Thursday, June 22, 2006

Rendell, Pennsylvanians Deal With Direct Shipment Laws

Read all about the Pennsylvania laws and the Governor from the Philadelphia Inquirer.

Rendell offers a wine-shipping plan
Residents would be allowed to buy bottles from out-of-state wineries, but they would have to pay 18% "Johnstown" tax.
By Harold Brubaker (Inquirer Staff Writer)

A proposal by Gov. Rendell would allow Pennsylvania residents to legally order wine directly from most out-of-state wineries, as they've been able to do from Pennsylvania wineries for years.

The rub is that all wineries would have to charge the state's 18 percent "emergency" tax on those shipments. Consumers now pay the so-called Johnstown tax - imposed to help rebuild that city after a 1936 flood and never rescinded - on purchases at State Stores, but not on wine shipped directly from Pennsylvania wineries.

Rendell expressed confidence in an interview yesterday that his proposal would pass legislative muster. "It's clear that the financial impact on us will be limited, and it's clear that this will be plus for Pennsylvania consumers," he said.

But consumers may still have months to wait before the issue is settled.

The Republican and Democratic leaders of the House Liquor Control and the Senate Law and Justice Committees, which oversee the state's alcoholic beverage laws, met yesterday for the first time to discuss Rendell's proposal, said Dave Thomas, executive director of the House committee.

Because the legislature remains busy with property-tax and budget negotiations, Thomas said he doubted that legislation on direct wine shipments would be done until fall.

Rendell's draft legislation is a response to a U.S. Supreme Court ruling in May 2005 that a state may not allow its own wineries to ship directly to consumers if it prohibits out-of-state wineries from doing so.

Backed by that ruling, a Philadelphia-based federal judge in November ordered Pennsylvania authorities to stop enforcing laws that prohibit out-of-state wineries from shipping wine directly to Pennsylvanians.

Since the May 2005 Supreme Court decision, the number of legal direct-shipping states has increased to 33 from 25, according to Free the Grapes!, a coalition pushing for open wine shipments.

For the owners of Pennsylvania's 112 wineries, Rendell's proposal is generally positive. Some feared that the state would ban all direct shipments and restrict Pennsylvania wineries in ways to comply with the ruling.

"I'm glad to see they are trying to be reasonable," said John Kramb, owner of Adams County Winery and president of the Pennsylvania Wine Association.

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Contact staff writer Harold Brubaker at 215-854-4651 or