Download this document in MS Word format


AutoFill Template

NO. 140.  AN ACT RELATING TO WINE TASTING AND DIRECT SHIPPING OF WINE.

(S.58)

It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1.  PURPOSE

(a)  The primary purpose of this act is to make statutory changes in the Vermont shipping laws so that Vermont will be in compliance with the federal constitutional requirements regarding direct shipping of vinous beverages as laid out in Granholm v. Heald, 544 U.S. 460 (2005).  To that end, it is the purpose of this act to authorize both in-state and out-of-state wineries to ship wine to Vermont consumers and retailers on even‑handed terms.  It is further the purpose of this act to restrict sales of alcoholic beverages to underage individuals, collect all state excise and sales tax due on the commerce of alcoholic beverages, and ensure a transparent, enforceable and accountable distribution system for alcoholic beverages.

(b)  Secondary purposes of this act include:

(1)  Permitting conference centers to obtain a first or third class license so that they may serve alcoholic beverages when serving food.

(2)  Clarifying the regulation of wine tasting events.

* * * Wine Shipping * * *

Sec. 2.  7 V.S.A. § 2 (15) is amended to read:

(15)  “Manufacturer’s or rectifier’s license”: means a license granted by the liquor control board may grant to a manufacturer or a rectifier a license that permits the holder to manufacture or rectify, as the case may be, malt beverages and vinous beverages for export and for sale to bottlers or wholesale dealers, and the liquor control board may grant to a manufacturer or a rectifier a license to manufacture or rectify, as the case may be, or spirituous liquors for export and for sale to the liquor control board, upon application of such a manufacturer or rectifier and the payment to the liquor control board of the license fee as required by subdivision 231(1) of this title for either license.  The liquor control board may grant to a licensed manufacturer or rectifier a first class restaurant or cabaret license or first and third class restaurant or cabaret license permitting the licensee to sell alcoholic beverages to the public only at the manufacturer’s premises.  A manufacturer of malt beverages who also holds a first class restaurant or cabaret license may serve to a customer malt beverages by the glass, not to exceed eight glasses at one time and not to exceed four ounces in each glass.  The liquor control board may grant to a licensed manufacturer or a rectifier of malt beverages a second class license permitting the licensee to sell alcoholic beverages to the public only at the manufacturer’s or rectifier’s premises.  Upon application and payment of the license fee as required by subdivision 231(11) of this title, the liquor control board may grant to a licensed manufacturer or rectifier of vinous beverages up to 10 fourth class licenses permitting the licensee to sell such these beverages by the bottle to the public at the licensed premises provided that such the beverages were produced by fermentation by the manufacturer or rectifier in Vermont.  However, in no case may a person with an interest in more than one manufacturer’s or rectifier’s license have an interest in more than four fourth class licenses.  The manufacturer or rectifier shall pay directly to the commissioner of taxes, the sum of 26 1/2 cents per gallon for every gallon of malt beverage and the sum of 55 cents per gallon for each gallon of vinous beverage manufactured by the manufacturer or rectifier and provided for sale pursuant to the first class license or the second class license or the fourth class license or combination thereof held by the manufacturer or rectifier.  Holders of a manufacturer’s or rectifier’s second class or fourth class license for malt beverages may distribute, with or without charge, malt or vinous beverages by the glass, not to exceed two ounces per product and eight ounces in total, to all persons having attained the age of majority, which of legal drinking age.  The malt beverages must be consumed upon the premises of the holder of the license.  At the request of a person holding a first class or second class license, a holder of a manufacturer’s or rectifier’s license for malt beverages may distribute without charge to the management and staff of the license holder, provided they are of legal drinking age, no more than four ounces per person of a malt beverage or two ounces per person of a vinous beverage for the purpose of promoting the beverage.  Written notice shall be provided to the department of liquor control at least 10 days prior to the date of the tasting.  A licensed manufacturer or rectifier of vinous beverages may sell up to 2,000 gallons of vinous beverages manufactured in Vermont on invoice directly to first class and second class licensees provided the manufacturer or rectifier pays to the department an annual fee of $200.00.  The beverages may be delivered to the first class or second class licensee by common carrier or the manufacturer or rectifier’s own vehicles.  

