A Practical Guide to Winery Compliance
Nicole has spent a decade working in compliance for some of the wine industry’s largest producers. From label approvals to federal excise tax filings, she has seen every way a winery can get it right and every way a winery can get it wrong. Now running Premier Wine Compliance, she works with small and mid-sized producers who need someone in their corner who knows what the TTB wants, what each state requires, and how to keep a winery in what she calls the “green zone.”
She sat down with Lauren Heindel to walk through winery compliance from the very beginning: what it is, how to think about it step by step, where the most common mistakes happen, and what staying compliant actually means for a winery’s bottom line.
Winery compliance sounds like a back-office problem until it becomes a front-of-house crisis. A missed filing, a mislabeled wine, or an unchecked state shipping permit can mean fines, production delays, or in the worst cases, business closure. The challenge for most small producers is that alcohol is one of the most highly regulated commodities in the United States, and the rules are not the same in every state.
In this episode, we cover:
What wine compliance is and why it directly affects your profitability, not just your legal standing
The step-by-step compliance framework Nicole uses with new winery clients, from forming your LLC through your first sales
How label compliance works, what a COLA is, and when you actually need to get a new one
How state laws govern where and how you can sell your wine, including the quirky realities of direct-to-consumer shipping
The TTB 5120.17 report, who needs to file it, and the most common mistake that causes inaccurate filings
How to keep your winery software data clean so your compliance reports are actually correct
What is winery compliance, and why does it affect profitability?
Wine compliance is the full set of rules, laws, and regulations that govern how wine is produced, labeled, and sold. Those rules come from multiple directions at once: the TTB (Alcohol and Tobacco Tax and Trade Bureau) at the federal level, the FDA, state liquor control boards, and individual city or county requirements depending on where you operate and where you sell.
Because alcohol is more heavily regulated than almost any other consumer product, the consequences of getting it wrong are proportionally serious. Fines for late or inaccurate filings compound quickly. Filing late is one charge. Paying late is another. Interest accrues on top of both. For a small producer, those charges add up fast.
Starting in the green zone and moving forward is really important. It's very easy to get behind, and people are often just nervous about it.
Nicole , Owner
Premier Wine Compliance
The connection between compliance and profitability is direct. Wineries that track production and sales data accurately pay the right amount of excise tax, no more. Those that miscode products or fail to connect sales data to production reports often overpay without realizing it. Nicole’s point is simple: being compliant is not just about avoiding penalties. It is about making sure the financial foundation of the business is built on accurate numbers.
If you are a small producer filing the TTB 5120.17 report annually, the single most important thing you can do is make sure your winery management software is coding products correctly before the filing period comes around. Fixing miscoded data retroactively is far more work than setting it up right the first time.
The step-by-step compliance framework for new wineries and brands
Nicole uses a stairs analogy to explain the compliance journey to new clients, because the steps build on each other and skipping one causes problems downstream.
The first step is the business itself: forming your LLC, getting your EIN, and having a clear picture of what you are going to produce and how much. That production forecast matters immediately because it affects your label, your glass order, your marketing timeline, and your compliance filings. Everything downstream depends on having a realistic sense of volume.
The second and third steps happen in tandem. You need a state license for any state where you will produce or store alcohol, and you need your TTB Basic Permit from the federal government. These are not sequential; you apply for both at the same time, and waiting on one does not mean delaying the other.
Step four is deciding how and where you will actually make the wine. The options matter from a compliance standpoint because they carry different licensing and reporting requirements. You can produce at your own facility, use a custom crush arrangement, or use an alternating proprietorship (AP), which is a setup where a larger host winery rents production space and equipment to smaller producers who want access to better infrastructure without owning a full facility.
Alcohol is one of the most highly regulated commodities in the United States.
Nicole , Owner
Premier Wine Compliance
The final steps involve labeling and sales. Label compliance requires getting a COLA (Certificate of Label Approval) from the TTB for each wine, and then meeting any state-specific requirements for markets you plan to enter. Sales compliance means understanding what permits and registrations you need for each channel, whether that is direct to consumer, wholesale, or through a distributor.
Nicole recommends working with a compliance consultant at the label design stage, not after the artwork is finished. Requirements vary by AVA, varietal, and market. Changes like CRV information and UPC requirements have shifted in recent years, and catching a compliance issue before printing is significantly cheaper than after.
Label compliance: COLAs, AVA requirements, and what actually changes year to year
Getting your wine label approved is one of the first concrete compliance tasks a new producer faces, and it trips people up more often than it should because the requirements are more specific than they appear.
Every wine label that enters interstate commerce needs a COLA from the TTB. The COLA certifies that the label meets federal requirements for mandatory information: alcohol content, net contents, government health warning, the name and address of the bottler, and the class and type of wine. Beyond the federal baseline, individual states can layer on additional requirements, and those vary widely.
The good news is that you do not need a new COLA every year simply because the vintage changes. As long as the appellation, the varietal composition, and the fundamental label information stay consistent, the existing COLA covers you. You update the vintage date without going back through the approval process.
Where wineries run into trouble is when they make changes to the wine itself, the sourcing, or the blend and do not update the label to reflect those changes. AVA labeling rules require that a certain percentage of the fruit actually comes from that appellation. If your sourcing shifts and your label does not, you have a compliance problem.
