PASO ROBLES WINE COUNTRY ALLIANCE

Transcription

1 PASO ROBLES WINE COUNTRY ALLIANCE November 3, 2016 Steve Gross Vice President, State Relations Wine Institute

2 The Big News From 2015?

3 South Dakota - New in 2015 New law effective 1/1/16 Apply for tax and shipping license via website $100 annual permit Quarterly sales & excise taxes and reports 12 cases annual limit per consumer Age verification required Label & brand registration if not already offered in the state Now require tracking # on reports

4 Massachusetts New in 2015 Massachusetts opened on 1/1/15. Instructions and applications all on website New: DOR has announced correction of previously conflicting tax information. Correct tax for table wine is $0.55/gal Wineries that were paying the incorrect higher rate can file amended excise tax returns. A separate amended return for each tax period is required. New corrected tax forms for 2016 filings are now available

5 Arkansas - Change in 2015 As of 7/15/15 local taxes are now due

6 Hawaii Change in 2015 County of Hawaii now issuing 2-year permits.

7 Indiana change in 2015 New Provisions passed in 2015: One-time face-to-face requirement was removed Allows use of standard age verification services Surety bond removed Increased the total amount a DTC shipper may sell from 3,000 to 5,000 cases per year Tiered permit: 1,000 cases or les still $100; over 1,00 tiered structure to $500 cap at 5,000 cases. Wholesaler restriction still remains.

8 North Dakota - Change in 2015 Bill to fix FedEx shipping issues passed shipping resumed in September, 2015

9 Wyoming Change in 2015 H 47 passed and signed, effective date is 7/1/15: doubles the limit to 4 cases per household annually Non-listed items only!

10 Iowa Reporting change in 2015 New semi-annual reporting schedule due on July 10 and January 10 for each previous 6-month filing period. (Replaces monthly reporting.)

11 Maryland reporting change in 2015 Bill to allow move from quarterly to annual reporting and payment passed. The Comptroller has yet to implement the change however!

12 Oregon reporting change in 2015 Bill to move from monthly to quarterly shipping (and add beer to the law) passed. Effective on 1/1/16.

13 Illinois in 2015 Attorney Steven Diamond sued wineries and retailers over tax on freight Retailer suits dismissed by AG July 2015 after determination the law was not applicable Winery suits moved forward WI and members sued the DOR and Attorney General in July 2015 DOR issued proposed clarifying rules in August of 2015

14 Illinois Qui Tam Lawsuits in 2015 Attorney Steven Diamond sued wineries and retailers over tax on freight Retailer suits dismissed by AG July 2015 after determination the law was not applicable Winery suits moved forward WI and members sued the DOR and Attorney General in July 2015 DOR issued proposed clarifying rules in August of 2015 (Continued in 2016 section)

15 What s happened in 2016?

16 New California BPA Warning BPA Warning As of May 11, 2016, anyone who manufactures, imports or distributes in California a product containing BPA must provide a Prop 65 warning to consumers. The warning will cover fruits, vegetables, soups, pasta products, milk, soda, and alcohol beverages packaged in hermetically sealed, durable metal or glass containers, synthetic corks, plastic liners in bags, plastic liners in screw caps and can linings.

17 New California BPA Warning (Cont.) WARNING: Many food and beverage cans have linings containing bisphenol A (BPA), a chemical known to the State of California to cause harm to the female reproductive system. Jar lids and bottle caps may also contain BPA. You can be exposed to BPA when you consume foods or beverages packaged in these containers. For more information go to: www. P65Warnings.ca.gov/BPA Retailers and tasting rooms are required to post these 5 X 5 signs at the point of sale or checkout counters (e.g., one at each cash register).

18 New California BPA Warning (Cont.) Internet Wine Sales OEHHA emergency regulations also require that a BPA warning be posted prior to a California consumer purchase of wine via the Internet. The warning should be visible to consumers at the check-out point on winery websites.