Sec. 3.  7 V.S.A. § 63 is amended to read:

§ 63.  IMPORTATION OR TRANSPORTATION OF LIQUORS;

          PROHIBITIONS; PERSONAL IMPORT LIMIT; PENALTY

(a)  All spirituous liquors imported or transported into this state shall be imported or transported by and through the liquor control board.  A person, partnership, association or corporation importing or transporting or causing to be imported or transported into this state any spirituous liquors shall be imprisoned not more than one year, or fined not more than $1,000.00, or both.  However, it shall be lawful for a person to import or transport spirituous liquor into this state by first obtaining a permit from the liquor control board and a person may import or transport not more than eight quarts of spirituous liquors into this state in his or her own private vehicle or in his or her actual possession at the time of such importation without permit.

(b)  All Except as provided in section 66 of this title, all malt or vinous beverages, or both, imported or transported into this state shall be imported or transported by and through a wholesale dealer holding a wholesale dealer’s license issued by the liquor control board.  A person, partnership, association or corporation importing or transporting or causing to be imported or transported into this state any malt or vinous beverages, or both, shall be imprisoned not more than one year or fined not more than $1,000.00, or both.  Provided, however, that it shall be lawful for a person to import or transport malt or vinous beverages, or both, into this state by first obtaining a permit from the liquor control board and a person may import or transport not more than six gallons of malt or vinous beverages, or both, into this state in his or her own private vehicle or in his or her actual possession at the time of such importation without permit providing it is not for resale.

Sec. 4.  7 V.S.A. § 66 is amended to read:

§ 66.  VINOUS BEVERAGE SHIPPING PERMIT LICENSE; VINOUS

          BEVERAGES; DELIVERY REQUIREMENTS IN STATE;

           OUT OF STATE; PROHIBITIONS; PENALTIES

(a)  The department may grant a shipping permit to a second class licensee, provided that vinous beverages are the only alcoholic beverages sold by the licensee, to a fourth class licensee or to a holder of a license to manufacture or rectify vinous beverages, provided the licensee annually files an application in a form required by the department accompanied by an annual fee of $200.00.

(1)  A holder of a fourth class license or a license to manufacture or rectify vinous beverages granted a shipping permit under this section may deliver to an individual purchaser for personal consumption no more than one case of no more than 12 bottles of vinous beverages per shipment or effect delivery of that amount of vinous beverages by a common carrier, as defined in 5 V.S.A. § 1821, that delivers primarily freight or express.

(2)  A holder of a second class license granted a shipping permit under this section may effect delivery of vinous beverages only by common carrier as required by this section.

A manufacturer or rectifier of vinous beverages licensed in Vermont may be granted an in-state consumer shipping license by filing with the department of liquor control an application in a form required by the department accompanied by a copy of the applicant’s current Vermont manufacturer’s license and the fee as required by subdivision 231(7)(A) of this title.  This consumer shipping license may be renewed annually by filing the renewal fee as required by subdivision 231(7)(A) of this title accompanied by a copy of the licensee’s current Vermont manufacturer’s license.

(b)  Vinous beverages shall be delivered pursuant to an invoice that includes the name of the licensee and the name and address of the purchaser.  The vinous beverages shall be delivered only to the address on the invoice and only to an individual who is age 21 or over.  The licensee shall file a copy of the invoice with the department prior to shipping and shall retain a copy of the invoice for two years.

A manufacturer or rectifier of vinous beverages licensed in another state that operates a winery in the United States and holds valid state and federal permits and licenses may be granted an out-of-state consumer shipping license by filing with the department of liquor control an application in a form required by the department accompanied by copies of the applicant’s current out-of-state manufacturer’s license and the fee as required by subdivision 231(7)(B) of this title.  This consumer shipping license may be renewed annually by filing the renewal fee as required by subdivision 231(7)(B) of this title accompanied by the licensee’s current out-of-state manufacturer’s license.  For the purposes of this subsection and subsection (c) of this section, “out‑of‑state” means any state other than Vermont, any territory or possession of the United States, and does not include a foreign country.

