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H0454......................................................by STATE AFFAIRS
WINERIES - Amends existing law to provide that wineries that sell and ship
to Idaho residents must obtain a permit, pay taxes and comply with
specified shipping requirements; to provide for procedures and rules and
exchange of information between the Idaho State Police and the State Tax
Commission; and to provide for imposition of the wine excise tax upon all
wines sold and shipped directly to Idaho state residents by an out-of-state
wine manufacturer holding a wine direct shipper permit.
01/24 House intro - 1st rdg - to printing
01/25 Rpt prt - to St Aff
02/07 Rpt out - rec d/p - to 2nd rdg
02/08 2nd rdg - to 3rd rdg
02/09 Ref'd to Rev/Tax
02/13 Rpt out - rec d/p - to 3rd rdg
02/15 3rd rdg - PASSED - 62-0-8
AYES -- Anderson, Andrus, Barraclough, Barrett, Bastian, Bayer, Bell,
Bilbao, Block, Boe, Bolz, Brackett, Bradford, Cannon, Chadderdon,
Clark, Collins, Crow, Deal, Denney, Edmunson, Ellsworth, Eskridge,
Field(18), Field(23), Garrett, Hart(Jacobson), Harwood, Henbest,
Henderson, Jaquet, Kemp, Lake, Loertscher, Martinez, Mathews,
McGeachin, McKague, Miller, Moyle, Nielsen, Nonini, Pasley-Stuart,
Pence, Ring, Ringo, Roberts, Rusche, Rydalch, Sayler, Schaefer,
Shepherd(2), Shepherd(8), Shirley, Skippen, Smith(30), Smith(24),
Smylie, Snodgrass, Stevenson, Trail, Wills
NAYS -- None
Absent and excused -- Bedke, Black, LeFavour, Mitchell, Raybould,
Sali, Wood, Mr. Speaker
Floor Sponsor - Deal
Title apvd - to Senate
02/16 Senate intro - 1st rdg - to St Aff
02/20 Rpt out - rec d/p - to 2nd rdg
02/21 2nd rdg - to 3rd rdg
03/02 3rd rdg - PASSED - 32-1-2
AYES -- Andreason, Brandt, Broadsword, Burkett, Burtenshaw, Cameron,
Coiner, Compton, Corder, Darrington, Davis, Fulcher, Gannon, Geddes,
Goedde, Hill, Jorgenson, Kelly, Keough, Langhorst, Little, Lodge,
Malepeai, Marley, McGee, McKenzie, Pearce, Richardson, Stegner,
Stennett, Sweet, Werk
NAYS -- Schroeder
Absent and excused -- Bunderson, Williams
Floor Sponsors - Lodge & Stennett
Title apvd - to House
03/03 To enrol
03/06 Rpt enrol - Sp signed
03/07 Pres signed
03/08 To Governor
03/11 Governor signed
Session Law Chapter 29
Effective: 07/01/06
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-eighth Legislature Second Regular Session - 2006
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 454
BY STATE AFFAIRS COMMITTEE
1 AN ACT
2 RELATING TO THE DIRECT TO CONSUMER SALE AND SHIPMENT OF WINE BY WINERIES;
3 AMENDING SECTION 23-1309A, IDAHO CODE, TO PROVIDE THAT WINERIES THAT SELL
4 AND SHIP TO IDAHO RESIDENTS MUST OBTAIN A PERMIT, PAY TAXES AND COMPLY
5 WITH SPECIFIED SHIPPING REQUIREMENTS AND TO PROVIDE FOR PROCEDURES AND
6 RULES AND THE EXCHANGE OF INFORMATION BETWEEN THE STATE POLICE AND THE
7 STATE TAX COMMISSION; AND AMENDING SECTION 23-1319, IDAHO CODE, TO PROVIDE
8 FOR IMPOSITION OF THE EXCISE TAX UPON ALL WINES SOLD AND SHIPPED DIRECTLY
9 TO IDAHO STATE RESIDENTS BY AN OUT-OF-STATE WINE MANUFACTURER HOLDING A
10 WINE DIRECT SHIPPER PERMIT AND TO MAKE A TECHNICAL CORRECTION.
11 Be It Enacted by the Legislature of the State of Idaho:
12 SECTION 1. That Section 23-1309A, Idaho Code, be, and the same is hereby
13 amended to read as follows:
14 23-1309A. RECIPROCAL INTERSTATE SHIPMENT AND RECEIPT OF WINE AUTHORIZED
15 -- LABELING REQUIREMENT. (1) Any resident of this state who is at least
16 twenty-one (21) years of age is entitled to receive not more than two (2)
17 cases of wine per month for personal use, containing not more than nine (9)
18 liters per case, from another state without payment of state tax, fees or
19 charges if the state from which the wine is sent allows its residents to
20 receive wine from this state without imposition of state tax, fees or charges.
