Skelos Announces Passage Of New Law Authorizing Direct Wine Shipments

Dean G. Skelos

June 24, 2005

New York State Senate Deputy Majority Leader Dean G. Skelos (R-Rockville Centre) today announced the passage of legislation authorizing the direct shipment of wine into and out of New York State. The bill reflects a three way agreement between the Senate, the Governor and the Assembly.

"For several years, I have been working to enable Long Island wineries to ship their products to customers in other states," said Senator Skelos. "From an economic development standpoint, this new law will strengthen Long Island’s wine industry, create new jobs and allow customers across the country to enjoy the fine wines that we produce."

The legislation will put in place the necessary regulatory, reporting and revenue-collecting systems to ensure an effective and responsible transition to a new system of marketing and selling wine in New York.

The legislation will:

> continue to allow New York State wineries and farm wineries to make shipments to in-state customers, but limit those shipments to 36 cases annually. In-state wine shipments have never been prohibited in New York;

> establish reciprocal wine shipping privileges between New York and other states. This would enable wine manufactured by licensed New York wineries and farm wineries to be shipped to individual customers in other states that have reciprocal direct shipping statutes. These out-of-state wineries would then be authorized to ship wine directly to customers in New York State. The legislation imposes a limit on the amount of wine that can be shipped to any individual customer to 36 cases-per-year;

> require out-of-state shippers to obtain a license from the New York State Liquor Authority and adhere to strict reporting requirements and regulations when carrying and delivering wine into New York. Direct shipments could only be made to individual adult consumers in New York, for personal use only. Proposed regulations would require carriers to obtain the signature of a person over 21 years old at the delivery address; and

> subject all wine shipped from New York to the payment of all New York alcoholic beverage taxes. Wine shipped into New York would be subject to the payment of all state and local sales taxes and excise taxes.

Legislative action on the issue comes following a landmark U.S. Supreme Court ruling last month, which struck down a New York law that barred out-of-state wineries from directly shipping their wine to New York residents. It also recognizes the constraints that the State's law has placed on New York's wineries ability to conduct business in other states.

New York is the third-largest wine producing state in America, with 218 wineries statewide. The industry employs 18,000 workers and annually generates more than $500 million in gross sales, together with $85 million in state and local tax revenue. Over three million people visit the state’s wineries every year, with one-third of them coming from out of state. Many New York winery owners, particularly those who operate smaller wineries, have argued that current state law prevents them from accommodating thousands upon thousands of these out-of-state visitors once they leave New York and return home.

It’s been estimated that authorizing direct shipments would raise as much as $3.8 million a year in increased revenues for New York State.