I assume this must affect wine purchases…
doubt it will change things all that much,at least not for me…Most wineries and retailers that I buy from have been collecting sales tax for quite some time now
Would this make it more likely that states allow for out-of-state wine purchases? Hard to argue against increased tax revenue
Tell that to the big distributor lobbies.
I pretty much pay now as a Californian.
I favor this tax, it supports bricks and mortar stores.
I kind of feel that if state taxing authorities can force out of state wine retailers to collect and pay over sales tax, there is much less incentive for lawmakers to continue backing distributors trying to stop out of state importation of wine, but as with many things in life, not everything makes sense.
Bingo
You dudes who have been smuggling tens of thousands of dollars in fine wine across state borders, without paying any sales tax, need to get the heck off of “Real Names” bulletin boards, like yesterday.
And for all the small- to medium-sized Mom & Pops out there [to include all the artisanal vintners on this board], who were making some extra profit via internet sales, my heart goes out to you - I saw some numbers today indicating that there are tens of thousands of local jurisdictions in the USA which are tacking their own local sales taxes on top of their state sales taxes.
But it’s a good day for the handful of software houses who have compiled accurate lists of street addresses vis-a-vis local sales taxes - their phones are gonna be ringing off the hook.
The prospect of revenue for the public coffers pales next to campaign contributions from the distributors, I’m afraid – private benefit versus the public weal.
As of today’s ruling, you are correct. Prior to today’s ruling, which reversed the 1992 ruling, you were not.
Firstly, the “comparison” is between contributions bribing legislators vs what those law makers do with “other people’s money”. Second, it’s crazy how little it costs to influence law making. On that, the lion’s share of lobbying money goes to the lobbyists, not the politicians. Another part of what they’re doing is manipulating lawmakers who are ill-informed on an issue. This is a huge factor dealing with state legislatures, which often have a lot of rubes. We scapegoat the distributors for the anti-shipping laws, by the lobbyists are also representing large producers and industry groups who have those same interests, so present themselves as authoritative and above board. Lastly, wine should have been at the spear tip working with state legislatures in modernizing from the honor system collecting use tax to actually getting the due revenue collected. There certainly have been some big good actors there. Of course wine is a small part of ecommerce, but not insignificant. This was one of the big lobbying points against shipping.
Not a lawyer, in fact I only have a very rudimentary grasp of the issues in play here, but it is the internet so let’s play. As someone explained it to me, this ruling will open the door for the next lawsuit which is the one those of us in the business are looking for. Taxes are collected, remitted on all sales - however there are laws that prevent said purchase from being shipped to the customer violating interstate commerce laws. This is supposed to the be the hook we in the wine business are waiting for – once the tax issue is settled, there is no reason said legal item can’t be shipped. Or something like that. Or I could be totally wrong.
Did you sleep at a Holiday Inn Express last night? That DOES sound correct, however I still believe that state legislation trumps the ability to ship, regardless if sales tax is collected.
I don’t believe that a state can simultaneously tax out-of-state retailers on wine sales to its residents and prohibit the residents from bringing the wine into the state. Not that some won’t try. If the state wants to collect the revenue, they’ll almost certainly have to allow the shipments.
However, you will be asking legislators to decide which they value more: money that goes into the state coffers, or money that goes into their own coffers. History shows that they like the former very much but they love the latter.
Wasn’t Al Capone famously found guilty for tax evasion for not having paid taxes on his ill-gotten gains? Has the law about that changed or do I not understand the nature of the conviction? It would seem to imply that one could disallow out-of-state retailers to ship and could still levy tax on them when they did.
California (like some other states) passed a law requiring producers or retailers collect and remit sales tax as a condition for a license to ship into the state. Alcohol is different from other products, states already had the power to regulate. So, I don’t see why this decision changes anything, the power to tax has not been the problem.
-Al
No, I think you’ve got the history right. But the wine buying public and Capone are not equivalents. It is true that, in theory, and in actual practice in given cases, the state could use existing tax laws to go after wine shipped into a state in contravention of their laws (ask Alfert). But I doubt seriously if a state taxing authority is going to set up a mechanism for collecting taxes on a product it won’t allow into the state. Has any state where weed is still illegal started collecting their states taxes in Colorado for residents that buy there?
I think w should support local wine shops
Ideally this would extend to any commercial transaction of any size at any jurisdictional scale, despite the article’s bias for a threshold. I can’t think of a single argument in favor of exempting nonresidents from whatever resident social pact a community has agreed to.
The point behind these restrictive shipping laws is market share. With just one or a few distributors in a state, they often only carry products from large producers and distributors (which is why a trio of those have been highly involved in lobbying). The big distributors also happen to make a bigger margin on beer and spirits. So, what’s offered are easy, boring portfolios, where there’s no incentive to open the eyes of consumers to anything exciting. Some of these states I’d be surprised if there are any wine shops. So, many consumers don’t get a chance to stumble on anything better than Gallo Sonoma. Consumers who do know better aren’t able to attain anything satisfying locally. In some states it’s even illegal to bring your own wine into your state. Others, it’s highly restrictive.
For most wineries, that means they have no market access. They have a shot being at the mercy of a distributor that got into the alcohol distribution business during Prohibition (take a guess what that means and imagine the corporate culture and ethics). They can have exclusive rights to distribute your wine, but not bother to do so, and have state laws that prevent you from changing to another distributor. They can sell your wine and not pay you, and have the power making it cost prohibitive to try to collect.
Shipping gets around all that mess. It also has a built in disincentive to overcome since it’s costly. No one’s going to pay that premium on something they can get at the local wine shop.