19 Arizona Change in 2016 In June Governor Ducey signed our bill to allow wineries over 20,000 gallons to get a DTC shipping permit for off-site sales cases / cases / 2019 & Beyond 12 cases per individual. Must issue new permits by 1/1/17. No impact on permits for wineries under 20,000 gallons

20 Pennsylvania New in 2016 New law became effective 8/7/16 36 cases per winery per consumer $2.50/gal plus 6% sales tax (additional drinks taxes: Allegheny County 7%, Philadelphia 10%)

21 Illinois Change in 2016 S 2989 was signed by Governor: Wineries must now designate any fulfillment houses they use Fulfillment house reporting requirements now in place New felony penalties on those who ignore a cease and desist notice from the state.

22 Illinois Qui Tam Lawsuits in 2016 In May the JCAR approved the DOR s new rules clarifying tax rules on freight and creating a safe harbor back to 2009 for those who shipped. We dropped our lawsuit as a result. Still working to see if we can recoup and winery settlement payments if they would have fit the safe harbor.

23 Louisiana Changes in 2016 Legislation to codify previous rule that allows a winery utilizing a wholesaler to DTC ship those labels NOT in distribution was passed and signed. (All labels may still be sold of on-site sales) New reporting requirements and an ATC enforcement fee of $250 added, in addition to existing DOR registration and $150 fee.

24 Michigan changes in 2016 S 1088 is pending in the legislature, sponsored by MBWW. It has passed the Senate now in House. Would let Michigan retailers ship to MI residents, but prohibit out-of-state retailers Contains removal of DTC case labeling and invoice requirements. Current rule requires orderer/receiver name on outside of box, as well as an invoice with brand name and corresponding MI approval number.

25 North Carolina Reporting Change in 2016 New legislation (S 729 signed on 5/11/16) will transition from a monthly to an annual tax/reporting schedule.

26 Oklahoma Changes in 2016 Unworkable DTC shipping provision is contained in pending November ballot measure #792 (was SJR 68/SR 383) vote on 11/8/16. Requires a Consumer Permit with an aggregate limit of 30 cases Common carriers face criminal penalties Only wine not in distribution is included 6 cases per individual per winery

27 What s On Tap for 2017?

28 Delaware 2017 efforts Current Status: Shipping prohibited Exception for Federal On-Site rule: Winery allowed to ship home what a consumer could carry (unlimited amount in DE) when purchased on-site at the winery Consumer must pay excise tax Effort to pass permit bill failed in 2016 but will be introduced again in 2017 with more support

29 New Jersey 2017 efforts Current Status: Permit required fees range from $83 to $938 based on size of winery 250,000 gallon capacity cap 12 cases per person per year Excise and Sales taxes (charged on wine and freight) $23 per label registration required $1,000 bond required Corporations and LLC s must pay corporate tax Working on a bill to address items above in blue.

30 Rhode Island 2017 efforts Current Status: No permit required On-Site purchases only allowed Limited to a reasonable amount No excise or sales taxes required Efforts to replace on-site requirement law failed to pass in 2016, but will be reintroduced in 2017

31 Wyoming 2017 efforts Potential effort to remove the limitation on sales of listed items via DTC

32 What s Next for State DTC? Continue to try and open new states and protect existing states Continue to improve existing shipping laws:» remove on-site and capacity caps» remove onerous paperwork requirements» simplify reporting and frequency of reports» streamline permitting and registration procedures Work with carriers and states to insure reporting procedures work

33 What can YOU be doing? Insure your shipments are ALL legal! Increase use of Age Verification at point of sale (even when not required by statute) Work with compliance companies to encourage system integrations for both wineries and states Work with third-party providers to insure their programs meet state requirements Engage your customers (and potential customers) when asked to do so by FreeTheGrapes

34 Direct-to-Consumer Shipping (as of 11/3/16) DTC allowed DTC prohibited

35 State Relations Regions Sally Jefferson Mike Falasco Tim Schmelzer Carol Martel Terri Beirne Hunter Limbaugh Katie Jacoy Chuck McGrigg

36 QUESTIONS? Steve Gross Vice President, State Relations Wine Institute 425 Market St., Suite 1000 San Francisco, CA