LEGISLATIVE UPDATES: HOT STATES
ALABAMA: Moves Closer to Opening
As you know, Alabama currently bans on winery DTC shipping. SB138, introduced this year, would allow for winery DTC shipping and includes a fulfillment house license requirement. The bill passed the House unanimously on 4/1/21 and moves to the Senate. UPDATE 4/30: On 4/29/21, the bill, now called HB437, passed a vote by the Senate and the House approved the Senate's changes. HB437 now goes to Governor Ivey for signature. If signed, Alabama will become the 47th states to allow winery DTC shipping.
TENNESSEE: Fulfillment House Solution Progressing
As previously reported, two bills were introduced in TN that posed a threat to winery DTC by prohibiting winery DTC shipping through fulfillment houses. More than 60% of winery DTC shipments to the state flow through fulfillment houses. Consumers responded by sending 5,000+ letters to state legislators opposing the bills in Q1, one of the largest responses in any state campaign.
Successful lobbying from Wine Institute has replaced the ban with a provision to create a license for fulfillment houses. HB742 passed the House 4/8/21 and is now in the Senate.
KENTUCKY: Big Win!
HB415, a fix-it bill creating a fulfillment house license and allowing DTC shipments from alternating proprietorships, was signed by the Governor 3/12/21 and is effective immediately. Additionally, the ABC has stated that while the new rules are being written they will not enforce existing regulations that conflict with the new, simpler regulations in HB415.
NEW JERSEY: New Report Shows Effect of Proposed Legislation
A new report commissioned by Naked Wines and conducted by Danny Brager and Dale Stratton identifies benefits if two bills pass that aim to remove the 250,000 gallon capacity cap: increased tax collections, wider consumer choice at broader price ranges, and no significant effect on local retailers (and possibly some benefits).
The press release issued by Free the Grapes! on the report was picked up last week in InsiderNJ.com. To read additional press coverage from New Jersey, including an Op Ed by a former Maryland retailer, view our trade blog.
ACTION: We encourage you to continue sharing this link with our consumers, via social media and emails: https://freethegrapes.org/alert/winery-new-jersey/
LEGISLATIVE UPDATES: HOT STATES
ALASKA. S9 would align the state’s statutes with our industry’s model direct shipping bill. [LINK: https://freethegrapes.org/model-direct-shipping-bill/] The bill is in the Senate Judiciary Committee.
ARKANSAS: S546, which would have removed the current requirement that the consumer first visit the winery premises prior to any DTC shipments, was killed in committee. Separately, H1066, which would have created a microbrewery DTC statute, died.
FLORIDA: S50 became the final amended bill to enact a remote seller’s tax which will impact those wineries having $100,000 or more in DTC shipping sales into Florida during the previous year. The new law was signed by the Governor and will go into effect on 7/1/21.
HAWAII: HB824 would require one common carrier report sent to the state, rather than to each county. The bill passed the Senate 4/13/2021, but the House did not concur, so it’s back to conference committee. The carriers have requested changing the reporting frequency to align with winery annual winery reporting. The bill is currently awaiting action in Conference Committee.
IOWA: H639 would authorize a manufacturer of distilled spirits produced in Iowa to sell such distilled spirits at retail for direct shipment to any person within the state or out of state. However, all shipments of these distilled spirits shall be made through the state’s wholesale system.
ILLINOIS: HB2136, a shell bill, has been amended to allow retailer DTC shipping. That is been assigned to the House Executive Committee.
KANSAS: H2252, which would create a fulfillment house license, is now in conference committee. H2252 requires monthly reports, a $50 license fee and an additional $50 fee per fulfillment house location. The bill passed the House 3/2/21, then passed the Senate 3/25/21, but the House refused to concur on the Senate’s amendments 3/30/21. The bill remains in Conference Committee at this time.
LOUISIANA: H393 would remove the “wholesaler exclusion” banning DTC shipments of wines in LA wholesale distribution. The bill was pre-filed 4/1/21 and is in the House Committee on Judiciary.
MAINE: S354 was heard in committee 4/16/21 and would expand DTC to include retailers and distillers, as well as allow small brewery or small winery licensees holding a license to self‑distribute. Unfortunately, the bill’s current language removes the winery DTC shipment exemption from state bottle bill requirements which could stop winery DTC shipping altogether.
MICHIGAN: S141 is a bill to prevent DTC shipments from wineries who also hold a retailer license and is now in the House after passing the Senate. Language to clarify that a winery’s instate tasting-room licenses and other state DTC shipping licenses are not considered a “retailer license” under this statute has been amended into the bill, protecting the ability of wineries to be able to continue shipping.
MINNESOTA: S479, a pending bill, would put our model DTC shipping language into statute.
MISSISSIPPI: H577 and S2449 were both DTC shipping bills that died in committee in early February.
MISSOURI: H555, an economic nexus bill, was introduced 1/6/21 and would modify tax collections to include remote sellers exceeding the threshold of $100k in sales during a 12-month period. As of 3/31/21 it was placed on an “informal calendar.”
NORTH DAKOTA: S2321 would allow microbreweries to ship DTC but does not affect winery DTC. The bill passed the Senate and House and is before the Governor for signature.
NEBRASKA: L80 would reduce the DTC license fees for both wineries and retailers from $500 to $250 per year.
NEVADA. S394 is a remote sellers bill and as of 3/26/21 is in the Senate Committee on Commerce and Labor.
NEW HAMPSHIRE: S14 would allow the state’s liquor commission to be a DTC shipper of wine and spirits. The bill has passed the Senate 2/4/21.
NEW YORK: A799, the retailer DTC bill, may be considered once the state budget is finalized. Separately, S901/S703 are primary source bills that would create more paperwork for winery DTC shippers. Finally, S3870 would exempt in-state wineries, distillers, and brewers from collecting and remitting excise taxes for sales taking place on the producer’s premises.
OKLAHOMA: H1922 has a requirement that the common carriers cannot comply with (i.e, reporting weight) which was removed, but the bill language still includes very large penalties. Separately, H2684 passed the Senate 4/15/21 is now before the Governor for signature. Originally it included a surety bond requirement, which was removed.
OREGON: S406 would increase the monthly DTC shippers limit from 3 to 5 cases and passed the Senate 3/18 and is now in the House. Separately, H3245 would require service training and would, if passed, cause common carriers to stop wine shipments to OR.
RHODE ISLAND: S69, our model DTC bill removing the “winery visit penalty,” is being held for further study and so is dead for the year.
SOUTH CAROLINA: H3772 concerns wine and spirits delivery by on and off premise accounts but includes some objectionable 21st Amendment language that Wine Institute seeks to remove. In the Senate Judiciary Committee.
SOUTH DAKOTA: H1208, which would allow for spirits DTC shipping, has been tabled in the House Commerce and Energy Committee. S109, a spirits special order provision for products not in distribution, was signed by the Governor 3/18/21.
TEXAS: There is no movement on S757 and S814 which would remove the 35k gallon DTC limit for in- and out-of-state wineries.
UTAH: S59 is intended to replace the flawed special-order bill from 2020, but it’s another special order bill that we believe will not work well for consumers or wineries. The bill passed the Senate on 1/26/21 and is in the House Rules Committee as of 3/5/21.
WASHINGTON: H1432 would allow distillery DTC shipping.
WEST VIRGINIA: H2025 was amended as a special order provision for spirits not available at retail. It is likely unworkable.
WYOMING: H13 was signed by the Governor 2/9/21 and becomes effective 7/1/21 – it increases limits from 4 to 12 cases/year, and allows retailer DTC, but unfortunately it did not remove the existing exclusion for those wines sold through the state’s control system.
