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H0011...............................................by REVENUE AND TAXATION
WINE - DIRECT SHIPMENT - Amends existing law to permit issuance of direct
shipper permits to holders of wine licenses issued in Idaho and other
states; to clarify the payment of sales and use taxes and wine excise taxes
on wine sold under a direct shipper's permit; to clarify other duties of
the holder of a direct shipper's permit; to continuously appropriate to the
Idaho State Police and State Tax Commission fees for direct shipper's
permits; to prohibit the direct shipment of wine to consumers by any person
not holding a direct shipper's permit; to impose the wine excise tax on
holders of wine direct shipper's permits; to provide that every sale of
wine to a retailer or consumer in this state is for use in this state; and
to provide that the seller is liable for the wine excise tax in this state.
01/16 House intro - 1st rdg - to printing
01/17 Rpt prt - to Rev/Tax
01/18 Rpt out - rec d/p - to 2nd rdg
01/19 2nd rdg - to 3rd rdg
01/22 Ret'd to Rev/Tax
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-ninth Legislature First Regular Session - 2007
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 11
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO DIRECT SHIPMENT AND TAXATION OF WINE; AMENDING SECTION 23-1309A,
3 IDAHO CODE, TO PERMIT ISSUANCE OF DIRECT SHIPPER PERMITS TO HOLDERS OF
4 WINE LICENSES ISSUED IN IDAHO AND OTHER STATES, TO REVISE DUTIES OF THE
5 WINE DIRECT SHIPPER PERMIT HOLDER, TO CLARIFY THE PAYMENT OF SALES AND USE
6 TAXES AND WINE EXCISE TAXES ON WINE SOLD UNDER A DIRECT SHIPPER PERMIT, TO
7 CLARIFY OTHER DUTIES OF THE HOLDER OF A DIRECT SHIPPER PERMIT, TO CONTINU-
8 OUSLY APPROPRIATE TO THE IDAHO STATE POLICE AND STATE TAX COMMISSION FEES
9 FOR DIRECT SHIPPER PERMITS AND TO PROHIBIT THE DIRECT SHIPMENT OF WINE TO
10 CONSUMERS BY ANY PERSON NOT HOLDING A DIRECT SHIPPER PERMIT; AND AMENDING
11 SECTION 23-1319, IDAHO CODE, TO IMPOSE THE WINE EXCISE TAX ON HOLDERS OF
12 WINE DIRECT SHIPPER PERMITS, TO PROVIDE THAT EVERY SALE OF WINE TO A
13 RETAILER OR CONSUMER IN THIS STATE IS FOR USE IN THIS STATE AND TO PROVIDE
14 THAT THE SELLER IS LIABLE TO THIS STATE FOR WINE EXCISE TAX.
15 Be It Enacted by the Legislature of the State of Idaho:
16 SECTION 1. That Section 23-1309A, Idaho Code, be, and the same is hereby
17 amended to read as follows:
18 23-1309A. SHIPMENT AND RECEIPT OF WINE AUTHORIZED -- LABELING REQUIRE-
19 MENT. (1) Notwithstanding any other provision of law, rule or regulation to
20 the contrary, any holder of a winery license under section 23-1306 or 23-1307,
21 Idaho Code, or any person holding a license to sell or manufacture wine in
22 another state who obtains a wine direct shipper permit pursuant to this sec-
23 tion may sell and ship up to twenty-four (24) nine-liter cases of wine annu-
24 ally directly to a resident of Idaho, who is at least twenty-one (21) years of
25 age, for the resident's personal use and not for resale.
26 (2) Before sending any shipment to a resident of Idaho, the wine direct
27 shipper permit holder must:
28 (a) File an application with the director;
29 (b) Pay a fifty dollar ($50.00) annual registration fee if the winery is
30 not currently licensed by the director;
31 (c) Provide the director its Idaho winery license number under this chap-
32 ter or a true copy of its current alcoholic beverage license issued by
33 another state;
34 (d) Obtain from the director a wine direct shipper permit;
35 (e) Register with the state tax commission for the payment of sales and
36 use taxes under chapter 36, title 63, Idaho Code, and excise taxes on wine
37 sold to residents of Idaho under the wine direct shipper permit.