21 For tax purposes, receipt of a shipment into this state under this subsection
22 shall not be considered to constitute a sale in this state. No person who
23 transports wine pursuant to this subsection shall deliver more than two (2)
24 cases of wine to the same address at one (1) time. No person who receives wine
25 pursuant to this subsection shall resell any of the wine Notwithstanding any
26 other provision of law, rule or regulation to the contrary, any holder of a
27 winery license under section 23-1306, Idaho Code, or any person holding a
28 license to manufacture wine in another state who obtains a wine direct shipper
29 permit pursuant to this section may sell and ship up to twenty-four (24) nine-
30 liter cases of wine annually directly to a resident of Idaho, who is at least
31 twenty-one (21) years of age, for the resident's personal use and not for
32 resale.
33 (2) Before sending any shipment to a resident of Idaho, the wine direct
34 shipper permit holder must:
35 (a) File an application with the director;
36 (b) Pay a fifty dollar ($50.00) annual registration fee if the winery is
37 not currently licensed by the director;
38 (c) Provide the director its Idaho winery license number or a true copy
39 of its current alcoholic beverage license issued by another state;
40 (d) Obtain from the director a wine direct shipper permit;
41 (e) Register with the state tax commission for the payment of sales and
42 use taxes and excise taxes on wine sold to residents of Idaho under the
43 wine direct shipper permit.
2
1 (3) A wine direct shipper permit authorizes the permit holder to do all
2 of the following:
3 (a) Sell and ship not more than twenty-four (24) nine-liter cases of wine
4 annually to any person twenty-one (21) years of age or older for his or
5 her personal use and not for resale;
6 (b) Ship wine directly to a resident in this state only in compliance
7 with subsections (8) and (9) of this section;
8 (c) Report to the director, no later than January 31 of each year, the
9 total amount of wine shipped during the preceding calendar year under the
10 wine direct shipper permit;
11 (d) If the permit holder is located outside this state, pay to the state
12 tax commission all sales and use taxes, and excise taxes on sales to resi-
13 dents of Idaho under the wine direct shipper permit. For excise tax pur-
14 poses, all wine sold pursuant to a direct shipper permit shall be deemed
15 to be wine sold in this state;
16 (e) Permit the director and the state tax commission to perform an audit
17 of the wine direct shipper permit holder's records upon request;
18 (f) Be deemed to have consented to the jurisdiction of the alcohol bever-
19 age control division of the Idaho state police, or any other state agency
20 and the Idaho courts concerning enforcement of this section and any
21 related laws, rules or regulations.
22 (4) A wine direct shipper permit holder located outside the state may
23 annually renew its permit with the director by paying a twenty-five dollar
24 ($25.00) renewal fee and providing the director a true copy of its current
25 alcoholic beverage license issued in another state. A wine direct shipper
26 permit holder located in Idaho shall renew its wine direct shipper permit in
27 conjunction with its license to manufacture wine. All registration fees and
28 renewal fees shall be shared equally by the state police and the state tax
29 commission.
30 (5) The director may enforce the requirements of this section by adminis-
31 trative proceedings or suspend or revoke a wine direct shipper permit, and the
32 director may accept payment of an offer in compromise in lieu of suspension,
33 such payments to be determined by rule promulgated by the director.
34 (6) Sales and shipments of wine directly to consumers in Idaho from wine
35 manufacturers in Idaho or in another state who do not possess a current wine
36 direct shipper permit are prohibited. Any person who knowingly makes such a
37 shipment is guilty of a misdemeanor.
38 (7) A licensee who holds a license for the retail sale of wine for con-
39 sumption off the licensed premises may ship not more than two (2) cases of
40 wine, containing not more than nine (9) liters per case, per shipment, for
41 personal use and not for resale, directly to a resident of another state if
42 the state to which the wine is sent allows residents of this state to receive
43 wine sent from that state without payment of additional state tax, fees or
44 charges. The sale shall be considered to have occurred in this state.
45 (38) The shipping container of any wine sent into or out of this state
46 shipped under this section must be clearly labeled to indicate that the con-
47 tainer contains alcoholic beverages and cannot be delivered to a person who is
48 not at least twenty-one (21) years of age.
49 (49) For the purposes of out-of-state shipments wine shipped under this
50 section to an Idaho resident, the delivery person shall:
51 (a) Have the person who receives the wine shipment sign for it; and
52 (b) Not make deliveries to anyone who is under twenty-one (21) years of
53 age or to anyone who is visibly intoxicated; and
54 (c) Keep the signature record for one (1) year.
55 (510) Sales authorized under this section are sales made by a retailer who
3
1 is not authorized to sell at wholesale or sales by a winery of wine produced
2 or bottled by the winery.
