Category: WWI News

Governor Inslee Statement on Temporary Shutdown of Restaurants, Bars, and Entertainment and Recreational Facilities

Governor Inslee issued an emergency declaration announcing the temporary closing of restaurants, bars, entertainment and recreational facilities. This announcement coincided with a similar statement from King County Executive Dow Constantine.

You can read the Governor’s official statement here.

The Seattle Times article here provides more detail including the closure notice will extend until March 31st.

There are allowances for wineries to provide take-out and delivery sales. We are in direct communication with the Governor’s office, the Department of Commerce and the Liquor and Cannabis Board so that we can provide that assurance and clarity for all wineries.

We will continue to communicate information from the Governor’s office, our state regulators, community resources, and information about help for small businesses and employees.

As we continue sending emails updating you as the situation evolves, we strongly encourage our wine associations, schools, and others to send these notices broadly to reach the largest amount of the WA wine industry as possible.

Resources for Businesses and Employees:

Financial Resources for WA Residents Impacted by COVID-19

COVID-19 Resource List for WA Businesses and Workers

Employment Security Department Emergency Employment Resources

Unemployment Benefits

Department of Commerce COVID-19 Info & Updates

Small Business Administration Disaster Relief Loans

Association of Washington Businesses COVID-19 Employer Resources

Additional Unemployment Security Department Resources:

https://secure.esd.wa.gov/home/

https://esd.wa.gov/SharedWork

https://esd.wa.gov/SharedWork/eligibility

 

Several WA Wine Bills Continue to Advance in Olympia

Today is the 40th day of the 2020 legislative session, with two-thirds of this year’s legislative journey over and the final 20 days looming ahead. The Senate and House passed many bills out of their respective chambers, with focuses on health care, mental health, the environment, affordable housing, and to a lesser extent small business regulatory changes and reform. For the Washington wine industry, we had a very strong floor session with four of our priority bills surviving the process and continuing on into the next phase of the legislative process! Here is an updated list of the Washington wine bills that survived the floor session cutoff process and are still alive. These include:

WWI authored legislation:
SB 6392: Creating a local wine industry association license

Other:
HB 2050: Creating the Washington wine specialty license plate
SB 6095: Allowing common carrier activities not prohibited under the three-tier system (supports the Alaska Airlines Wine-Flies-Free Program among other promotional opportunities with airlines, cruise ships, and trains that cross state lines)
SB 5006: Allowing, in a limited amount, Washington wine to be sold at a craft brewery and Washington beer to be sold at a winery and satellite tasting rooms

The Legislature now shifts to spending the final days voting on survivng bills out of the House and Senate committees for the next week, then finishing the 2020 session with final votes on bills out of the full House or Senate. As always we will keep you our members informed as our work within the 2020 legislative session continues towards a March 12 finish.

Congress Approves One Year Renewal of Our Federal Excise Tax Reform

Congress Extends the Craft Beverage Modernization and Tax Reform Act Through 2020

The Craft Beverage Modernization and Tax Reform Act (CMBTRA) has been extended through December 31, 2020.

The bill was passed as part of a package of tax extenders that was included as an amendment to the Further Consolidated Appropriations Act of 2020. WineAmerica applauds the House and Senate for coming together to extend these credits through the end of 2020, avoiding costly increases for the entire American wine industry.

Earlier this week, the House of Representatives passed the bill that carried the extension by a bipartisan vote of 297 to 120. The bill was then sent to the Senate for approval. The Senate passed the bill by a vote of 71 to 23, sending it to the President’s desk for his signature, which is expected.

“This is a major victory for the American wine industry, and a huge relief for wineries of all sizes across the country,” said Marty Clubb, owner/winemaker of L’Ecole No. 41 in Walla Walla, Washington who is the current Chair of the WineAmerica Board of Directors. “While there is more work to be done, this extension is a major step forward.”

WineAmerica has been working throughout the year with our colleagues in the beer, cider, mead and spirits sectors on the Craft Beverage Modernization and Tax Reform Act. Our ultimate goal has been to secure permanence on this essential tax savings that have allowed for substantial savings and spurred reinvestment from wineries of all sizes. The larger CBMTRA currently has 74 Senate sponsors and 332 in the House. We will continue to work with our coalition partners to secure either permanence or a long term extension.

