?Contains sulfites? meant to frighten rather than inform
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HB 1029, a positive direct shipping bill, was put on a second ?extension order? in May for consideration later in the year. But industry representatives warn that the bill will be shelved unless it moves by the end of this month. There appears to be support for the bill if it can get a vote in the Assembly and Senate. But a squabble over unrelated bills stymies progress.This situation should sound familiar to Massachusetts wine enthusiasts. It's the same thing that happened to HB 4497 in 2010 which would have similarly enabled direct shipments. It's getting a little comical (in a tragic way) that the state still isn't in compliance with a 2010 Federal Court ruling that the state's current laws, which restrict shipments from any winery producing more than 30,000 gallons, were unconstitutional. HB 1029 would bring the state into compliance with that court order, but more importantly it would bring common sense to a situation that's currently non-sensical. The bill would address onerous restrictions currently in place that make it cost-prohibitive for carriers like FedEx and UPS to ship wine into the state. It would also outline how wineries obtain a license to ship directly and how they remit taxes to the state. But most importantly, to me, it would prioritize the interests of the citizens of the state over wholesalers. The tension in this situation lies between Massachusetts wholesalers, out of state wineries, and Massachusetts wine enthusiasts. But every citizen of the Commonwealth would benefit from direct shipments. Here's why... When a wine enthusiast in Massachusetts wants to buy a specific wine directly from an out of state winery it's because that wine isn't available at retail in Massachusetts. Every bottle of wine sold in Massachusetts, whether it be at retailer or in restaurants, needs to pass through a Massachusetts distributor. When a wine isn't available, the consumer doesn't substitute that wine with a similar bottle which is available from in-state retailers. The consumer usually decides to go to great lengths to have the wine shipped to a neighboring state with more sensible direct shipment laws. Like New Hampshire. Which famously doesn't have sales tax, but shrewdly (and aggressively) collects 8% tax on direct wine shipments on top of charging wineries hefty annual fees for the right to ship to the state. Did you catch what happened there? Our laws generated a nice bump of revenue for a neighboring state and inconvenienced Massachusetts residents. And every Massachusetts citizen lost revenue. Making matters worse, Massachusetts retailers aren't allowed to ship wine out of state. Thanks to this restriction, state wholesalers are missing what could be a healthy boost in business. And every citizen is missing out on collecting excise tax as wine passes through the distributor. All of this fighting is just about winery direct shipments. It doesn't cover retailer direct shipments which would be even more advantageous to Massachusetts wine enthusiasts, and an even larger source of revenue for the state. Look at Virgina for an example of how this should be done. Since changing their laws to allow direct shipments they now enjoy a revenue stream of over $3 million dollars a year. Next time someone mentions a state budget deficit I suggest they consider this opportunity. On his Fermentation wine blog, Tom Wark points out this retailer restriction:
The bill is in fact not a very good one. Under its provisions, consumers in the state would be prohibited from having imported wines shipped to them from out of state. That means no French, Italian, German, Austrian, Spanish or any other imported wines could be ordered by consumers since the bill does not allow out of state retailers to ship into the state. Rather, only out-of-state wineries would have the privilege.I agree the bill doesn't go far enough. But it's a step in the right direction and one that Governor Patrick said he would sign if it came to his desk. So let's do the right thing and get this bill passed. Right now it's stuck in the Committee on Consumer Protection and Professional Licensure. When the committee heard arguments on it two years ago I was in attendance. This bill was just one item of many related to alcohol the committee was considering, and the speakers were primarily lobbyists from both sides. I stopped by and talked to Representative Theodore Speliotis after the hearing. I think he was surprised to see a consumer at the meeting. I was disappointed there was no decisions or even meaningful discussion for the most part at the meeting. I explained to him my interest in receiving direct shipments of wine and asked him what I could do. He recommended I send him and others a message of support for this bill. Our representatives needs to hear directly from us. So here's your call to action: Visit the Free the Grapes website to send an email to Representative Speliotis and others explaining why you favor the direct shipment of wine. Do it now. Thank you.
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States not currently allow wine to be shipped into their state can now fairly easily see the kind of tax revenue they are leaving on the table. For example, Massachusetts, which has a population roughly equal to Washington State can expect, based on information in this report to see $50,000,000 worth of wine shipped to that state, resulting in over $3,000,000 in tax revenue?were its legislators to change the law to allow direct shipping from wineries.This estimate comes from data presented in Ship Compliant's Direct-to-Consumer Shipping Report. A few things that strike me as important to understand and discuss on this subject... Massachusetts doesn't currently have a sales tax on alcohol. There is an excise tax however, which is paid by the distributors as wine comes into the state, based on volume. Some amount of revenue would be raised if Massachusetts allowed direct shipments and collected this excise tax along with licensing fees for out of state wineries and retailers. But these amounts would be nowhere near $3M annually. The key would be in collecting, effectively, an import tax on wine. Sound crazy? It's not. New Hampshire has no sales tax on wine sold in its state stores yet they aggressively collect an 8% tax on wine shipped to consumers from out of state. New Hampshire is a bit of a different situation of course, given that the state runs much of the liquor business itself. But we can look to other states for examples here as well. New Jersey recently opened up to shipment from out of state wineries. But the licensing fees and requirements were so high it was only viable the largest wineries. This will surely dampen the positive revenue effect more reasonable policies would have enabled. Virginia seems a better state to emulate. When they decided to allow the direct shipment of wine they took a long hard look at the situation, decided to allow both winery and retailer direct shipments, thought about the impact to in-state businesses and decided it was in the collective best interest of the state to allow shipments. Set the taxes high and let it fly! Current laws favor the interest of a few in-state entities over the collective revenue picture of the state. Don't like it? Write your state representative. But an interesting central question, I think, is this: Would you support a 6.25% import tax on wine shipped from out of state wineries and retailers if it was what was required to enable the direct shipment of wine to Massachusetts addresses?
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