It's a win for wine: New N.D. laws, court ruling open market
Tony Osowski may want to uncork a bottle of wine to celebrate. A change to North Dakota law allows Osowski's business, Vintner's Cellar, to be a domestic winery, so he can sell wine directly to consumers. Another 2005 legislative change allows No...
Tony Osowski may want to uncork a bottle of wine to celebrate.
A change to North Dakota law allows Osowski's business, Vintner's Cellar, to be a domestic winery, so he can sell wine directly to consumers.
Another 2005 legislative change allows North Dakota winemakers to ship wine directly to out-of-state consumers through a reciprocal agreement. On Aug. 1, North Dakota will be the 14th state to allow the reciprocal privilege.
And on Monday, the U.S. Supreme Court struck down laws in New York and Michigan that banned the shipment of wine from out-of-state wineries. Twenty-four states have such laws.
All this means North Dakota winemakers like Osowski may have a larger marketplace to sell their product.
"Hopefully we'll soon be rolling the way we should be," said Osowski, who has wineries in Fargo and Grand Forks.
On a 5-4 decision, the Supreme Court said states that ban direct shipment from out-of-state wineries while allowing in-state producers to ship directly to customers discriminate against interstate commerce.
The states will have to review their laws to make sure in-state and out-of-state wineries are treated equally.
While South Dakota is one of 24 states that ban direct shipments from out-of-state wineries, the ruling should have little effect on the state, South Dakota Attorney General Larry Long said Monday.
South Dakota also doesn't allow shipments from instate wineries, so it does not violate the constitutional ban on discrimination against interstate commerce, Long said.
But some of the 24 states could allow out-of-state shipments.
"This has been long awaited," said Gary Anderson, director of income, sales, oil and special taxes for the North Dakota Tax Department.
He said it enhances North Dakota's six domestic wineries' opportunity and ability to sell to customers in other states.
"It should open the door to all states," he said.
He said the Tax Department attorneys will study the Supreme Court decision to ensure that North Dakota law on direct shipments from outside the state complies with the decision; in other words: "Are we treating the California and Colorado wineries different from our own?"
A bill passed this session allows licensed wineries, wholesalers and retailers in North Dakota to ship wine to a resident of another state as long as that state allows North Dakotans to receive wine without additional state tax, fees or other charges.
Greg Kempel, co-owner of Maple River Winery in Casselton, N.D., said 10 percent to 15 percent of his sales are related to the Internet. This holiday season, the business shipped wine to 14 states. In August, 10 more states will be added, thanks to the legislative change of House Bill 1325. Pointe of View Winery in Burlington, N.D., will begin shipping wine in August when the reciprocal agreement goes into effect, said Jeff Peterson, one of the owners. While the Supreme Court decision doesn't have a direct impact on the state, it's a win for the wine industry, Peterson said. "It clarified a lot of questions," he said.
The Associated Press contributed to this report
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