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.
STATE OF NEW YORK
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1248
2023-2024 Regular Sessions
IN ASSEMBLY
January 13, 2023
___________
Introduced by M. of A. PAULIN, WOERNER, LAVINE, DICKENS -- read once and
referred to the Committee on Economic Development
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
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The section heading of section 79-c of the alcoholic bever-
2 age control law, as amended by chapter 184 of the laws of 2005, is
3 amended to read as follows:
4 Direct interstate wine shipments by licensees to manufacturing wine.
5 § 2. Section 79-d of the alcoholic beverage control law is renumbered
6 section 79-e and a new section 79-d is added to read as follows:
7 § 79-d. Direct interstate wine shipments by retail licensees to sell
8 wine for off-premises consumption. 1. Authorization. Notwithstanding any
9 provision of law, rule or regulation to the contrary, any holder of a
10 license to sell wine for off-premises consumption in any other state who
11 obtains an out-of-state direct shipper's license, as provided in this
12 section, may ship no more than thirty-six cases (no more than nine
13 liters each case) of wine per year directly to a resident of New York
14 who is at least twenty-one years of age, for such resident's personal
15 use and not for resale. No person shall place an order for shipment of
16 wine unless they are twenty-one years of age or older. Any common carri-
17 er with a permit issued pursuant to this chapter to whom such out-of-
18 state shipper's license is presented is authorized to make delivery of
19 shipments provided for hereunder in this state in compliance with this
20 section.
21 2. License. Before sending any shipment hereunder to a resident in
22 this state, the out-of-state shipper shall first obtain a license from
23 the authority under procedures prescribed by rules and regulations of
24 the authority and after providing the authority with a true copy of its
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD02209-01-3
A. 1248 2
1 current license to sell wine for off-premises consumption in the appli-
2 cant's state of domicile after payment of an annual fee of one hundred
3 twenty-five dollars.
4 3. Licensee's responsibilities. The holder of an out-of-state direct
5 shipper's license shall:
6 (a) ship no more than thirty-six cases (no more than nine liters each
7 case) per year of wine to a New York state resident who is at least
8 twenty-one years of age, for such resident's personal use and not for
9 resale;
10 (b) ensure that the outside of each shipping container used to ship
11 wine directly to a New York resident is conspicuously labeled with the
12 words: "CONTAINS WINE - SIGNATURE OF PERSON AGE 21 OR OLDER REQUIRED
13 FOR DELIVERY - NOT FOR RESALE", or with other language specifically
14 approved by the New York state liquor authority;
15 (c) maintain records in such manner and form as the authority may
16 direct, showing the total amount of wine shipped into the state each
17 calendar year; the names and addresses of the purchasers to whom the
18 wine was shipped, the date purchased, the name of the common carrier
19 used to deliver the wine, and the quantity and value of each shipment;
20 (d) in connection with the acceptance of an order for a delivery of
21 wine to a New York resident, require the prospective customer to repre-
22 sent that he or she has attained the age of twenty-one years or more and
23 that the wine being purchased will not be resold or introduced into
24 commerce;
25 (e) require common carriers to:
26 (i) require a recipient, at the delivery address, upon delivery, to
27 demonstrate that the recipient is at least twenty-one years of age by
28 providing a valid form of photographic identification authorized by
29 section sixty-five-b of this chapter;
30 (ii) require a recipient to sign an electronic or paper form or other
31 acknowledgement of receipt as approved by the authority; and
32 (iii) refuse delivery when the proposed recipient appears to be under
33 twenty-one years of age and refuses to present valid identification as
34 required by subparagraph (i) of this paragraph;
35 (f) file returns with and pay to the New York state department of
36 taxation and finance all state and local sales taxes due on sales into
37 this state in accordance with the applicable provisions of the tax law
38 relating to such taxes, the amount of such taxes to be determined on the
39 basis that each sale in this state was at the location where delivery is
40 made;
41 (g) keep all records required by this section for three years and
42 provide copies of such records, upon written request, to the authority
43 or the department of taxation and finance;
44 (h) permit the authority or the department of taxation and finance to
45 perform an audit of such out-of-state shipper upon request;
46 (i) execute a written consent to the jurisdiction of this state, its
47 agencies and instrumentalities and the courts of this state concerning
48 enforcement of this section and any related laws, rules, or regulations,
49 including tax laws, rules or regulations; and
50 (j) prior to obtaining an out-of-state direct shipper's license,
51 obtain a certificate of authority pursuant to section eleven hundred
52 thirty-four of the tax law and a registration as a distributor pursuant
53 to sections four hundred twenty-one and four hundred twenty-two of the
54 tax law.
55 4. Situs. Delivery of a shipment in this state by the holder of an
56 out-of-state direct shipper's license shall be deemed to constitute a
A. 1248 3
1 sale in this state at the place of delivery and shall be subject to all
2 sales taxes levied pursuant to articles twenty-eight and twenty-nine of
3 the tax law.
4 5. Renewal. The out-of-state shipper may annually renew its license
5 with the authority by paying a one hundred twenty-five dollar renewal
6 fee, providing the authority with a true copy of its current license in
7 such other state to sell wine for off-premises consumption and by
8 complying with such other procedures as are prescribed by rule of the
9 authority.
10 6. Rules and regulations. The authority and the department of taxation
11 and finance may promulgate rules and regulations to effectuate the
12 purposes of this section.
13 7. Enforcement. The authority may enforce the requirements of this
14 section including the requirements imposed on the common carrier, by
15 administrative proceedings to suspend or revoke an out-of-state ship-
16 per's license and the authority may accept payment of an administrative
17 fine in lieu of suspension, such payments to be determined by rules or
18 regulations promulgated by the authority.
19 8. Violations. In any action brought under this section, the common
20 carrier and the licensee shall only be held liable for their independent
21 acts.
22 § 3. This act shall take effect on the thirtieth day after it shall
23 have become a law. Effective immediately, the addition, amendment and/or
24 repeal of any rule or regulation necessary for the implementation of
25 this act on its effective date are authorized to be made and completed
26 on or before such effective date.