Nicole recommends keeping a compliance record for every COLA you hold, including when it was issued, what wine it covers, and any changes made to that wine since approval. This documentation becomes critical during an audit, when you may need to account for wines going back several vintages.
Selling your wine: state laws, DTC shipping, and the reality of a 50-state patchwork
After Prohibition, the United States gave each state the authority to set its own alcohol production and sales laws. That decision is still shaping the wine industry today, and it is the single biggest source of compliance complexity for producers who want to sell beyond their home state.
Some states are relatively open. Florida, for example, does not require a specific direct-to-consumer shipping license, though you do need to collect and remit excise tax and sales tax. Others, like Tennessee, require licenses at every point in the supply chain: the producer needs one, the warehouse shipping the wine needs one, and even the carriers like UPS and FedEx need licenses to legally deliver wine in that state.
There are states that are a little bit stricter, like Tennessee, where every person who touches the wine needs a license.
Nicole , Owner
Premier Wine Compliance
Ten years ago, direct-to-consumer shipping was legal in only about fifteen states. The number has grown substantially since then, and DTC is now a core revenue channel for most small and mid-sized producers. But each state you ship into has its own permit requirements, tax rates, and reporting obligations. Selling in twenty states means maintaining twenty different compliance relationships.
Before you start shipping to a new state, Nicole recommends confirming three things: whether you need a DTC shipping permit for that state, what the excise and sales tax rates are and how to remit them, and whether the state requires brand registration. Getting this right before the first shipment goes out is far easier than cleaning up compliance violations after the fact.
Record keeping, the 5120.17 report, and the most common compliance mistake
If there is one thing Nicole comes back to repeatedly when talking about winery compliance, it is the importance of keeping accurate production and sales records from day one. The TTB can audit a winery at any time, and they are thorough. They can pull a bottle off your website, verify the label information, and ask you to account for every gallon of that wine from fermentation through sale.
The primary federal reporting document for most producers is the TTB Form 5120.17, the Wine Premises Operations Report. For producers under 10,000 cases, this is typically an annual filing. Larger producers may file monthly or on other schedules that the TTB assigns. The report covers everything that happened on your wine premises: wine received, produced, bottled, removed for sale, and any adjustments or losses.
The most common mistake Nicole sees is mislabeling or miscoding wine in a winery’s software system. The most frequent version of this involves sparkling wine.
Sparkling wine is its own separate category both federally and in most states. It has a different excise tax component and it gets labeled differently on your production reports as well. Usually people put it in the over or under category for alcohol instead.
Nicole , Owner
Premier Wine Compliance
That miscoding cascades. If sparkling wine is coded as still wine in your winery management software, your 5120.17 report reflects that error, your excise tax calculation is wrong, and you either overpay or underpay. Neither is good, and fixing it after a filing is more work than getting it right before.
The quality of your compliance reports is only as good as the quality of your data. Before each filing period, Nicole recommends doing a coding review in your winery management software: confirm that all products are categorized correctly, that sales data is linked to the right production records, and that any sparkling wine is coded as sparkling. Fifteen minutes of review can prevent hours of correction work later.
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Frequently Asked Questions about Winery Compliance
What is wine compliance? +
Wine compliance is the set of rules, laws, and regulations governing how wine is produced, labeled, and sold. These requirements come from the federal TTB, the FDA, and individual state liquor control boards. Because alcohol is among the most highly regulated commodities in the United States, wineries must maintain licenses, file production and sales reports, and comply with labeling requirements across every state where they operate or sell.
What is a COLA for wine labels? +
A COLA is a Certificate of Label Approval issued by the TTB. Any wine that enters interstate commerce in the United States requires a COLA confirming that the label meets federal mandatory requirements, including the government health warning, alcohol content, net contents, and bottler information. You do not need a new COLA every year if the wine and its sourcing remain consistent. You apply for a new COLA when the appellation, varietal composition, or other label-qualifying information changes.
What is the TTB 5120.17 report? +
The TTB Form 5120.17, known as the Wine Premises Operations Report, is the primary federal compliance filing for wine producers. It documents all wine activity on your premises during the reporting period: wine received, produced, bottled, removed for sale, and any losses or adjustments. Most producers under 10,000 cases file annually. Larger producers may be required to file monthly. Penalties for late or inaccurate filing include flat fees, interest, and separate charges for both the failure to file and the failure to pay on time.
What is an alternating proprietorship (AP) in wine? +
An alternating proprietorship is a production arrangement where a larger host winery owns the facility and equipment and rents production space and usage to smaller producers. The smaller producer (the alternating proprietor) has its own TTB permit and produces wine under its own label, but shares the physical space and equipment with the host winery. APs allow small producers to access better equipment and established infrastructure without the capital cost of building or buying their own facility.
How do wineries comply with direct-to-consumer shipping laws? +
Direct-to-consumer shipping compliance varies by state. Each state sets its own rules about whether out-of-state wineries can ship directly to consumers, what permits are required, and what taxes must be collected and remitted. Some states require only that you register and pay excise and sales tax. Others require a specific DTC shipping license. A few require licenses at every point in the supply chain, including the carrier. Before shipping to any new state, confirm the permit requirements, applicable tax rates, and any reporting obligations for that market.