38 (3) A wine direct shipper permit authorizes the permit holder to do all
39 of the following:
40 (a) Sell and ship not more than twenty-four (24) nine-liter cases of wine
41 annually to any person twenty-one (21) years of age or older for his or
42 her personal use and not for resale;
43 (b) Ship wine directly to a resident in this state only in compliance
2
1 with subsections (8) and (9) of this section;
2 (c) Report to the director, no later than January 31 of each year, the
3 total amount of wine shipped during the preceding calendar year under the
4 wine direct shipper permit;
5 (d) If the permit holder is located outside this state, pPay to the state
6 tax commission all sales and use taxes under chapter 36, title 63, Idaho
7 Code, and excise taxes under this chapter on sales to residents of Idaho
8 under the wine direct shipper permit. For excise tax purposes of this
9 paragraph, all wine sold pursuant to a direct shipper permit for shipment
10 to this state shall be deemed to be wine sold in this state;
11 (e) Permit the director and the state tax commission to perform an audit
12 of the wine direct shipper permit holder's records upon request;
13 (f) Be deemed to have consented to the jurisdiction of the alcohol bever-
14 age control division of the Idaho state police, the state tax commission
15 or any other state agency and the Idaho courts concerning enforcement of
16 this section and any related laws, rules or regulations.
17 (4) A wine direct shipper permit holder located outside the state may
18 annually renew its permit with the director by paying a twenty-five dollar
19 ($25.00) renewal fee and providing the director a true copy of its current
20 alcoholic beverage license issued in another state. A wine direct shipper per-
21 mit holder located in Idaho shall renew its wine direct shipper permit in con-
22 junction with its Idaho license to manufacture wine issued under this chapter.
23 All registration fees and renewal fees shall be shared equally by the Idaho
24 state police and the state tax commission and are continuously appropriated
25 with one-half (1/2) to the Idaho state police and one-half (1/2) to the state
26 tax commission for administration of the provisions of this section.
27 (5) The director may enforce the requirements of this section by adminis-
28 trative proceedings or suspend or revoke a wine direct shipper permit, and the
29 director may accept payment of an offer in compromise in lieu of suspension,
30 such payments to be determined by rule promulgated by the director.
31 (6) Sales and shipments of wine directly to consumers in Idaho from wine
32 manufacturers in Idaho or in another state who do by any person who does not
33 possess a current wine direct shipper permit are prohibited. Any person who
34 knowingly makes such a shipment is guilty of a misdemeanor.
35 (7) A licensee who holds a license for the retail sale of wine for con-
36 sumption off the licensed premises may ship not more than two (2) cases of
37 wine, containing not more than nine (9) liters per case, per shipment, for
38 personal use and not for resale, directly to a resident of another state if
39 the state to which the wine is sent allows residents of this state to receive
40 wine sent from that state without payment of additional state tax, fees or
41 charges. The sale shall be considered to have occurred in this state.
42 (8) The shipping container of any wine shipped under this section must be
43 clearly labeled to indicate that the container contains alcoholic beverages
44 and cannot be delivered to a person who is not at least twenty-one (21) years
45 of age.
46 (9) For wine shipped under this section to an Idaho resident, the deliv-
47 ery person shall:
48 (a) Have the person who receives the wine shipment sign for it; and
49 (b) Not make deliveries to anyone who is under twenty-one (21) years of
50 age or to anyone who is visibly intoxicated; and
51 (c) Keep the signature record for one (1) year.
52 (10) Sales authorized under this section are sales made by a retailer who
53 is not authorized to sell at wholesale or sales by a winery of wine produced
54 or bottled by the winery.
55 (11) The director and the state tax commission may promulgate rules to
3
1 effectuate the purposes of this section and are authorized to exchange neces-
2 sary information to implement the provisions of this section.
