Out-of-state Wineries May Ship to New York State
- Sales Tax News
- Nov 5, 2013 | Gail Cole
A New York State Department of Taxation and Finance “whether it must collect sales tax on its sales of bottled wine in the State.” The question is answered in an advisory opinion, recently released.
According to the 21st Amendment of the United States Constitution:
“The transportation or importation into any state, territory, or possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited.”
So what are the dos and don’ts of shipping wine, or any alcoholic beverage, across state lines? It depends on the state into which the wine is being shipped.
The Wine Spectator explained the situation succinctly in 2005, comparing states to “old-style dictatorships” in the process:
“Each state has the right to control how alcohol is sold within—and across—its borders. Therein lies the problem. Instead of an orderly, unified system that allows wine commerce to flow freely among all the states, we have a tangle of laws more akin to the protectionist trade barriers and the ‘most-favored nation’ trading-status of global politics.
In the end, you, the consumer, are left to puzzle over why you can’t send a holiday bottle of Chardonnay to your aunt in Florida or why you can’t get your hands on that boutique Pinot Noir you enjoyed on your last visit to Sonoma. In fact, if you try to do so, you may be committing a crime.”
It is, in fact, possible for out-of-state wineries to ship wine directly to consumers in New York. But there’s a caveat: out-of-state wine retailers must agree to collect New York sales tax on New York sales. The advisory opinion notes:
“Using the authority conferred by the Twenty-First Amendment, the State has conditioned permission to sell wine produced outside the State that is shipped directly to a resident in the State on, among other requirements, the seller collecting sales tax and otherwise complying with the duties of a vendor under the Tax Law.”
Relevant tax law referenced in the opinion reads:
“… [A]ny holder of a license to manufacture wine in any other state who obtains an out-of-state direct shipper’s license, as provided in this section, may ship no more than thirty-six cases (no more than nine liters each case) of wine produced by such license holder per year directly to a resident of New York who is at least twenty-one years of age, for such resident’s personal use and not for resale ….”
Sellers must “file returns with and pay to the New York State Department of Taxation and Finance all state and local sales taxes and excise taxes due on sales into this state in accordance with the applicable provisions of the tax law relating to such taxes, the amount of such taxes to be determined on the basis that each sale in this state was at the location where delivery is made.”
The law explains that sellers must “execute a written consent to the jurisdiction of this state, its agencies and instrumentalities and the courts of this state concerning enforcement of this section and any related laws, rules, or regulations, including tax laws, rules or regulations….”
Pour that out-of-state wine
So if you live in New York and enjoy hard to find California wines, or Oregon wines, or Washington wines, or even Florida wines (yes, they exist), you’re in luck. You may contact the out-of-state retailer of those wines and ask them to ship the wines directly to you. And they can ship them to you, provided you’re of age and they’re willing to comply with New York State sales tax laws.
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