Active State Issues
Active Federal Issues
Washington State’s Office of Tourism closed it’s doors in 2011. Since then, our state is the only one in the country that has no statewide tourism marketing entity. Tourism dollars are absolutely critical to the success of our wine industry and often times our wineries are the reason tourists decide to travel to our state and spend their money at hotels, restaurants, rental cars, etc.
WWI has been a part of leading this effort for the past three years and will continue being vocal about the need to reignite our statewide tourism marketing to the country and world.
• Creates a private/public partnership that will reignite our statewide tourism marketing
• The funding mechanism is a 2-to-1 private-to-public match. If the bill is adopted as currently written, in the next three years our tourism budget be as strong as $15 million per biennium
• Creates a new board of directors to collectively lead on Washington State’s tourism marketing decisions
• The bill has specific language that requires this new board to focus tourism marketing on rural economies, where many of our wineries are located
Washington State wineries operate in all three tiers (manufacturing, distributing and retailing) and must comply with all applicable laws while acting as retailers, as distributors, or as manufacturers unless specifically exempted. All three of these activities are tied to the winery license itself and any violations are levied against the full license, which means the LCB has the power to shut down your wholesale and production activity for the entire duration of a violation from a winery’s retail portion of their business. WWI learned about this concern this past fall while speaking with the Liquor and Cannabis Board as well as our partners in the Washington beer and spirits industries. We then teamed up to write legislation for the 2018 session to fix this problem and create certainty moving forward that no winery, brewery, or distillery will experience a complete and total business shutdown for having a violation on the retail side of their business.
• Defines retailing activities where manufacturers are interfacing with the public as “ancillary activities”
• Charges the Liquor & Cannabis Board with adopting a penalty schedule for violations incurred while performing ancillary activities
• Penalties may not include the suspension or revocation of the winery license
• The Liquor & Cannabis Board would still maintain the ability levy significant penalties, suspend interactions with the public when appropriate and protect the public interest
Through a series of audits, a discovery was made that alcohol manufacturers are considered “food” for the purposes of a Washington State Department of Agriculture (WSDA) food storage warehouse license. The license costs $200/annually and includes inspection of the warehouse to ensure proper sanitation is taking place to protect the food from any potential harm to the consumer.
WWI contacted WSDA and, through a series of discussions, explained why alcohol storage does not pose a risk to the consumer and therefore does not belong under this license. WSDA agreed that the warehousing of product produced by alcohol manufacturers does not pose a risk and helped draft legislation to remove our industries from the license and inspection requirement.
• Exempts alcohol manufacturers and distributers licensed under RCW 66.24 from the WSDA issued food storage warehouse license
• Removes a $200 annual cost on these business that is agreed between WSDA and the industry to not be necessary
• States that the exemption only applies if alcohol is the only product being stored in the warehouse
The new round of work towards a comprehensive federal Farm Bill is already underway and stakeholders are meeting to begin creating their priorities for funding. Congress has made their intention clear that they want to start negotiations early to avoid a similar outcome to the last effort, which ended in a multi-year delay in implementation due to challenges coming to agreement on major provisions of the bill.
The Washington Wine Institute is actively working with our partners in Washington State and around the country in advocating for full funding of MAP and FMD funding. In addition, we are asking Congress to continue their long-standing belief in investing in specialty crop block grants that have funded many industry-improving research and marketing programs for Washington State wine.
For more than two years our national association WineAmerica as well as the Washington Wine Institute (WWI) have made our top federal priority the passage of the Craft Beverage and Modernization Tax Reform Act (CBMTRA), which is an unprecedented national beer, wine, and spirits industries’ combined effort to pass a long-overdue federal alcohol excise tax reform. WineAmerica, our national wine industry trade association fighting every day to protect and enhance our industry within Congress and our federal regulatory agencies, masterfully lead the effort for our industry and WWI rallied our congressional delegation and lobbied Congress to support this much-need tax reform.
We are elated to share with you today that our federal alcohol excise tax reform language survived through negotiations and will be included in the final passage of federal tax reform!!
We’d like to send a huge thank the members of the Washington State congressional delegation for their leadership in co-sponsoring the CBMTRA including:
• Senator Maria Cantwell
• Senator Patty Murray
• Rep Suzan DelBene
• Jaime Herrera Beutler
• Rep Dan Newhouse
• Rep Cathy McMorris Rodgers
• Rep Derek Kilmer
• Rep Pramila Jayapal
• Rep Dave Reichert
The bill will save all wineries, regardless of size, significant money through an excise tax credit mechanism which reduces the effective rate. For example, while the federal excise tax on table wine will remain unchanged at $1.07 per gallon:
• there will be a new tax credit of $1.00 on the first 30,000 gallons produced, making the effective tax rate $0.07 (seven cents) per gallon.
• The tax credit on the next 100,000 gallons produced is $0.90, and
• between 130,000 and 750,000 gallons produced the tax credit will be $0.535
• The tax credit limits out at a ceiling of 750,000 gallons.
• The legislation also increases the allowable alcohol level for table wine from 14% to 16%, reflecting the tangible impact of climate change on grape ripening in some states (this is HUGE for Washington State wines!)
• The small producer tax credit may be applied to sparkling wine OR table wine produced by a winery (but not both)