NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A1248
SPONSOR: Paulin TITLE OF BILL:
An act to amend the alcoholic beverage control law, in relation to
providing for certain limited direct interstate shipments of wine for
off-premises consumption
PURPOSE OR GENERAL IDEA OF BILL:
To allow out-of-state wine retailers to ship wine to New York customers,
so long as the retailer obtains an out-of-state shipper's license.
SUMMARY OF SPECIFIC PROVISIONS:
Section one amends the heading of section 79-c of the alcoholic beverage
control law.
Section two adds a new section 79-d to the alcoholic beverage control
law to allow out-of-state retailers to ship wine to New York customers,
so long as the retailer first obtains an out-of-state shipper's license.
Section three provides the effective date.
JUSTIFICATION:
In June of 2019, the Supreme Court ruling in Tennessee Wine v. Thomas
declared a Tennessee state law imposing durational residency require-
ments on persons and companies wishing to operate retail liquor stores
in the state unconstitutional. The law was found to have violated the
dormant Commerce Clause of the Constitution, which provides that any
state law discriminating against out-of-state goods or nonresident
economic actors may be sustained only upon a showing that it is narrowly
tailored to advance a legitimate purpose. Essentially, a law may not
plainly favor residents over non-residents, absent a legitimate purpose.
In its analysis, the Court maintained that the non-discrimination prin-
ciples that it had previously tackled with respect to manufacturers also
apply to retailers, meaning states may not enact laws that strictly
promote instate interests while discriminating against out-of-state
actors.
Currently, New York State consumers are not authorized to receive wine
shipments from out-of-state retailers. This legislation will allow out-
of-state retailers to ship wine to New York customers, so long as they
first obtain an out-of-state shipper's permit. The current system in our
state which prevents New Yorkers from receiving wine shipments from
out-of-state retailers is in contrast with the protectionism schemes the
Court in Tennessee Wine invalidated.
Furthermore, a change to our law is critical if New York is to influence
other states to change their laws to also allow for out-of-state ship-
ments to come into their states. This bill will help to further legiti-
mize a national marketplace for wine shipping. It will also bring in
needed tax revenue to our state. Out-of-state retailers who go through
the proper channels provided for in this bill to obtain a permit should
be able to ship wine to New York customers without discrimination.
LEGISLATIVE HISTORY:
A.799, 2021 and 2022, referred to economic development. Same as
S.7740 of 2022, referred to commerce.
A.8899, 2019 and 2020, referred to economic development.
FISCAL IMPLICATIONS:
Increased tax revenue to the state.
