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.