(c)  A licensed manufacturer or rectifier holding a shipping permit shall pay directly to the commissioner of taxes the tax on vinous beverages as required by subsection 421(a) of this title, shipped pursuant to this section.  A manufacturer or rectifier of vinous beverages that is licensed in-state or out‑of‑state and holds valid state and federal permits and operates a winery in the United States may apply for a retail shipping license by filing with the department of liquor control an application in a form required by the department accompanied by a copy of their in-state or out of state license and the fee as required by subdivision 231(7)(C) of this title.  The retail shipping license may be renewed annually by filing the renewal fee as required by subdivision 231(7)(C) of this title accompanied by the licensee’s current in-state or out-of-state manufacturer’s license.  This license permits the holder, which includes the holder’s affiliates, franchises, and subsidiaries, to sell up to 2,000 gallons of vinous beverages a year directly to first or second class licensees and deliver the beverages by common carrier or the manufacturer’s or rectifier’s own vehicles, provided that the beverages are sold on invoice, and no more than 40 gallons per month are sold to any single first or second class licensee.  The retail shipping license holder shall provide to the department documentation of the annual and monthly number of gallons sold. 

(d)  A holder of a shipping permit under this section shall not deliver or have delivered any vinous beverages to any person under the age of 21.  Pursuant to a consumer shipping license granted under subsection (a) or (b) of this section, the licensee may ship vinous beverages produced by the licensee:

(1)  Only to private residents for personal use and not for resale.

(2)  No more than 12 cases containing no more than 29 gallons of vinous beverages to any one Vermont resident in any calendar year.

(3)  Only by common carrier certified by the department.  The common carrier shall comply with all the following:

(A)  Deliver vinous beverages pursuant to an invoice that includes the name of the licensee and the name and address of the purchaser.

(B)  On delivery, require a valid form of photographic identification from a recipient who appears to be under the age of 30.

(C)  Require the recipient to sign an electronic or paper form or other acknowledgement of receipt.

(e)  A common carrier shall not deliver vinous beverages until it has complied with the provisions of subsections 239(a) and (b) of this title, and its compliance has been certified by the department of liquor control.  No employee of a common carrier shall deliver vinous beverages until that employee completes the training required by subsection 239(c) of this title.

A holder of any shipping license granted pursuant to this section shall:

(1)  Ensure that all containers of alcoholic beverages shipped under this section are clearly labeled:  “contains alcohol; signature of individual age 21 or older required for delivery.”

(2)  Not ship to any address in a municipality that the department identified as having voted to be “dry.”

(3)  Retain a copy of each record of sale for a minimum of five years from the date of shipping.

(4)  Report at least twice a year to the department of liquor control in a manner and form required by the department all the following information:

(A)  The total amount of vinous beverages shipped into or within the state for the preceding six months.

(B)  The names and addresses of the purchasers to whom the vinous beverages were shipped.

(C)  The date purchased, if appropriate, the name of the common carrier used to make each delivery, and the quantity and value of each shipment.

(5)  Pay directly to the commissioner of taxes the amount of tax on the vinous beverages shipped under this section pursuant to subsection 421(a) of this title, and comply with the provisions of chapter 233 of Title 32, 24 V.S.A. § 138, and any other legally authorized local sales taxes.  Delivery in this state shall be deemed to constitute a sale in this state at the place of delivery and shall be subject to all appropriate taxes levied by the state of Vermont.

(6)  Permit the state treasurer, the department of liquor control, and the department of taxes, separately or jointly, upon request, to perform an audit of its records. 

(7)  If an out-of-state license holder, be deemed to have consented to the jurisdiction of the department of liquor control or any other state agency and the Vermont state courts concerning enforcement of this or other applicable laws and regulations. 

