Archive for February 7th, 2007
Washington Excise Tax Confusion
February 7th, 2007
We’ve had number of questions recently from wineries that are confused about the excise tax requirements in Washington. Apparently, the Washington LCB is now just outright rejecting winery submissions if they do not use the correct form.
To provide a little background on this issue, Washington adopted a limited direct model on July 1st, 2006. At that time, out-of-state wineries could apply for a wine shippers permit if they planned to only ship directly to Washington consumers or for a Certificate of Approval (COA) if they are selling to distributors or directly to retailers. COA holders can get an additional no-fee endorsement to also ship wine directly to consumers. Many out-of-state wineries held a COA prior to the July 1st changeover from reciprocity to the permit system.
The question is whether a given winery should submit FORM LIQ-870 or FORM LIQ-778. The answer, according to the Washington LCB, is straightforward. If you are a COA holder, your name will appear on this list and you should file from LIQ-778 and report your direct to consumer sales on line 10. If you are a wine shippers permit holder only, your name should appear on this list and you should fill out from LIQ-870.
Oh, and just in case you weren’t confused before, Washington calls their sales tax reports “Combined Excise Tax Returns” and their excise tax forms “Summary Tax Reports”.
News from Kentucky
February 7th, 2007
The headline said, “State drops out of wine suit: Small operators can ship directly,” but the reported change in direct shipment rights occurred in December of last year. What’s new is that the state has abandoned its appeal, leaving the wholesaler trade association to continue alone in attempting to persuade the Court of Appeals to reverse the pro-commerce part of the Huber/Cherry Hill ruling. (The ruling is not entirely favorable; see the current revision of Wine Distribution Notes for details.) The practical effect is that whatever chance the wholesalers may have had to get a stay from the Court of Appeals, to render the lower court decision ineffective during the appeal, is vastly reduced by the acquiescence of the state in the December judgment.