3 SECTION 2. That Section 23-1319, Idaho Code, be, and the same is hereby
4 amended to read as follows:
5 23-1319. EXCISE TAX -- SALES INCLUDED -- REFUND FOR EXPORT SALES --
6 REFUND FOR BREAKAGE OR SPOILAGE -- DISTRIBUTION OF REVENUE. Upon all wines
7 sold by a distributor or winery to a retailer or consumer and upon all wines
8 sold and shipped directly to Idaho state residents by an out-of-state wine
9 manufacturer any person holding a wine direct shipper permit under section
10 23-1309A, Idaho Code, for use within the state of Idaho pursuant to this chap-
11 ter there is hereby imposed an excise tax of forty-five cents (45¢) per gal-
12 lon. Sales of wine by a distributor or winery for the purpose of and resulting
13 in export of wine from this state for resale outside this state shall be
14 exempt from the taxes on wine imposed by this chapter.
15 (a) Every sale of wine by a distributor to a retailer in this state or to
16 a consumer in this state shall constitute a sale of wine for resale or con-
17 sumption in this state, whether the sale is made within or without this state,
18 and the distributor seller shall be liable for the payment of taxes. In every
19 transfer of wine by a licensed winery to its licensed retail outlet, the win-
20 ery shall be liable for payment of taxes.
21 (b) When wine has been destroyed by breakage or has spoiled or otherwise
22 become unfit for beverage purposes prior to payment of taxes on it, the dis-
23 tributor, upon satisfactory proof of destruction or spoilage, shall be enti-
24 tled to deduct from existing inventories, subject to tax, the amount of wine
25 so destroyed or spoiled.
26 (c) If the tax commission determines that any amount due under this chap-
27 ter has been paid more than once or has been erroneously or illegally col-
28 lected or computed, the commission shall set forth that fact in its records
29 and the excess amount paid or collected may be credited on any amount then due
30 and payable to the commission from that person and any balance refunded to the
31 person by whom it was paid or to his successors, administrators or executors.
32 The commission is authorized and the state board of tax appeals is authorized
33 to order the commission in proper cases to credit or refund such amounts
34 whether or not the payments have been made under protest and certify the
35 refund to the state board of examiners.
36 (d) No credit or refund shall be allowed or made after three (3) years
37 from the time the payment was made, unless before the expiration of that
38 period a claim is filed by the taxpayer. The three (3) year period allowed by
39 this subsection for making refunds or credit claims shall not apply in cases
40 where the tax commission asserts a deficiency of tax imposed by law, and tax-
41 payers desiring to appeal or otherwise seek a refund of amounts paid in obedi-
42 ence to deficiencies must do so within the time limits elsewhere prescribed by
43 law.
44 (e) All revenue received pursuant to this chapter shall be distributed as
45 follows:
46 (1) An amount of money shall be distributed to the state refund account
47 sufficient to pay current refund claims as authorized in subsection (c) of
48 this section and those moneys are continuously appropriated.
49 (2) The balance remaining after distributing the amount in paragraph (1)
50 of this subsection shall be distributed as follows:
51 (i) Twelve percent (12%) shall be distributed to the alcoholism
52 treatment account;
53 (ii) Five percent (5%) shall be distributed to the Idaho grape grow-
4
1 ers and wine producers commission account; and
2 (iii) The remainder shall be distributed to the general account.
3 (f) Any person who is not a distributor or winery but who makes, whether
4 as principal, agent or broker, any sales of wine not otherwise taxed under
5 this section and not exempt from such tax, shall be liable for payment of
6 taxes imposed by this section. This subsection shall not impose tax on wine
7 sold pursuant to section 23-1336, Idaho Code.
STATEMENT OF PURPOSE
RS 16523C1
This bill makes changes to the law enacted last year permitting
the direct shipment of wine to Idaho consumers and the taxation
of that wine. This bill:
* Allow direct shipper permits to be issued to holders of
wine wholesale or retail licenses issued in Idaho and other
states.
* Prohibit the direct shipment of wine to consumers by any
person not holding a direct shipper permit.
* Clarify the duty to pay sales and use taxes and wine excise
taxes on wine sold under a direct shippers permit. The wine
excise tax applies to every sale of wine to a retailer or
consumer for use in this state and is paid by holders of
wine direct shipper permits.
* Appropriate the fees for direct shipper permits to the
State Police and the State Tax Commission.
FISCAL NOTE
None.
CONTACT
Name: Dan John/Ted Spangler
Agency: State Tax Commission
Phone: (208) 334-7500
STATEMENT OF PURPOSE/FISCAL NOTE H 11