Archive for September, 2007
Indiana and Oregon – starkly different paths to wine shipping laws
September 11th, 2007
Wine Spectator Online has a good article that compares the different paths that Indiana and Oregon took in arriving at their new rules. It’s definitely worth a read. Here are some excerpts:
Advocates of direct-to-consumer wine shipments recently scored two points in the win column: Oregon and Indiana. Both states now have more open direct-shipping laws, though they came about in starkly different ways and, unfortunately for Indiana wine lovers, probably face different levels of success in the long term. But for now, consumers in both states can legally receive wine shipments directly from in- and out-of-state wineries.
Because the judge focused on those two particular elements of Indiana’s law, the state’s existing direct-shipping rules remain intact. So long as the wineries are willing to ship and the courier services such as FedEx and UPS are willing to deliver, direct wine shipments to Indiana residents can commence. Unfortunately, however, Indiana consumers can’t count their chickens just yet. Since the law is written to limit individual households to 24 cases per year rather than the wineries themselves, the wineries have no way of knowing if they’ll be sending, say, the 25th case to a particular Indiana resident, and therefore violating the law. It’s a risk some wineries are willing to take-but not all of them.
Click here to read the full article.
Virginia Out-of-State Winery Shipper's Application Checklist
September 6th, 2007
The Shipper’s application is titled “Retail License Application Parts I and II” (rev. 06/2007).
Please follow the steps below to ensure your application can be processed and approved in a timely manner. Applicants must have already completed the VA Sales Tax Application and received a VA sales tax number.
RETAIL LICENSE APPLICATION – PART I
- Specify type of license applied for as “Wine Shipper Out-of-State” (question 8 )
- Select “Shipper” as Type of Business (question 15)
RETAIL LICENSE APPLICATION – PART II
- Specify type of license applied for as “Wine Shipper “Out-of-State” (question 2)
- Questions 4-5 and 7-9 are not applicable
- Question 6 requires a “general statement” only
- Only 2 parts of question 10 apply. Attach a copy of the FEIN certificate and a copy of your VA sales tax certificate.
- Question 18 is not applicable
- Posting and Publishing and ABC Notice Sections are not applicable (pages 9-11)
Attach the following documents to your application:
- Charter for your corporation or LLC
- Articles of Incorporation for your corporation, or Articles of Organization for your LLC
- Alcoholic beverage license from your state, if applicable
- Copy of Federal alcohol basic permit
- The completed personal data sheet, as found in the application, for each officer, director, or shareholder owning 10% or more of the stock. Although a criminal history is not required, the completed sheets for all of the above persons are necessary to complete the process
- Brand names of product for shipment
- If shipping products from other than your winery, letter giving approval for shipment from brand owner
- If your product is already sold in Virginia, letter to Virginia wholesaler(s) currently distributing your product informing them of your application for a license
- Federal COLA (Certificate of Label Approval) for each brand you intend to ship, if not already a brand being sold in Virginia
- The license tax per year is $65.00, which is in addition to the application fee of $65.00.
Virginia Out-of-State Winery Shipper’s Application Checklist
September 6th, 2007
The Shipper’s application is titled “Retail License Application Parts I and II” (rev. 06/2007).
Please follow the steps below to ensure your application can be processed and approved in a timely manner. Applicants must have already completed the VA Sales Tax Application and received a VA sales tax number.
RETAIL LICENSE APPLICATION – PART I
- Specify type of license applied for as “Wine Shipper Out-of-State” (question 8 )
- Select “Shipper” as Type of Business (question 15)
RETAIL LICENSE APPLICATION – PART II
- Specify type of license applied for as “Wine Shipper “Out-of-State” (question 2)
- Questions 4-5 and 7-9 are not applicable
- Question 6 requires a “general statement” only
- Only 2 parts of question 10 apply. Attach a copy of the FEIN certificate and a copy of your VA sales tax certificate.
