Archive for February, 2006
‘Honor System’ in Florida
February 27th, 2006
Wineries shipping to Florida are currently on the ‘honor system’ until permanent legislation is passed. A bill was introduced recently that would establish a permit system, excise tax, and sales tax.
Indiana wineries reach compromise… but Senator kills wine bill
February 25th, 2006
Shortly after a compromise was reached in Indiana that would allow direct shipments with a 24 case per year limit per individual and a 1,000 case limit per winery, Senate President Pro Tempore Robert D. Garton sent the bill to the Senate Rules Committee, which is considered a “graveyard for legislation”.
Instead of helping to shape a compromise that would benefit all parties, Garton pushed the decision back on the courts:
We are not the judicial branch of government,” said Garton, R-Columbus. “It will not be considered further by the Senate this year.
Are you kidding? This guy must be in the pocket of the Wine and Spirits Wholesalers of Indiana
Read more here.
FedEx to allow Florida shipping March 1st
February 25th, 2006
Flip-flop by Rendell gives hope to wineries
February 22nd, 2006
Earlier we noted that Pennsylvania Governor Rendell opposed direct wine shipments because they would increase the chance that minors receive alcohol. After taking a lot of heat for that “colossal lie”, Rendell changed his tune and is now saying that it’s all about state revenue. “The Pennsylvania Liquor Control Board, which manages the state’s 640 liquor stores, generated $373.6 million in taxes and profits on $1.5 billion in sales during fiscal 2004-05.” That is 25% of sales.
Rendell is concerned about “slippage”, or lost revenues from wineries that might not report and pay taxes on shipments made directly to consumers. But this issue has been addressed by a number of different states, including New York, Connecticut, and Texas. States can require wineries to obtain a permit for direct shipping and can also charge a permit fee. They can collect excise taxes and sales taxes as they see fit and require wineries to report every shipment that they make into the state. They can even require the common carriers to get a copy of the direct shippping permit from each winery, collect an adult signature on delivery and report all shipments that they make from every winery, listing the permit number. The state can revoke the direct shipping permit of any winery in violation of the rules.
New Hampshire, New York, Connecticut, and Texas have proven that allowing direct shipments while preventing the sale of alcohol to minors and gaining revenue in the process are not mutually exclusive concepts.
Read more about PA here.
Rendell opposes direct shipments
February 20th, 2006
Pennsylvania Governor Rendell wants to “maintain the state system” where consumers that order out of state wine must pick them up at a state-controlled liquor store. In this system, consumers must pay an 18 % state tax, a 6% sales tax, and a $4.50 handling fee. The governor’s office claims that this is necessary to prevent the sale of alcohol to minors.
We’ve refuted this argument in the past, but I love the way that Bill Nelson of Wine America puts it: “That’s just a colossal lie…The minors thing has been debunked in all the other states that have direct shipping.”
MA Congress overrides Romney veto, court challenge likely
February 20th, 2006
The Massachusetts House and Senate overrode a veto by Governor Milt Romney , writing into law a bill that will allow small farm wineries that produce less than 30,00 gallons per year to ship directly to consumers. It also allows residents to take home bottles of wine purchased at restaurants if the restaurant re-corks the bottle.
This ruling will likely face a court challenge from consumer and industry groups because it treats small wineries differently than medium and large wineries.
Do these “small farm winery” bills make sense? With these new rules, states are treating out-of-state wineries and in-state wineries evenly and are technically probably compliant with Granholm, but different sized wineries now get separate sets of rules. This doesn’t seem sustainable.
Part of the argument for small farm bills is that the small wineries can not afford the three-tier distribution system. This is true, but it’s not the point. MA is now protecting both small wineries and distributors when they should instead let the market forces play out. This will lead to more choices for consumers as well as lower prices.
Competing bills in Kentucky
February 18th, 2006
Two competing bills are alive in Kentucky, but neither are very favorable for wineries. One that made it out of state House committee would only allow onsite sales for small farm wineries. The second made it through the state Senate and would force all wineries to use wholesalers.
Florida officially opens
February 17th, 2006
In a letter to the Wine Institute yesterday, Simone Marstiller, Secretary of Florida�s Department of Business and Professional Regulation, announced that out-of-state wineries can officially make wine shipments into the state of Florida.
In August, a U.S. District Court Judge ruled in the case of Bainbridge, et al. v. Turner that Florida’s wine shipping laws were unconsitutional. Since then, the Wine Institute recommended that California wineries should not ship wine into Florida until more permanent regulations were established. However, in a memo to members yesterday, Wine Institute President Bobby Koch gave the official green light to wineries to ship into Florida. You can see a copy of this memo here.
