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States can't limit out of state wine shipment

j
joypirate May 16, 2005 10:59 AM

This could be very good news for the wine industry.

Oh Clarence Thomas, always a naysayer.

Link: http://www.cnn.com/2005/LAW/05/16/sco...

  1. b
    Bob W. May 16, 2005 12:56 PM

    One of the plaintiffs was Mrs. Swedenburg of Middleburg VA, who has run a small winery with her husband for about 20 years -- it's one of the oldest in Va. Sadly, he passed away last year but thanks to his efforts, more people will be able to enjoy Virginia wines.

    For those who say, "Virginia wines, wtf?" there are now over 80 wineries in Va. and some are damn good. Among the grapes that do really well here are Cab Franc, Viognier, and our native grape, Horton (a red). There are also wineries that specialize in Italian varietals, dessert wines, and of course Cab Sauv and Chardonnay.

    2 Replies
    1. re: Bob W.
      a
      AimeeP May 16, 2005 03:10 PM

      Virginia does turn out some very good wines. One year a group of friends and I stumbled upon a Wine Festival at the 'Plains' in VA - terrific wine, food and music.

      Link: http://www.virginiawines.org/index.html

      1. re: AimeeP
        b
        Bob W. May 17, 2005 11:31 AM

        You stumbled onto a great event! There are two big wine festivals each year: Vintage Virginia in June and the Virginia Wine Festival in August.

        These events have gotten so popular that they have moved from The Plains to Long Branch Estate in Millwood, a few miles west. We're going to Vintage Virginia this year; sometimes it's so hot during the August event that you really can't enjoy it.

    2. y
      yayadave May 16, 2005 01:30 PM

      But I'll bet they can bust you for in state importation - especially if they don't get their tax money.

      5 Replies
      1. re: yayadave
        e
        e.d. May 16, 2005 01:41 PM

        Nope. States can't tax interstate commerce. The one way states could evade this is by not allowing in-state wineries to ship within their state, which may be a problem for me since I live in Arizona. Since Arizona wineries, few that there are, seem to be mostly a joke, the state would lose little by prohibiting all wine shipments within the state by local or out of state wineries.

        ed

        1. re: e.d.
          i
          IamJacksBrain May 16, 2005 05:14 PM

          ed,

          Which AZ wines have you tried? There are a couple of AZ wineries that put out less than stellar stuff, but there are more that put out very good wine (off the top of my head Callaghan and Echo Canyon come to mind).

          Mario

          1. re: IamJacksBrain
            e
            e.d. May 17, 2005 01:17 PM

            Sorry, my bad. It is merely my limited experience. Having lived in Oregon and California where almost every winery makes drinkable, if not memorable, product, I swore off AZ wines after friends brought back undrinkable swill from a couple wineries (Tucson area?). On that basis, I lost any interest or desire to invest money in another Arizona wine. And honestly, I'm still a bit skeptical. I would definitely have to taste one before I would buy it.

            By the way, do you know if AZ allows instate wineries to ship to consumers?

          2. re: e.d.
            j
            john gonzales May 18, 2005 02:01 PM

            I believe in this case you're mistaken about the states' ability to collect tax on an interstate shipment. I think you'll find that as a part of req'd licenses/permits allowing a winery from another state to ship into a state, will be provisions requiring the out of state winery to collect and report tax on wines sold and shipped to another state's residents. It may be a use tax rather than a sales tax, but will probably be charged by shippers.
            An issue for small wineries and small states now becomes whether (though they're allowed to ship) the permitting/collecting/reporting process is practical for a small volume of shipping. It will be much easier to navigate for the large production houses.

            1. re: john gonzales
              m
              Midlife May 18, 2005 03:18 PM

              Exactly right. A friend, in Arizona, buys wine from a winery in California. Until recently they would not ship to him, but they have now taken the steps necessary to comply with AZ's tax and reporting regulations, and he now gets direct shipments.

              What seems to happen, in cases like this wine ruling, is that the court's decision is limited to the exact specifics of the case involved. Here they ruled that New York and Michigan are discriminating against out-of-state wineries by not allowing them to ship directly to consumers when the same states allow in-state wineries to do so. How that affects any other set of circumstances will have to work it's way out in local courts and legislatures before we see the impact on related transactions.

        2. d
          dinwiddie May 16, 2005 04:03 PM

          The decision only addressed a very narrow question, can states permit instate wineries to ship to consumers in the state and prohibit out of state wineries from doing so. Both NY and MI, the two states involved, have such prohibitions against out of state wineries while allowing instate wineries to ship.

          This will may prompt some states to change their laws, but it could be a double edged sword. If NY wishes, it could continue to prohibit out of state wineries from shipping to NY by simply prohibiting NY wineries from shipping to customers in NY.