3 (11) The director and the state tax commission may promulgate rules to
4 effectuate the purposes of this section and are authorized to exchange neces-
5 sary information to implement the provisions of this section.
6 SECTION 2. That Section 23-1319, Idaho Code, be, and the same is hereby
7 amended to read as follows:
8 23-1319. EXCISE TAX -- SALES INCLUDED -- REFUND FOR EXPORT SALES --
9 REFUND FOR BREAKAGE OR SPOILAGE -- DISTRIBUTION OF REVENUE. Upon all wines
10 sold by a distributor or winery to a retailer or consumer and upon all wines
11 sold and shipped directly to Idaho state residents by an out-of-state wine
12 manufacturer holding a wine direct shipper permit under section 23-1309A,
13 Idaho Code, for use within the state of Idaho pursuant to this act chapter
14 there is hereby imposed an excise tax of forty-five cents (45¢) per gallon.
15 Sales of wine by a distributor or winery for the purpose of and resulting in
16 export of wine from this state for resale outside this state shall be exempt
17 from the taxes on wine imposed by this chapter.
18 (a) Every sale of wine by a distributor to a retailer shall constitute a
19 sale of wine for resale or consumption in this state, whether the sale is made
20 within or without this state, and the distributor shall be liable for the pay-
21 ment of taxes. In every transfer of wine by a licensed winery to its licensed
22 retail outlet, the winery shall be liable for payment of taxes.
23 (b) When wine has been destroyed by breakage or has spoiled or otherwise
24 become unfit for beverage purposes prior to payment of taxes on it, the dis-
25 tributor, upon satisfactory proof of destruction or spoilage, shall be enti-
26 tled to deduct from existing inventories, subject to tax, the amount of wine
27 so destroyed or spoiled.
28 (c) If the tax commission determines that any amount due under this chap-
29 ter has been paid more than once or has been erroneously or illegally col-
30 lected or computed, the commission shall set forth that fact in its records
31 and the excess amount paid or collected may be credited on any amount then due
32 and payable to the commission from that person and any balance refunded to the
33 person by whom it was paid or to his successors, administrators or executors.
34 The commission is authorized and the state board of tax appeals is authorized
35 to order the commission in proper cases to credit or refund such amounts
36 whether or not the payments have been made under protest and certify the
37 refund to the state board of examiners.
38 (d) No credit or refund shall be allowed or made after three (3) years
39 from the time the payment was made, unless before the expiration of that
40 period a claim is filed by the taxpayer. The three (3) year period allowed by
41 this subsection for making refunds or credit claims shall not apply in cases
42 where the tax commission asserts a deficiency of tax imposed by law, and tax-
43 payers desiring to appeal or otherwise seek a refund of amounts paid in obedi-
44 ence to deficiencies must do so within the time limits elsewhere prescribed by
45 law.
46 (e) All revenue received pursuant to this chapter shall be distributed as
47 follows:
48 (1) An amount of money shall be distributed to the state refund account
49 sufficient to pay current refund claims as authorized in subsection (c) of
50 this section and those moneys are continuously appropriated.
51 (2) The balance remaining after distributing the amount in paragraph (1)
52 of this subsection shall be distributed as follows:
4
1 (i) Twelve percent (12%) shall be distributed to the alcoholism
2 treatment account;
3 (ii) Five percent (5%) shall be distributed to the Idaho grape grow-
4 ers and wine producers commission account; and
5 (iii) The remainder shall be distributed to the general account.
6 (f) Any person who is not a distributor or winery but who makes, whether
7 as principal, agent or broker, any sales of wine not otherwise taxed under
8 this section and not exempt from such tax, shall be liable for payment of
9 taxes imposed by this section. This subsection shall not impose tax on wine
10 sold pursuant to section 23-1336, Idaho Code.
STATEMENT OF PURPOSE
RS 15478C1
In a recent United States Supreme Court ruling requiring
equal treatment of in-state and out-of-state wineries in the
direct shipment of wine to consumers, Idaho's law needs to be
changed to a permit state from a reciprocal state.
This change would be equally beneficial to Idaho wineries as
to out-of-state wineries. This proposal will establish a permit
system that applies the same rules to all wineries, regardless of
location.
This proposal would increase the collection of sales and
excise taxes on wine shipped to Idaho consumers and establish
greater public safeguards to prevent wine shipments to minors.
It also will create a licensing requirement and fee to support
oversight of wine shipments. This will also eliminate the
potential for a legal challenge to our existing law.
FISCAL NOTE
Potentially, a positive impact to the general fund through
additional license fees and excise and sales tax revenues will be
realized.
Contact
Name: Roger Seiber, Wine Institute
Phone: (208) 342-8900
STATEMENT OF PURPOSE/FISCAL NOTE H 454