Untangling the complex world of wine direct shipping and compliance
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    Wine Shipping Permit System Passes via Badger Budget Bill

    October 25th, 2007
    By Jeff Carroll - VP of Compliance, ShipCompliant

    Governor Jim Doyle is expected to sign into law Senate Bill 40, the Wisconsin Budget Bill that passed both chambers of the state congress on Tuesday. Within an amendment to the budget bill are provisions that would strike the existing reciprocal statutes for direct shipping and insert language that creates a permit system for wineries from any state. If signed by Governor Doyle (which could happen “within days“), the budget bill would take effect seven days later.

    As of today, Wisconsin is one of only three states, including Iowa and New Mexico, that have reciprocity requirements for wine shipping. Oregon and Illinois also recently passed legislation that removes reciprocity and creates permit systems that will take effect on January 1st and June 1st, respectively. Wisconsin currently only has an official reciprocity arrangement with the state of California. Because of this, wineries in other states technically can not ship into Wisconsin.

    The new law would establish an annual volume limit:

    No individual in this state may receive more than 108 liters of wine annually shipped under authority of the section. Each individual shall be responsible for compliance with this annual limit.

    and a tiered permit system:

    (a) For a permittee that ships more than 90 liters of wine annually to individuals in this state, $100.
    (b) For a permittee that ships not less than 27 liters nor more than 90 liters of wine annually to individuals in this state, $50.
    (c) For a permittee that ships less than 27 liters of wine annually to individuals in this state, $10.

    See our previous post for background on this bill. Key changes from the original version passed by the Senate make this bill much less onerous.

    2 Responses to “Wine Shipping Permit System Passes via Badger Budget Bill”

    1. Fred S. says:

      According to the Milwaukee Journal website, Governor Doyle signed the bill this morning with no line item vetoes affecting this part of the legislation. I guess the two best parts are that the senate’s $1000 “protection” fee was lowered to $100 and the verification responsibility is on the individual and not the winery. It looks like the wholesalers can now focus their entire attention on providing bland products for the masses.

    2. Fred S. says:

      Oops, new update on the MJ blog affecting WI wineries:

      A state law that would have forced Wisconsin wineries to use wholesalers to sell their wines was vetoed today by Gov. Jim Doyle.

      “That’s great news,” said Kyle Gomon, co-owner of Mason Creek Winery, in Pewaukee. Gomon said that proposal “could have had a really negative effect on our business, and on Wisconsin wineries as a whole.”

      Many Wisconsin wineries use wholesalers, which buy their vintages and then sell them to restaurants, taverns, liquor stores and other retailers. But wineries also sell directly to retailers, which bypasses the wholesaler and allows wineries to earn higher profit margins.

      Wine wholesalers say the provision is needed to comply with a 2005 U.S. Supreme Court ruling that state laws regulating alcohol shipments must provide equal treatment to in-state and out-of-state wineries. Current law allows only Wisconsin wineries, not out-of-state wineries, to sell their vintages without using wholesalers.

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