Untangling the complex world of wine direct shipping and compliance
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    Wine Freedom in the South? Tennessee Direct Shipping Bill Passes the Senate

    April 27th, 2009
    By Jane Hwang - ShipCompliant Research Team

    Tennessee, one of 13 states that still bans direct-to-consumer shipping, took steps towards ending that association on April 13, 2009 when the Senate-approved Senate Bill 166, which allows direct shipments of wine. Currently, anyone who transports wine into Tennessee by bypassing the three-tier system is committing a felony (see Section 57-3-401.b of the Tennessee Code) an act that bill sponsor Senator Paul Stanley says is already widely committed. Due to this continuous violation of existing law, Senator Stanley calls SB 166 a “common-sense bill.”  Senate Bill 166 requires out-of-state wineries to obtain a $300 license non-refundable application fee and $150 annual permit fee and also sets a shipping limit of 3 cases per calendar year per individual consumer.

    During the Senate Committee hearings, there was lengthy questioning regarding enforcement mechanisms to ensure out-of-state wineries are in compliance. Senator Tim Burchett also voiced concerns about the lack of jurisdiction that the Tennessee Alcohol Beverage Commission has over out-of-state wineries, to which committee chair Senator Bill Ketron responded with a quote from Section 1.C.2 of the bill, which states that applicants must, “execute a consent to jurisdiction and venue of all actions… in the state of Tennessee.” Senator Ketron also noted other enforcement mechanisms such as a clause that makes direct shipping without a permit a Class (E) Felony. Primary Sponsor Senator Stanley addressed the doubts about enforcement and compliance by pointing to many other states that have successfully instituted and enforced direct shipping laws. In addition to mentioning the success of other direct-shipping states, bill supporters also noted that SB166 could bring in an estimated $10 million in additional annual revenue.

    The approved version of the bill was passed in the Senate by a 22-8 margin with two amendments, imposed by the Senate Finance, Ways and Means committee. The first amendment reduced the total annual wine shipments allowed to one resident to 27-Liters from the original 108 Liters per year, with a one case per month limit. The second amendment was apparently inserted with no specific purpose except to appease the three-tier distribution system by stating that nothing in the direct shipping bill is meant to “diminish the three-tiered scheme.” The Senate-approved version of SB 166 also requires wineries to report the appropriate sales and gallonage taxes, and direct shippers must keep records of all shipments in case the Tennessee Alcoholic Beverage Commission requests such information. Now that the bill has moved through the Senate, it awaits discussion and approval by the House Government Operations Committee.

    In February, Tennessee’s Attorney General chose to level-down by banning all direct-to-consumer shipments and transports of wine for personal use. Only two months later, however, the passage of SB 166 in the Senate demonstrates willingness to accommodate consumer demand by opening up the state to direct shipping.

    4 Responses to “Wine Freedom in the South? Tennessee Direct Shipping Bill Passes the Senate”

    1. [...] event for wineries across the country. A bill that would allow winery-to-consumer shipping in Tennessee is also waiting for a signature from their governor. If both of these measures are signed into law, [...]

    2. Steve A says:

      Souds great, but thanks to our lovely states "red tape process", GOOD LUCK trying to find anyone willing to ship. I purchased two cases last year and now even the company that was previously willing now refuses to ship. THANKS FOR NOTHING. Guess we will have to continue to drive over state lines to get decent pricing and selection for our wine.
      "Tennessee sounds good to me" I don't think so.

    3. Jim P. says:

      Also, don't forget, the winery or supplier has to pay a one time fee of $300 and an annual fee of $150. If they choose not to do so, they will not ship under penalties.

    4. [...] recent example is a new wine shipping law   in Tennessee (Senate Bill 166) that would allow out-of-state wineries to ship up to 3 cases per [...]

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