“WineAmerica just demonstrated its incredible value to the American wine industry,” said Jim Trezise, the organization’s President. “The powerful combination of daily work by our staff and lobbyists, national grassroots advocacy, and collaboration with other beverage associations was the perfect recipe for success.”

The new extension of the Craft Beverage Modernization and Tax Reform Act also includes a very important fix particular to the wine industry. Bonded wine cellars and fulfillment houses will once again be eligible to take the credits on the wine in their facilities, and bond-to bond transfers between wineries will also be eligible for the credits. The correction is a retroactive fix, and will be retroactive to January 1, 2018.

Washington State Wine Industry Reaches A New Milestone: 1,000 Active Active Winery Licenses

The Washington State Liquor and Cannabis Board recently announced that there are now 1,000 active domestic winery licensees in Washington State. Our state wine industry is growing at several times the rate of Oregon and California, and this announcement validates the growth numbers we’ve been seeing over the past decade. Congratulations to all past and present who’ve been a part of the success story of Washington State wine. As your statewide trade association for our wine industry, we promise to continue our over three decades of work at WWI to protect our industry from harm in Olympia and Washington D.C. while also continuing to responsibly modernize our alcohol laws so all of Washington wine is able to continue reaching new milestones. Cheers!

Winery Wastewater General Permit Effective July 1st 2019

The Winery General Permit is now effective. Ecology issued the Winery General Permit on May 17th of last year, but delayed the effective date to give potential permittees extra time to prepare for the new regulation. The effective date was also delayed to coincide with the recent adoption of the revised Permit Fee Rule (Chapter 173-224 WAC).

Wineries that meet the applicability requirements outlined in Special Condition S1 of the Winery General Permit have 90 days (until September 30th) to apply for permit coverage using the online permit portal. Wineries under 7,500 cases/produced a year are exempt from permit. Also, wineries in urban areas that have their wastewater system connected to a delegated point-of-treatment system are exempt from permit.

The Washington Wine Institute worked with Ecology and wine industry wastewater experts for more then four years on developing the permit. While still complicated, the final version of the permit is a tremendous improvement from where it started in 2015. Finally, the permit fees are significantly lower then what Ecology originally proposed. We will continue pushing Ecology to lower these costs as they learn how much resource is needed to permit and regulate these new winery wastewater rules.

If you have any questions, please contact the Ecology staff listed on the permit webpage.

Qualifying Nonresident Sales Tax Exemption Ends July 1st

With Governor Inslee signing the 2019-2021 Washington State Operating Budget into law, several changes to our current tax law took place. One of specific importance to Washington wineries is the significant change to the nonresident sales tax exemption when a customer from a qualifying state makes a purchase at our winery or tasting room. Below is information on what the changes mean for all tax payers and collectors. Important note: this tax collection change does NOT apply to sales of wine delivered to customers outside the state.

Courtesy of the Washington State Department of Revenue

Background
As you may know, during the 2019 session, the Legislature modified the nonresident exemption. Effective July 1, 2019, the retail sales tax exemption is no longer available at the point of sale. Instead, eligible nonresidents who have paid at least $25 in state sales tax on qualifying purchases may apply for a refund of the state portion of the retail sales tax from the Department on an annual basis.

Sales of wine
Beginning July 1, 2019, wineries in Washington must collect sales tax on their sales of wine and other tangible goods sold to nonresidents when the nonresident customer takes delivery of those goods in this state (i.e. customer takes possession of the goods in Washington at the time of sale.) The exemption will no longer apply at the point of sale, no matter where the customer resides/lives.

Interstate and foreign sales
If a Washington winery delivers wine or other items to a customer at a location outside the state, those sales continue to be exempt from Washington’s retail sales tax and retailing B&O tax as “interstate and foreign sales.” There is no change to the way these sales are taxed or reported. Wineries do not need to start collecting Washington taxes on products shipped for delivery outside the state.

For more information, see our Special Notice on our website.