          States like Maryland will not be affected as they do not permit shipping at all. Some states, VA and TX come to mind, have changed their laws to permit out of state wineries to ship. But the wineries will still have to jump thru a lot of hoops for tax and license purposes.

          1. r
            Richie May 16, 2005 04:53 PM

            So,I am going ot the Napa Valley in a few weeks. That means I can a case of wine home to Connecticut legally now? Thanks,Richie

            6 Replies
            1. re: Richie
              j
              joypirate May 16, 2005 05:15 PM

              As I read it, if Connecticut allows Connecticut wine(?) to be shipped to your house, then yes, they must allow California to be shipped to your house. If they don't allow any wine to be shipped to your house, then no, they don't need to allow it.

              1. re: joypirate
                f
                FlyFish May 16, 2005 06:52 PM

                I don't think it's the shipping that's the issue. I believe the ruling affected direct sales - i.e., the winery selling direct to the consumer rather than going through a jobber and retailer. So, I think the answer is if the state allows direct sales at in-state wineries (whether shipped or cash-and-carry) it has to allow direct sales from out-of-state wineries.

                Either way, it's a great day for wine lovers.

                1. re: FlyFish
                  j
                  john gonzales May 18, 2005 02:09 PM

                  Shipping is the key issue not the use of retailer or distributor.
                  The rulling simply means that states allowing in-state wineries to SHIP directly to customer must allow out of state wineries to SHIP directly. A state may allow face-to-face purchases at an in-state winery, but not allow direct shipped purchases from out-of-state wineries.

                  1. re: john gonzales
                    d
                    dinwiddie May 19, 2005 03:29 PM

                    Under current Federal law (even before the decision) if you stat permitted wine to be brought into the state from another state, they had to allow you to ship it. This was in reaction to the problems that were resulting from the restrictions on bringing things on airplanes under the new TSA rules. But check with your state first.

                    1. re: dinwiddie
                      j
                      John Gonzales May 20, 2005 02:31 AM

                      I guess you're referring to the reciprocity laws, which have been around for quite awhile. They're "trade-based" and I don't believe rooted in security issues.

                      Anyhow the current ruling is another issue. It involves the non-reciprocal states and their "unfair" distinction between intra-state and inter-state shipping.

                2. re: joypirate
                  e
                  e.d. May 17, 2005 01:18 PM

                  According to the Washington Post, Connecticut is one of the states affected by the ruling.

              2. m
                Midlife May 16, 2005 09:28 PM

                From the stuff I'm reading about this decision, a lot of the presumptions being made here are not exactly a 'done deal'. This decision is based on cases brought in New York and Michigan so, technically, it affects only those states immediately. Other states that are in conflict with the decision will now have to make changes or they will be sued based on the decision.

                24 states do not now allow their in-state wineries to sell directly to consumers, so they are not in conflict and don't have to do anything. A lot of states have different kinds of laws allowing direct shipments from out-of-state under specific conditions.

                How each state will move forward is still up in the air. One thing is sure......... it will take a while before most of us will see changes,

                1. j
                  joypirate May 17, 2005 09:29 AM

                  More info today.

                  Link: http://www.law.com/jsp/article.jsp?id...

                  4 Replies
                  1. re: joypirate
                    e
                    e.d. May 17, 2005 01:30 PM

                    According to the Washington Post, the states that currently would be affected by the ruling are Michigan, New York, Ohio, Indiana, Florida, Connecticut, Massachusetts, and Vermont as these all have similar laws. For wineries this will add a tremendous customer base to the states that already allow shipments. For those of us living elsewhere, perhaps it will provide an impetus to get our states to change their laws.

                    ed

                    1. re: e.d.
                      l
                      LisaLou May 17, 2005 01:41 PM

                      Woo hoo! I was just about to ask if there was a full list of states affected. I'm in Vermont. Maybe I'll finally get a chance to join a wine club I've been eyeing. Thanks!

                      1. re: LisaLou
                        s
                        sbp May 18, 2005 08:08 PM

                        Just remember, most wine clubs are retailers or distributors, not wineries (whose selection is more limited). As far as I can see, the decision applies only to wineries.

                        1. re: sbp
                          j
                          John Gonzales May 20, 2005 02:35 AM

                          Most wineries have wine clubs, retailers have jumped into the fray. Distributors/wholesalers don't typically (if ever) have wine clubs as in most states they're precluded from selling to the public.
                          You're correct in that the ruling applies to wineries and not retailers. Suits by retailers pushing for similar inter-state rights are undoubtedly just around the corner.

                  2. s
                    sbp May 17, 2005 11:17 AM

                    From what I can see, this also only applies to wineries. It would not affect laws prohibiting sales (especially internet sales) by out-of-state distributors/retailers.

                    While most distributors were opposed to direct sales, those that are heavily invested in internet sales would like to see all restrictions removed.

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