Read first time 01/13/2006.   Referred to Committee on Labor, Commerce, Research & Development.

     AN ACT Relating to the shipment of wine from wine manufacturers directly to Washington consumers; amending RCW 66.24.210; adding new sections to chapter 66.20 RCW; and repealing RCW 66.12.190, 66.12.200, 66.12.210, and 66.12.220.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   The holder of a license to manufacture wine issued by this state or another state may ship its wine to a person who is a resident of Washington and is twenty-one years of age or older for that person's personal use and not for resale.

NEW SECTION.  Sec. 2   Before wine may be shipped by a domestic winery or an out-of-state winery to a person who is a resident of Washington, the winery must:
     (1) Obtain a wine shipper's permit under procedures prescribed by the board by rule and pay a fee established by the board, if the winery is located outside the state; or
     (2) Be licensed as a domestic winery by the board and have paid the annual license fee.

NEW SECTION.  Sec. 3   (1) An applicant for a wine shipper's permit under section 2 of this act must:
     (a) Operate a winery located in the United States;
     (b) Provide the board a copy of its valid license to manufacture wine issued by another state;
     (c) Certify that it holds all state and federal licenses and permits necessary to operate a winery; and
     (d) Register with the department of revenue under RCW 82.32.030.
     (2) Holders of a winery certificate of approval under RCW 66.24.206(1)(a) are deemed to hold a wine shipper's permit without further application or fee, if the holder meets all requirements for a wine shipper's permit. A winery certificate of approval holder who wants to ship wine under its wine shipper's permit privilege must notify the liquor control board in a manner determined by the board before shipping any wine to a Washington consumer.
     (3) Holders of a wine shipper's permit must:
     (a) Pay the tax under RCW 66.24.210 for sales of wine to Washington state residents; and
     (b) Collect and remit to the department of revenue all applicable state and local sales and use taxes imposed by or under the authority of chapters 82.08, 82.12, and 82.14 RCW on all sales of wine delivered to buyers in this state, regardless of whether the permit holder has a physical presence in this state.

NEW SECTION.  Sec. 4   (1) A domestic winery or a wine shipper's permit holder must clearly label all wine cases or outside shipping packages of wine sent into or out of this state under this act to indicate that the package cannot be delivered to a person under twenty-one years of age or to an intoxicated person.
     (2) A domestic winery or a wine shipper's permit holder must ensure that the private carrier used to deliver wine (a) obtains the signature of the person who receives the wine upon delivery, (b) verifies the age of the recipient, and (c) verifies that the recipient does not appear intoxicated at the time of delivery.

NEW SECTION.  Sec. 5   (1) A wine shipper's permit holder and a domestic winery must report to the board, on or before the twentieth day of each month, all shipments of wine made during the preceding calendar month directly to Washington consumers under a wine shipper's permit or a domestic winery license in effect for all or any portion of the preceding year. All reports will be on forms prescribed by the board.
     (2) A wine shipper's permit holder, a winery certificate of approval holder, or domestic winery who advertises or offers wine for direct shipment to customers within this state must clearly and conspicuously display the permit or license number in its advertising.

NEW SECTION.  Sec. 6   A fee for a wine shipper's permit may be established by the board.

NEW SECTION.  Sec. 7   (1) Holders of a wine shipper's permit are deemed to have consented to the jurisdiction of Washington concerning enforcement of this act and all laws, rules, and regulations related to the shipment of wine from wine manufacturers directly to consumers.
     (2)(a) A permit issued under this act to a wine manufacturer located outside this state who fails to comply with the provisions of this act shall be suspended or revoked.
     (b) The privilege to ship wine directly to Washington consumers under a domestic winery license shall be suspended or revoked if the domestic winery fails to comply with the provisions of this act.