(8)  Not have any direct or indirect financial interest in a Vermont wholesale dealer or retail dealer, including a first, second, or third class license.

(9)  Comply with all liquor control board laws and regulations. 

(f)  For any violation of this section, the board of liquor control shall have the power to suspend or revoke a certification or permit issued under this section.  A common carrier shall not deliver vinous beverages until it has complied with the training provisions in subsections 239(a) and (b) of this title and been certified by the department of liquor control.  No employee of a certified common carrier may deliver vinous beverages until that employee completes the training provisions in subsection 239(c) of this title.  A common carrier shall deliver only vinous beverages that have been shipped by the holder of a license issued under this section.

(g)  The department of liquor control and the department of taxes may adopt rules and forms necessary to implement this section.

(h)  Direct shipments of vinous beverages are prohibited if the shipment is not specifically authorized and in compliance with this section.  Any person who knowingly makes, participates in, imports, or receives a direct shipment of vinous beverages from a person who is not licensed or certified as required by this section may be fined not more than $1,000.00 or imprisoned not more than one year, or both.

(i)  A licensee under this section or a common carrier that ships vinous beverages to an individual under 21 years of age shall be fined not less than $1,000.00 or more than $3,000.00 or imprisoned not more than two years, or both.

(j)  For any violation of this section, the liquor control board may suspend or revoke a license issued under this section, among all other remedies available to the board.

* * * Serving Alcoholic Beverages with Food Requirement * * *

Sec. 5.  7 V.S.A. § 2(5) and (17) are amended to read:

(5)  “Cabaret license”: for the purpose of this title shall mean means a first class license or first and third class licenses where the business is devoted primarily to providing entertainment, dancing, and the sale of alcoholic beverages to the public and not the service of food.  The holder of a “cabaret license” shall dispense serve food to the public at all times when open for business and shall have adequate and sanitary space and equipment for preparing and serving food.  However, the gross receipts from the sale of food shall be less than the combined receipts from the sales of alcoholic beverages, entertainment, and dancing in the prior reporting year.  All laws and regulations pertaining to a first class license or first and third class licenses shall apply to the first class or first and third class cabaret licenses.

(17)  “Restaurant”: means a space in a suitable building, approved by the liquor control board, occupied, used, maintained, advertised, or held out to the public to be a place where meals are regularly food is served without at all times when open for business and there are no sleeping accommodations, such space being provided, in the judgment of the board, with.  The space shall have adequate and sanitary kitchen and dining room capacity and having employed therein such the number and kinds of servants and employees as the liquor control board may by regulation prescribe for preparing, cooking, and serving suitable food for its guests and patrons as required by the liquor control board.

* * * Wine Tasting * * *

Sec. 6.  7 V.S.A. § 67 is added to read:

§ 67.  WINE TASTINGS; PERMIT; PENALTIES

(a)  Provided an applicant submits to the department of liquor control a written application in a form required by the department accompanied by the permit fee as required by subdivision 231(15) of this title at least 15 days prior to the date of the wine tasting event and the applicant is determined to be in good standing, the department of liquor control may grant a permit to conduct a wine tasting event to:

(1)  A second class licensee.  The permit authorizes the employees of the permit holder to dispense vinous beverages to retail customers of legal age on the licensee’s premises.  Vinous beverages for the tasting shall be from the inventory of the licensee or purchased from a wholesale dealer.  Pursuant to this permit, a second class licensee may conduct no more than one wine tasting per month.

(2)  A licensed manufacturer or rectifier of vinous beverages.  The permit authorizes the permit holder to dispense vinous beverages produced by the manufacturer or rectifier to retail customers of legal age for consumption on the premises of a second class licensee or at a farmers’ market.  Pursuant to this permit a manufacturer or rectifier may conduct no more than one tasting a day on the premises of a second class licensee.  No more than four wine tasting permits per month for a tasting event held on the premises of second class licensees, and no more than 60 wine tasting permits per year for a tasting event held on the premises of a farmers’ market shall be issued to any manufacturer or rectifier.

