Applying for a Winery Permit

You can apply for a permit:

• individually (a sole proprietor);
• as a partnership between two people or two companies; or
• as a legal entity such as a corporation or limited liability company (LLC).

Selecting the right business structure is important to your business’s success. Each structure has different legal and tax implications you should consider. However, we recommend forming a business entity to operate your winery to help you avoid personal liabilities. In addition, for more information on the different business structures and how to decide which is the best fit for you, click here.

Once you select your business structure you must form the business by filing documentation with the appropriate state entity, usually the secretary of state. The secretary of state will provide you with a certificate showing that your business has been registered. You will need to file that documentation with the TTB.

If you are opening the business with partners or other co-owners, you will also need to provide the TTB with information detailing each partner’s ownership interest and role in the business.

An EIN is a nine-digit number used by the IRS to identify your business entity. An EIN is something all business entities need for filing taxes. You will also need an EIN to apply for a DSP permit. We strongly recommend that you form a relationship with a CPA early on. A CPA will help you set up a bookkeeping system and obtain your EIN. However, you can also get an EIN yourself. Just go to: https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online

You may want to operate your brewery under a name other than your business name. This is commonly known as operating under an “assumed business name,” a DBA (doing business as), a fictitious business name, or a trade name. To operate under an assumed business name, you must file an application with the appropriate state office.

There are good reasons for using a DBA. First, DBAs allow you to operate multiple businesses without having to create separate legally entities for each. They also allow you to select easily recognizable and memorable names for each business you operate. For example, Doe Family, LLC may own a brewery and winery which they operate as Jane’s Brewpub and Janie’s Winery, respectively. Jane’s Brewpub and Janie’s Winery are assumed business names.

The TTB requires you to file state-issued certificates showing you registered your assumed business name with your permit application.

Along with your winery name, you should select your logo early on. Logo selection isn’t essential for filing an application with the TTB, but it is essential to developing your brand.

Your name and logo are the most prominent things identifying you and separating you from your competitors in the alcohol beverage industry. You’ll almost certainly want to include them on your labels and on other products to advertise your brand.

Do not rush this part of setting up your new business. By far the most common problem we see in new wineries after they obtain a permit is that they realize all too late that they are unintentionally infringing another alcoholic-beverage manufacturer’s trademarks. In an industry as crowded as alcoholic beverages, this is exceedingly common. If another company uses the same or a similar logo or name, it could confuse customers or dilute your brand. Perhaps worse, a motivated competitor using the trademark before you could threaten you with litigation for infringement. That is why properly researching your prospective marks and registering them is so important. MWS Rose’s Intellectual Property practice group can help you trademark and protect your brand.

If another company uses the same or a similar logo or name, it could confuse customers or dilute your brand. Perhaps worse, a motivated competitor using the trademark before you could threaten you with litigation for infringement. That is why properly researching your prospective marks and registering them is so important. MWS Rose’s Intellectual Property practice group can help you trademark and protect your brand.

You will need to select the location of your winery and build out your premises before applying for a permit. When you apply for your permit, you must describe each tract of land comprising your wine premises using directions and distance. You must also clearly describe the area of the wine premises to be used as a bonded wine premises, and your method for securing and protecting the property and wine. If you use only a portion of a building for your winery, you will also be required to describe the activities conducted in the adjoining portions of the building.

Wherever you locate your winery or bonded wine cellar, you will need a copy of a lease for the space or a deed for the property. You will have to show the TTB that you are legally entitled to occupy the location when the permit is to be approved.

As we noted above, starting a winery can be very expensive. You will likely need to raise capital to get your winery started. The capital you need may be in the form of equity (selling an ownership interest in your business), debt (a loan), or a combination of the two. When someone loans a business money, the business executes an instrument such as a promissory note or bond setting forth the business’s repayment obligations. The TTB will require you to file those instruments with your permit application.

The TTB does not require you to show that you complied with state or federal securities law. However, you are still required to comply with those laws and should certainly ensure that you are doing so when you borrow money or sell equity in your business. Securities regulations are especially important when borrowing money from or selling equity to investors who will not actively participate in managing your business. If you are required to comply with any securities law and fail to do so, you could be subject to administrative, civil, or criminal sanction. Consult a knowledgeable lawyer whenever you raise money for a new business.

If you are producing wine, you must provide a step-by-step description of the procedure you will use. There are several types of wine you can produce, and the procedure for making each is somewhat different. Accordingly, you will need to decide the kinds of wine you plan to make and understand how to make each before applying for a permit.

Under federal law, you can produce the following kinds of wine:

• Natural wine: Natural wine is the product of the juice or must of sound, ripe grapes or other sound, ripe fruit.
• Special natural wine: Special natural wine is wine produced from a base of natural wine to which natural flavorings are added. The added flavoring may include natural herbs, spices, fruit juices, natural aromatic, natural essences, or other natural flavoring.
• Agricultural wine: Agricultural wine is wine that is produced from suitable agricultural products other than the juice of fruit, such as honey wine.
• Other wine: Other wines include wines such as high fermentation wine, heavy bodied blending wine, Spanish type blending sherry, wine products not for beverage use, and vinegar stock.

You don’t need to have your equipment installed or even at your winery when you file your application. You will, however, be required to submit information about your major equipment such as: size, type, intended use, and unique serial number. We recommend firming this up with an equipment manufacturer before preparing your application.

The TTB does have an online system for applicants to use. However, the system can be confusing. It requires you to accurately describe your operations, provide the information identified above, and to submit a plant floorplan that complies with the TTB’s excise tax regulations.

Starting a winery can be complicated. We’re here to help you with your federal permitting and other legal needs. If you have questions or would like to discuss our rates or packages, please do not hesitate to contact us.