The Florida Department of Business and Professional Regulation - Division of Alcoholic Beverages and Tobacco issued a special memo for out-of-state wineries on their website. Click here to view the memo. Here are a few highlights from the new rules:
- Sales/Use Tax: “Sales and use tax must be paid to the Florida Department of Revenue by consumers for any wine purchased from out of state entities.”
- Excise Tax: “Excise tax must be paid to the Florida Department of Business and Professional Regulation by wineries who sell wine directly to consumers in Florida. The report of all sales from wineries and the applicable excise taxes must be submitted to the DBPR Division of Alcoholic Beverages and Tobacco by the 10th of the month for any sales made in the previous month.” Click here to view the excise tax form.
- Reporting: Wineries must also submit a schedule of shipments made into Florida with the excise tax form. Click here to see the reporting form.
Small farm winery bill passes Arizona Senate committee
February 17th, 2006
Three wine shipping bills were proposed in Arizona, and one made it out of the Senate committee. This bill would allow small farm wineries that produce less then 50,000 gallons each year to make offsite shipments of wine to Arizona consumers.
The Arizona distributors, of course, are pulling out all the stops to prohibit direct shipments and stifle free trade. Their argument, which he have heard in every single state, is that they want to prevent the sale of alcohol to minors.
That argument just doesn’t fly anymore. States have a number of measures that they can use to prevent sales to minors. Distributors just want to protect their state-mandated monopolies, which hurt small wineries and consumers.
Read more about the new bill here.
Maine in play
February 16th, 2006
A new bill would open up shipments to Maine, which is currently a Prohibited state.
See the story here.
Wyoming close to compliance
February 16th, 2006
A Wyoming bill unanimously passed the House Corporations, Elections and Political Subdivisions Committee that would bring Wyoming to compliance with Granholm. Wyoming is currently a limited direct states that allows licensed out-of-state wineries to ship up to two cases per year directly to consumers. However, in-state wineries are treated differently. The new legislation effectively applies the current legislation to in-state wineries as well.
You can read more here.
FedEx approved to ship wine to New York
February 10th, 2006
The State of New York Division of Alcoholic Beverage yesterday officially approved FedEx to make wine shipments directly to New York consumers. Carriers approved to ship to New York are required to “capture and maintain specific information, including a signature and the New York Out-of-State Direct Shipper�s license
number of out-of-state wineries.”
Both FedEx and UPS, who received approval in December, struggled with the approval process in New York.
See the press release from the NY ABC here
To view the FedEx wine shipping state pairing guide, click here then click on the Wine Shipping State Pairing Guide link.
South Dakota bill killed in committee
February 9th, 2006
House Bill 1187 would have allowed for limited direct shipments to consumers in South Dakota, but was shot down by the House Commerce Committee, with heavy oposition from the three-tier lobby.
Idaho to uncork wine shipping legislation
February 8th, 2006
Add Idaho to the long list of states that are currently revisiting their wine direct shipping legislation. The proposed legislation is being pushed by the Wine Institute and would create a limited direct model with a $50 permit and a customer aggregate volume limit of 24 cases per year.
Maryland comptroller blocks self-distribution
February 8th, 2006
From the Baltimore Business Journal:
Maryland wineries will be prevented from directly selling their wines to retail stores and restaurants starting March 31, according to an administrative ruling the state’s comptroller’s office issued earlier this month.
Illinois wineries fight back
February 7th, 2006
With the help of the press, wineries in Illiinois turn the tables on the powerful Associated Beer Distributors of Illinois.
Florida moves one step closer
February 7th, 2006
Pending legislation in Florida would create a limited direct model for shipping wine directly to consumers where out-of-state wineries would need to obtain a $100 permit and pay the appropriate taxes.
“Vino Limbo” in Pennsylvania
February 4th, 2006
Paul Nussbaum of the Philadelphia Inquirer gives good insight into the “wine-law chaos” in PA.
Kansas to open?
February 3rd, 2006
We noted earlier that Kansas was revisiting their laws and leaning towards prohibition. However, a new bill sent to the Senate would open up direct shipments to retailers and consumers, as long as the consumers pick up the wine at a licensed liquor store. Lawmakers in Kansas are keeping a close eye on the Costco case in Washington.
FedEx announces wine shipping website
February 1st, 2006
FedEx recently unveiled its new wine shipping website. You can view the site by going to http://fedex.com/us/wine/ . On this site you will find some good information about the FedEx wine shipping policies and requirements. There is also a state pairing guide showing the states to which FedEx ships for direct to consumer offsite, onsite, and licensee to licensee shipments.
