Getting bonded and licensed

Setting up a winery takes a lot of paperwork. First, there's the paperwork involved in any business: incorporation (this cost us $285 since we ended up doing it expedited online), tax registration for state and federal agencies, setting up bank accounts. Then there's the alcohol licensing. The first step of that is to get a tax bond, which insures to the state and federal government that the excise tax on whatever alcohol you produce that year will be paid. The bond must be for a minimum of $1000, or as much as the tax obligation will be if it will be more than that.

We are getting our bond through an online provider called Bonds Express. The other insurance companies I contacted did not respond to me with a quote in a timely fashion, so they lose out. The fee on top of the premium is a little more than I would like, but I'm hopeful that is something I can negotiate in future after becoming an established client. It's costing us $130 at this point for the $1000 bond, which is within the range of what I'd expect. The ratio of premium and fees to bond amount should get better if and when we are taking out larger bonds for larger production runs in the coming years.

With a bond, it's possible to complete the TTB's online application (thank God for the paperwork reduction act) for a basic permit. This requires filing other online applications listing officer information for the company since we are an S-Corporation (small business corporation). Once the basic permit is approved, we can apply for COLAs (Certificates of Label Approval) for whatever labels we will use and formula approval for the different meads we will sell. With a COLA and basic permit, it's then possible to apply to the state of Illinois for our winery license (a $600 fee). With the winery license, we can apply for the self-distribution exemption which will allow us to sell to stores and customers without separate licenses, as long as we're under a certain amount of production per year. Whew! Then we're in business!

All this ought to be done by the end of the week. At that point, we can start to take orders - so our Kickstarter project will go up then, and we will post information about how to pay via paypal and order through email. Included will be requirements for us to get into each other state besides Illinois, with bonuses offered to customers who break open their state for us. Ironically, we'll be able to sell to EU citizens immediately, because the US-EC Wine Treaty provides reciprocal licensing; a courtesy not afforded to each other by the states of the USA! Shipping information for EU customers will be forthcoming as well (unfortunately, it won't be cheap unless we get a great deal more orders than we can expect at first).