Sec. 8   RCW 66.24.210 and 2001 c 124 s 1 are each amended to read as follows:
     (1) There is hereby imposed upon all wines except cider sold to wine distributors and the Washington state liquor control board, within the state a tax at the rate of twenty and one-fourth cents per liter. There is hereby imposed on all cider sold to wine distributors and the Washington state liquor control board within the state a tax at the rate of three and fifty-nine one-hundredths cents per liter: PROVIDED, HOWEVER, That wine sold or shipped in bulk from one winery to another winery shall not be subject to such tax. The tax provided for in this section shall be collected by direct payments based on wine purchased by wine distributors. Except as provided in subsection (7) of this section, every person purchasing wine under the provisions of this section shall on or before the twentieth day of each month report to the board all purchases during the preceding calendar month in such manner and upon such forms as may be prescribed by the board, and with such report shall pay the tax due from the purchases covered by such report unless the same has previously been paid. Any such purchaser of wine whose applicable tax payment is not postmarked by the twentieth day following the month of purchase will be assessed a penalty at the rate of two percent a month or fraction thereof. The board may require that every such person shall execute to and file with the board a bond to be approved by the board, in such amount as the board may fix, securing the payment of the tax. If any such person fails to pay the tax when due, the board may forthwith suspend or cancel the license until all taxes are paid.
     (2) An additional tax is imposed equal to the rate specified in RCW 82.02.030 multiplied by the tax payable under subsection (1) of this section. All revenues collected during any month from this additional tax shall be transferred to the state general fund by the twenty-fifth day of the following month.
     (3) An additional tax is imposed on wines subject to tax under subsection (1) of this section, at the rate of one-fourth of one cent per liter for wine sold after June 30, 1987. After June 30, 1996, such additional tax does not apply to cider. An additional tax of five one-hundredths of one cent per liter is imposed on cider sold after June 30, 1996. All revenues collected under this subsection (3) shall be disbursed quarterly to the Washington wine commission for use in carrying out the purposes of chapter 15.88 RCW.
     (4) An additional tax is imposed on all wine subject to tax under subsection (1) of this section. The additional tax is equal to twenty-three and forty-four one-hundredths cents per liter on fortified wine as defined in RCW 66.04.010(((38))) (39) when bottled or packaged by the manufacturer, one cent per liter on all other wine except cider, and eighteen one-hundredths of one cent per liter on cider. All revenues collected during any month from this additional tax shall be deposited in the violence reduction and drug enforcement account under RCW 69.50.520 by the twenty-fifth day of the following month.
     (5)(a) An additional tax is imposed on all cider subject to tax under subsection (1) of this section. The additional tax is equal to two and four one-hundredths cents per liter of cider sold after June 30, 1996, and before July 1, 1997, and is equal to four and seven one-hundredths cents per liter of cider sold after June 30, 1997.
     (b) All revenues collected from the additional tax imposed under this subsection (5) shall be deposited in the health services account under RCW 43.72.900.
     (6) For the purposes of this section, "cider" means table wine that contains not less than one-half of one percent of alcohol by volume and not more than seven percent of alcohol by volume and is made from the normal alcoholic fermentation of the juice of sound, ripe apples or pears. "Cider" includes, but is not limited to, flavored, sparkling, or carbonated cider and cider made from condensed apple or pear must.
     (7) For the purposes of this section, out-of-state wineries shall pay taxes under this section on wine sold and shipped directly to Washington state residents in a manner consistent with the requirements of a wine distributor under subsections (1) through (4) of this section, except wineries shall be responsible for the tax and not the resident purchaser.

NEW SECTION.  Sec. 9   Sections 1 through 7 of this act are each added to chapter 66.20 RCW.

NEW SECTION.  Sec. 10   The following acts or parts of acts are each repealed:
     (1) RCW 66.12.190 (Wine shipments from out of state -- Limitations) and 1991 c 149 s 1;
     (2) RCW 66.12.200 (Out-of-state wine shipments -- Labeling) and 1991 c 149 s 2;
     (3) RCW 66.12.210 (Wine shipments from out of state from unlicensed shipper -- Penalties) and 1994 c 70 s 1 & 1991 c 149 s 3; and
     (4) RCW 66.12.220 (Out-of-state wine shipper's license -- Revocation) and 1991 c 149 s 4.