- Question 18 is not applicable
- Posting and Publishing and ABC Notice Sections are not applicable (pages 9-11)
Attach the following documents to your application:
- Charter for your corporation or LLC
- Articles of Incorporation for your corporation, or Articles of Organization for your LLC
- Alcoholic beverage license from your state, if applicable
- Copy of Federal alcohol basic permit
- The completed personal data sheet, as found in the application, for each officer, director, or shareholder owning 10% or more of the stock. Although a criminal history is not required, the completed sheets for all of the above persons are necessary to complete the process
- Brand names of product for shipment
- If shipping products from other than your winery, letter giving approval for shipment from brand owner
- If your product is already sold in Virginia, letter to Virginia wholesaler(s) currently distributing your product informing them of your application for a license
- Federal COLA (Certificate of Label Approval) for each brand you intend to ship, if not already a brand being sold in Virginia
- The license tax per year is $65.00, which is in addition to the application fee of $65.00.
Parts of Indiana law declared unconstitutional. Can I ship there now?
September 4th, 2007
Earlier this year, we discussed the “new vintage” of wine litigation that was taking place across the country. As background, since the 2005 Granholm decision, the wine wholesale lobby has recognized that they must pick their battles, and therefore concede the ability for wineries to ship directly to consumers in most states. Recognizing they would be hard pressed to pass legislation that would prohibit direct shipping outright, they instead began introducing provisions in direct shipping bills that created de facto discrimination.
Two such examples could be found in the text of Indiana HB 1016. The first was a previous visit requirement in Indiana that said a Hoosier resident must first make a physical visit to a winery before placing an off-site (Internet, wine club, phone, etc.) order. The second was a ridiculous requirement that prohibited wineries that were permitted in their state to wholesale wine (this is the case in California, Washington, and Oregon, which represent 90% of the wine produced in this country) from obtaining a Direct Wine Seller’s Permit.
On Wednesday, Judge John Daniel Tinder of the U.S. District Court in the Southern District of Indiana ruled on these forms of discrimination in Baude v. Heath.
IT IS THEREFORE ORDERED, ADJUDGED, AND DECLARED that the Indiana Code Section 7.1-3-26-7(a)(6) is unconstitutional insofar as it bars wineries that possess wholesale privileges in states other than Indiana from seeking a Direct Wine Seller’s permit. Defendant David L. Heath, in his official capacity as Chairman of the Indiana Alcohol and Tobacco Commission, is ENJOINED from enforcing this statute to that extent.
IT IS FURTHER ORDERED, ADJUDGED, AND DECLARED that Indiana Code Sections 7.1-3-26-6(4) and 7.1-3-26-9(1)(A) are unconstitutional insofar as they require an initial transaction to be made physically in person between customers and permit holders before a Direct Wine Seller permit holder may ship its products directly to an Indiana resident. Defendant Heath, in his official capacity as Chairman of the Indiana Alcohol and Tobacco Commission, is ENJOINED from enforcing these statutes to that extent.
In the decision, Tinder even went so far as to say “The wholesale prohibition is not aimed so much at protecting Indiana’s wineries as it is at guarding the bank accounts of Indiana’s wholesalers.” Wow! These forms of discrimination can no longer be part of the wholesaler arsenal because they violate the Commerce Clause of the U.S. Constitution.
This is a very important decision, and many are rightfully celebrating the victory for wineries and consumers. However, a major roadblock to shipping wine into Indiana remains in place. HB 1016 stipulates that “A consumer may not receive more than two hundred sixteen (216) liters of wine in total from one (1) or more direct wine sellers in a calendar year.”
As we’ve discussed before, most wineries will continue to choose not to ship to Indiana consumers because they can’t possibly know if the consumer has already received their 24 case allotment. FedEx and UPS will continue to ship to Indiana, and some wineries will likely assume the risk and ship to Indiana consumers anyway. But the majority of wineries will opt out until the Indiana ABC clarifies their enforcement policies on this matter. Hopefully the Indiana legislature will address this issue directly in the next session.
Litigation and legislation battles continue in other states that will further shake up the wine shipping landscape. For example, in Family Winemakers of California v. Jenkins, the Family Winemakers seek to overturn the Massachusetts provision that prohibits wineries that produce more than 30,000 gallons from receiving a direct shipping permit. Massachusetts also has a law similar to Indiana where a MA resident may receive no more than 240 liters across all wineries.