CBMTRA 2019 Receives a Bipartisan Majority of Congressional Support

Support for the Craft Beverage Modernization and Tax Reform Act (H.R. 1175/ S.362) continues to build momentum with 218 members of the United States House of Representatives and 65 members of the Senate supporting the bipartisan legislation. We want to take a moment to say a huge “THANK YOU” to Senator Maria Cantwell, Senator Patty Murray, and Representatives Dan Newhouse, Susan Del Bene, Derek Kilmer, Cathy McMorris Rodgers, and Jaime Herrera-Beutler for being leaders on S.362/H.R. 1175 and supporting their Washington wine industry by agreeing to sign on as cosponsors of the legislation.

Introduced by Representatives Ron Kind (D-WI) and Mike Kelly (R-PA) and Senators Ron Wyden (D-OR) and Roy Blunt (R-MO), the legislation will make permanent reforms enacted in 2017 that create a fair and equitable tax structure for brewers, winemakers, distillers and importers of all beverage alcohol.

Important to Washington wineries within CBMTRA 2019 is both the simplification of the excise tax credit but equally important is creating a permanent change to the federal excise tax rate of $1.07 for wine up to 16% ABV. Prior to 2018, the tax rate unfairly changed from $1.07 to $1.57 on any wine above 14% ABV effectively taxing such higher ABV wine as fortified wine. Finally, CBMTRA 2019 makes permanent the allowance for sparkling wine producers to have access to the improved version of the small producer tax credit, ending a luxury tax rate of $3.44/gallon on all sparkling wine harkening back to the 1930’s and a time when sparkline wine was considered a foreign luxury.

The support for the legislation by the majority of the House and Senate is a unique coalition of alcohol trade associations including the Brewers Association, Beer Institute, Distilled Spirits Council of the United States, American Craft Spirits Association, Wine Institute, WineAmerica and the United States Association of Cider Makers.

The CBMTRA 2019 is the Washington Wine Institute’s #1 federal legislative priority. We are fortunate to have the leadership of our national association of American wineries, WineAmerica, working hard every day in Washington D.C. to push this legislation across the goal line. As a WWI member we are grateful for your investment, and we strongly encourage you to also join WineAmerica and invest in this crucial work bringing permanance to our outdated federal excise tax structure and tax savings to every your winery to reinvest and grow.

Governor Inslee Signs Three WWI Supported Bills Into Law!

WWI brought two significant WA wine policy bills to the Legislature this session, and a third was introduced by Rep. Mike Steele (R-Chelan) due to an LCB enforcement situation on recorked wine that needed either statutory or rule clarification. WWI strongly supported and helped push all three bills “to the finish line” and within the past week all three were signed into law!! Each bill has a 90 day wait before becoming law, so expect to be able to utilize these new allowances by August 1.

SB 5394: Concerning liquor licensees’ use of social media and website to promote events

WWI helped draft, introduce, and push SB 5394 to become law alongside our partners at the WA Brewers Guild. SB 5394 does three important things that should simplify and make legal our ability to utilize our social media accounts and winery websites to promote events where our wine is being featured and allow us to help make that event successful. Currently, a winery is not allowed to advertise for a retailer’s event, as current law treats such advertising as “money’s worth” and we cannot give something of value to a licensee in a different tier of our alcohol system. SB 5394 does the following:
• Modernizes state law so a brewery, winery, distiller or distributor may use their websites and social media accounts for online promotion of events held at another retailer’s licensed premise. Ex: brewer nights and tap takeovers, winemaker dinners, distiller nights and special occasion licensed events (non-profit charity events) taking place at a location other than a brewery, winery or distiller’s own premise
• Allows manufacturers and distributors to link to ticket sales for events held by a retailer of their product, including events benefiting non-profits
• Prohibits paid boosts of posts to provide consistency with laws against paid advertising for a retailer

HB 1563: Concerning liquor-related privileges of students enrolled in certain degree programs

Our Class 15 permit (known as taste and spit) exists to allow 18-20-year-old students in our higher education viticulture and enology programs to experience the diversity and complexity of wine through a highly regulated taste-and-spit experience. Those higher education institutions utilizing the Class 15 permit have proven themselves responsible in the use of this privilege and have reached a place where improving the permit can be done in the right way to take our accredited grape growing and winemaking programs to a higher level. HB 1563 improves the Class 15 permit in two important ways:

1) The bill specifies that under the existing Class 15 permit, the enrolled student may taste the alcoholic beverages either: (1) On the premises of the college or university at which the student is enrolled; or (2) While on a field trip to a grape-growing area or production facility so long as the enrolled student is accompanied by a faculty or staff member with a class 12 or 13 alcohol server permit who supervises and all other requirements that normally apply to the Class 15 permit tastings are met.

