July 15, 2005, 12:00 AM

New York, Connecticut enact laws to allow direct-to-consumer wine sales

In the first state wine laws to follow a May U.S. Supreme Court ruling that favored Internet wine sales, the governors of New York and Connecticut have signed into law measures that allow interstate direct-to-consumer shipments.

Kurt Peters

Executive Editor

 

In the first state wine laws to follow a May U.S. Supreme Court ruling that favored Internet wine sales, the governors of New York and Connecticut have signed into law measures that allow interstate direct-to-consumer shipments.

The Supreme Court’s ruling required all states to have laws that treat direct-to-consumer sales consistently for in-state and out-of-state wine sellers. New York and Connecticut, which were among eight states that allowed direct-to-consumer sales only by in-state wine sellers, have enacted laws that allow both interstate and intra-state direct-to-consumer sales.

New York Gov. George Pataki and Connecticut Gov. M. Jodi Rell signed into law bills this week that allow out-of-state as well as in-state wineries to sell direct to consumers in their states. “New York’s wine industry is one of the fastest growing and most successful segments of the state’s agriculture industry,” Pataki said.

The new laws are recognized by supporters as measures that will help the states generate more tax revenue as well as help independent wine sellers work around networks of wholesale wine distributors that control sales through retail stores.

Sarah Hewitt, an attorney who specializes in online retail at New York law firm Brown Raysman Millstein Felder & Steiner LLP, expects several other states to also enact laws allowing both interstate and intra-state Internet wine sales. “There will be more states following suit shortly,” she says.

New York included a stipulation, however, that limits interstate d2c shipments from states that reciprocate by allowing d2c shipments from New York wine sellers -- an option permitted under the Supreme Court ruling, Hewitt says.

Both New York and Connecticut also included provisions that require wine shippers to collect sales taxes and secure the signatures of wine recipients while checking their identifications to assure they’re at least 21 years of age. Other restrictions include a limit set by New York of a maximum number of 36 cases of wine per year delivered to a single consumer.

Not all states affected by the Supreme Court ruling are moving toward allowing more Internet wine sales, however. One state heading in the opposite direction is Michigan, where the state legislature is considering legislation that would adhere to the high court`s ruling on consistency by prohibiting intra-state direct-to-consumer wine sales. Michigan currently prohibits only interstate direct-to-consumer wine sales.

The Michigan bill is opposed by many of Michigan`s wineries, Hewitt says, because a strict interpretation of it could prohibit wine sales to consumers who visit winery gift shops and attend wine-tastings.

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