved by the
tax commissioner.
d. Licensed logistics shippers may not ship alcoholic beverages from unlicensed
direct shippers or through unlicensed carriers. For a violation, a licensed logistics
shipper is subject to the penalties in subsection 3.
8. The tax commissioner may initiate and maintain an action in a court of competent
jurisdiction to enjoin a violation of this section and may request award of all costs and
attorney's fees incurred by the state incidental to that action. Upon determination by
the tax commissioner that an illegal sale or shipment of alcoholic beverages has been
made to a consumer in this state by any person, the tax commissioner may notify both
the alcohol and tobacco tax and trade bureau of the United States department of the
treasury and the licensing authority for the state in which the person is domiciled that a
state law pertaining to the regulation of alcoholic beverages has been violated and
may request those agencies to take appropriate action.