AN ACT Relating to alcohol sales by distributors; and amending RCW 66.24.290 and 66.28.185.

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

Sec. 1.  RCW 66.24.290 and 2010 1st sp.s. c 23 s 1301 are each amended to read as follows:

(1) Any microbrewer or domestic brewery or beer distributor licensed under this title may sell and deliver beer and strong beer to holders of authorized licenses direct, but to no other person, ((other than the board)) except as provided in RCW 66.28.185. Any certificate of approval holder authorized to act as a distributor under RCW 66.24.270 shall pay the taxes imposed by this section.

(a) Every such brewery or beer distributor shall report all sales to the board monthly, pursuant to the regulations, and shall pay to the board as an added tax for the privilege of manufacturing and selling the beer and strong beer within the state a tax of one dollar and thirty cents per barrel of thirty-one gallons on sales to licensees within the state and on sales to licensees within the state of bottled and canned beer, including strong beer, shall pay a tax computed in gallons at the rate of one dollar and thirty cents per barrel of thirty-one gallons.

(b) Any brewery or beer distributor whose applicable tax payment is not postmarked by the twentieth day following the month of sale will be assessed a penalty at the rate of two percent per month or fraction thereof. Beer and strong beer shall be sold by breweries and distributors in sealed barrels or packages.

(c) The moneys collected under this subsection shall be distributed as follows: (i) Three-tenths of a percent shall be distributed to border areas under RCW 66.08.195; and (ii) of the remaining moneys: (A) Twenty percent shall be distributed to counties in the same manner as under RCW 66.08.200; and (B) eighty percent shall be distributed to incorporated cities and towns in the same manner as under RCW 66.08.210.

(d) Any licensed retailer authorized to purchase beer from a certificate of approval holder with a direct shipment endorsement or a brewery or microbrewery shall make monthly reports to the liquor ((control)) and cannabis board on beer purchased during the preceding calendar month in the manner and upon such forms as may be prescribed by the board.

(2) An additional tax is imposed on all beer and strong beer subject to tax under subsection (1) of this section. The additional tax is equal to two dollars per barrel of thirty-one gallons. All revenues collected during any month from this additional tax shall be deposited in the state general fund by the twenty-fifth day of the following month.

(3)(a) An additional tax is imposed on all beer and strong beer subject to tax under subsection (1) of this section. The additional tax is equal to ninety-six cents per barrel of thirty-one gallons through June 30, 1995, two dollars and thirty-nine cents per barrel of thirty-one gallons for the period July 1, 1995, through June 30, 1997, and four dollars and seventy-eight cents per barrel of thirty-one gallons thereafter.

(b) The additional tax imposed under this subsection does not apply to the sale of the first sixty thousand barrels of beer each year by breweries that are entitled to a reduced rate of tax under 26 U.S.C. Sec. 5051, as existing on July 1, 1993, or such subsequent date as may be provided by the board by rule consistent with the purposes of this exemption.

(c) All revenues collected from the additional tax imposed under this subsection (3) shall be deposited in the state general fund.

(4) An additional tax is imposed on all beer and strong beer that is subject to tax under subsection (1) of this section that is in the first sixty thousand barrels of beer and strong beer by breweries that are entitled to a reduced rate of tax under 26 U.S.C. Sec. 5051, as existing on July 1, 1993, or such subsequent date as may be provided by the board by rule consistent with the purposes of the exemption under subsection (3)(b) of this section. The additional tax is equal to one dollar and forty-eight and two-tenths cents per barrel of thirty-one gallons. By the twenty-fifth day of the following month, three percent of the revenues collected from this additional tax shall be distributed to border areas under RCW 66.08.195 and the remaining moneys shall be transferred to the state general fund.

(5)(a) From June 1, 2010, through June 30, 2013, an additional tax is imposed on all beer and strong beer subject to tax under subsection (1) of this section. The additional tax is equal to fifteen dollars and fifty cents per barrel of thirty-one gallons.

(b) The additional tax imposed under this subsection does not apply to the sale of the first sixty thousand barrels of beer each year by breweries that are entitled to a reduced rate of tax under 26 U.S.C. Sec. 5051 of the federal internal revenue code, as existing on July 1, 1993, or such subsequent date as may be provided by the board by rule consistent with the purposes of this exemption.

(c) All revenues collected from the additional tax imposed under this subsection shall be deposited in the state general fund.

(6) The board may make refunds for all taxes paid on beer and strong beer exported from the state for use outside the state.

(7) The board may require filing with the board of a bond to be approved by it, in such amount as the board may fix, securing the payment of the tax. If any licensee fails to pay the tax when due, the board may forthwith suspend or cancel his or her license until all taxes are paid.

Sec. 2.  RCW 66.28.185 and 2017 c 160 s 1 are each amended to read as follows:

(1) A person holding a spirits distributor license issued pursuant to RCW 66.24.055 may sell spirits directly to bona fide, full-time employees, subject to the following requirements:

(a) No spirits may be sold under this section unless they are in such condition that they cannot reasonably be sold in the normal course of business, such as, for example, because of damage to the labels on individual bottles;

(b) No spirits may be sold under this section for less than the spirits distributor licensee's cost of acquisition;

(c) All sales of spirits made under this section are subject to the license issuance fee established by RCW 66.24.630(4) and the taxes imposed on a retail sale under RCW 82.08.150;

(d) No spirits may be sold under this section to a person who has been employed by the spirits distributor licensee for less than ninety days at the time of the sale or who is under the age of twenty-one;

(e) No person purchasing spirits under this section may sell such spirits by the drink or otherwise to a third person, or otherwise dispose of all or any part of such spirits in any manner or for any purpose other than personal use; and

(f) No spirits may be sold under this section by a person holding any license other than a spirits distributor license, whether or not the license held by such person permits the sale of spirits to consumers.

(2) A person holding a wine distributor license issued pursuant to RCW  66.24.200 may sell wine or cider directly to:

(a) Bona fide, full-time employees, subject to the following requirements:

(((a))) (i) No wine or cider may be sold under this section unless it is in such condition that it cannot reasonably be sold in the normal course of business, such as, for example, because of damage to the labels on individual bottles;

(((b))) (ii) No wine or cider may be sold under this section for less than the wine distributor licensee's cost of acquisition;

(((c))) (iii) All sales of wine or cider made under this section are subject to the same taxes that would be applicable if the sale were made to a consumer;

(((d))) (iv) No wine or cider may be sold under this section to a person who has been employed by the wine distributor licensee for less than ninety days at the time of the sale or who is under the age of twenty-one; and

(((e))) (v) No person purchasing wine or cider under this section may sell such wine or cider by the glass or otherwise to a third person, or otherwise dispose of all or any part of such wine or cider in any manner or for any purpose other than personal use; ((and

(v) All sales of malt beverages made under this section are subject to the same taxes that would be applicable if the sale were made at retail.

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