2) The bill provides that licensees holding a domestic winery license may allow interns who are between the ages of 18 and 21 years old to engage in wine-production related work at the domestic winery’s licensed location, so long as the volunteer is enrolled as a student at a community or technical college, regional university, or state university with a Class 15 permit, and in a required or elective class as part of a degree program identified in the Class 15 permit authorizing statute.

HB 1672: Recorking of wine by a winery or tasting room

HB 1672 simply allows wineries to recork wine-to-go purchased by a customer at both the winery and tasting room locations. Wineries have been doing this for years as a safety and consumer-friendly option, and we are glad to see it going into law within our domestic winery license allowances.

We want to thank our partners the WA Winegrowers, Washington State University, Walla Walla Community College, and Yakima Valley Community College for their support and help this session passing these bills that improve our state’s alcohol laws and help Washington State wineries have the tools they need to be successful. We also want to thank our prime sponsors Senator Curtis King (R-Yakima), Rep. Derek Stanford (D-Maltby), Rep. Bill Jenkin (R-Walla Walla), and Rep. Mike Steele (R-Chelan) for their leadership on these bills during the 2019 session. Thank you!!

WWI Bills Survive Policy Committee Cutoff Date

We are pleased that our two priorities bills WWI helped craft, introduce, and are pushing have already been voted out of their committees of origin. These bills are HB 1416/SB 5394, our social media/website use modernization bill, and HB 1563 adding field trip and 18-20 year old internships in winery production areas allowances to the current Class 15 permit our higher educational viticulture and enology programs utilize now (commonly known as the “taste and spit” permit).

HB 1416/SB 5394: Concerning liquor licensees’ use of social media and website to promote events

HB 1563: Concerning liquor-related privileges of students enrolled in certain degree programs

We are now working on getting HB 1416 out of House, so the House can vote on the bills moving through the legislative process. SB 5394 and HB 1563 already moved out of their respective Rules committees, and we are optimistic the bills will be voted on by the full Senate and House within the next week or two.

Beyond these bills, there are a myriad of other bills introduced this session that either directly or indirectly impact our industry. For example, we are helping guide a bill through that puts in statute language allowing wineries to recork wine purchased onsite so a customer can take it home. This is a common practice in wineries now, but the bill exists because of an enforcement issue and a general sense that it’s better to have this important privilege spelled out within our domestic winery license.

Overall, the themes of this legislative session revolve around labor regulations, environmental impacts, and most importantly whether Senate and House leadership have the votes and the public support to raise taxes, create new taxes/fees, and what industries will be impacted. Alcohol taxes are often an “easy” target when these conversations heat up in Olympia, so we continue to be on high alert throughout the session.

As always, we will keep all of our members updated on this work!

WWI Successful in Amending Harmful Common Carrier Reporting Bill

HB 1389 is a bill supported by the national wholesalers that would require common carriers (like UPS/FedEx and local carriers) that ship alcohol to file monthly reports with the Liquor and Cannabis Board and Department of Revenue on all details (many very sensitive) of each shipment. WWI worked aggressively with the prime sponsor, Chair of the committee, and Republicans on the committee to alter the bill into something entirely different that might be more effective in getting at how we curb illegal alcohol entering our state. We are excited to share that we succeeded in amending the bill so our wineries’ ability to use common carriers to ship wine will not be harmed. As amended, the bill does the following:

• Removes the entirety of the underlying bill and directs the LCB to investigate illegal alcohol shipments made to Washington consumers and liquor licensees;
• Requires the LCB to include, as a part of its investigation, the extent of the illegal alcohol shipment problem in the state;
• Authorizes the LCB, if necessary, to: (1) work with stakeholders and determine the most effective means to address the problem; and (2) develop legislative proposals to stop illegal shipments of alcohol and enforcement against making such shipments; and
• Requires the LCB to submit a report with its findings to the Legislature by December 31, 2019.