March 19th, 2006
Idaho officially removed its reciprocity language in House Bill No. 454, establishing itself as a limited direct state. Idaho joins California and Washington as reciprocal states that moved to a limited direct model to comply with Granholm. Other reciprocal states are likely soon to follow, including Colorado and Hawaii.
With the new legislation, which goes into effect on July 1st, out of state wineries can purchase a $50 annual permit to ship wine directly to Idaho consumers. Limitations include a per individual volume limit of 24 cases per year, sales and excise taxes, and an annual reporting requirement.
The Granholm case effectively established that states must treat in-state and out-of-state wineries evenhandedly. Although the Granholm opinion did not specifically address the legality of reciprocity, Idaho did not want to risk a court challenge. Check out the Statement of Purpose from the admendment to HB 454 (emphasis added):
In a recent United States Supreme Court ruling requiring equal treatment of in-state and out-of-state wineries in the direct shipment of wine to consumers, Idaho’s law needs to be changed to a permit state from a reciprocal state.
This change would be equally beneficial to Idaho wineries as to out-of-state wineries. This proposal will establish a permit system that applies the same rules to all wineries, regardless of location.
This proposal would increase the collection of sales and excise taxes on wine shipped to Idaho consumers and establish greater public safeguards to prevent wine shipments to minors. It also will create a licensing requirement and fee to support oversight of wine shipments. This will also eliminate the potential for a legal challenge to our existing law.