(3)  A licensed manufacturer or rectifier of vinous beverages with a fourth class license.  The permit authorizes the licensee to dispense, with or without charge, vinous beverages by the glass, not to exceed two ounces per product and a total of eight ounces to a retail customer of legal age for consumption on the licensee’s premises.

(b)  A wine tasting event held pursuant to this section, not to include wine tasting events conducted on the premises of a manufacturer or rectifier or on the premises of a fourth class licensee pursuant to subdivision (a)(3) of this section or a promotional tasting pursuant to subdivision (d)(1) of this section:

(1)  May continue for no more than six hours in duration, with no more than six vinous beverages to be offered at a single event, and no more than two ounces of any single vinous beverage and no more than a total of eight ounces of various vinous beverages to be dispensed to a customer.  No more than four customers may be served at one time.

(2)  Shall be conducted totally within an area that is clearly cordoned off by barriers that extend no further than 10 feet from the point of service, and a sign that clearly states that no one under the age of 21 may participate in the wine tasting shall be placed in a visible location at the entrance to the wine tasting area.

(c)  The holder of a permit issued under this section shall keep an accurate accounting of the vinous beverages consumed at a tasting event and shall be responsible for complying with all applicable laws under this title. 

(d)  Promotional wine tasting. 

(1)  At the request of a holder of a first class or second class license, a holder of a manufacturer’s, rectifier’s, or wholesale dealer’s license may distribute without charge to the first or second class licensee’s management and staff, provided they are of legal drinking age, two ounces per person of vinous beverages for the purpose of promoting the beverage.  No permit is required under this subdivision, but written notice of the event shall be provided to the department of liquor control at least 10 days prior to the date of the tasting.

(2)  A holder of a wholesale dealer’s license may dispense vinous beverages for promotional purposes at the wholesale dealer’s premises without charge to invited employees of first, second, and third class licensees, provided the invited employees are of legal drinking age, and the wholesale dealer obtains a permit pursuant to subsection (a) of this section. 

(e)  No individual who is under the age of 18 or who has not received training as required by the department may serve alcoholic beverages at an event under this section.

(f)  The holder of a permit issued under this section that provides alcoholic beverages to an underage individual or permits an individual under the age of 18 to serve alcoholic beverages at a wine tasting event under this section shall be fined not less than $500.00 nor more than $2,000.00 or imprisoned not more than two years, or both.

Sec. 7.  7 V.S.A. § 231 is amended to read:

§ 231.  FEES FOR LICENSES

The following fees shall be paid:

* * *

(7)  For a shipping license for vinous beverages:

(A)  In-state consumer shipping license, initial and renewal, $300.00.

(B)  Out-of-state consumer shipping license, initial and renewal, $300.00.

(C)  Retail shipping license, initial and renewal, $200.00.

* * *

Sec. 8.  REPEAL

The following are repealed:

(1)  7 V.S.A. § 2(32)(relating to the definition of wine tasting permit).

(2)  7 V.S.A. § 231(12)(relating to direct shipping of vinous beverages).

Sec. 9.  REPORT OF THE COMMISSIONER OF LIQUOR CONTROL

By December 1, 2007, the commissioner of liquor control shall report to the house committees on appropriations, on general, housing and military affairs, and on ways and means and to the senate committees on appropriations, on economic development, housing and general affairs, and on finance the amount of increase in fiscal year 2007 general fund revenues resulting from the fees for in-state and out-of-state vinous beverage consumer shipping licenses as required in 7 V.S.A. § 231(7)(A) and (B).

Sec. 9a. SEVERABILITY

If any provision of this act or its application or circumstance is held invalid or in violation of the constitution or laws of the United States, the invalidity or the violation shall not affect other provisions of this act which can be given effect without the invalid provision or application, and to this end, the provisions of this act are severable.

Sec. 10.  EFFECTIVE DATE

This act shall take effect on passage.

Approved:  May 10, 2006



Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont


www.leg.state.vt.us