The Facts About Wine Shipping In Illinois and HB 2462

Posted by Tom Wark on Mar 11, 2009

Illinoisans have the opportunity to have returned to them the right to purchase and have shipped to them wine from out-of-state wine stores, auction houses and non-winery wine clubs. HB 2462, introduced by Rep. Julie Hamos, would return to them that right that was stripped from them in 2007. As background to this bill, here is a run down of what HB 2462…

IT WILL RESTORE ILLINOIS CONSUMERS’ ACCESS TO ALL WINES
In 2007, via HB 429, Illinois created a license that allowed out-of-state WINERIES to wine direct to Illinois consumers. However, at the same time HB 429 stripped Illinois consumers of their right to have wine shipped to them from out-of-state WINE STORES. That restriction denied Illinois consumers access to thousands of wines either not shipped by wineries or not distributed in the state by Illinois wine stores. HB 2462 gives Illinois consumers access to all wines by creating a permit that out-of-state wine stores may obtain allowing them, again, to ship wine direct to Illinois consumers.

IT WILL PROVIDE SIGNIFICANT TAX REVENUE TO THE STATE
The Retail Wine Shippers Permit created by HB 2462 requires that Illinois State sales tax be paid by permit holders on all wine shipped into the state. At the current state sales tax rate, this provision could easily result in over $1 million annually for the state and possibly as much as $3,000,000 annually.

IT WILL CREATE THOROUGH PROTECTION AGAINST MINOR ACCESS
HB 2462 puts in place the same protections against minor access to wine that are imposed upon wineries that ship direct to consumers. Retailers are required to label each package with the wording: "CONTAINS ALCOHOL. SIGNATURE OF A PERSON 21 YEARS OF AGE OR OLDER REQUIRED FOR DELIVERY. PROOF OF AGE AND IDENTITY MUST BE SHOWN BEFORE DELIVERY.” In addition, shippers are must require the company delivering the wine to get a signature of a person 21 years or older.

IT WILL PUT OUT-OF-STATE RETAILERS UNDER ILLINOIS LEGAL JURISDICTION
Under HB 2462, holders of a Retail Wine Shipper Permit agree to submit themselves to Illinois legal jurisdiction. If they violate the provisions of their shipping permit they can be prosecuted in Illinois courts.

IT WILL BE SUPPORTED BY CONSUMERS
The Illinois Wine Consumer Coalition, the only wine consumer advocacy group in Illinois fully supports the provisions of HB 2462

IT WILL NOT DECREASE WINE SALES BY ILLINOIS WINE STORES
States that have allowed out-of-state retailers to ship wine directly to their residents have seen in-state wine sales increase and tax revenues increase after direct shipping was allowed.

IT WILL ABSOLUTELY NOT RESULT IN LARGE NUMBERS OF RETAILERS SHIPPING INTO ILLINOIS
In every state where both out-of-state wineries AND out-of-state retailers are allowed to ship wine to consumers, it is wineries that obtain 80% to 85% of all shipping permits issued. This is due to the fact that the vast majority of retail licensees in the United States do not engage in direct shipping. However, nearly all wineries make direct shipment of wine part of their business plan. Out-of-state retailers shipping into the state will not overwhelm the Illinois Liquor Control Commission.

IT WILL PUT ILLINOIS ON SOUND LEGAL FOOTING REGARDING DIRECT SHIPMENT OF WINE.
Federal courts in Texas and Michigan have ruled as unconstitutional regulations in those states that allow their in-state wine stores to ship to its residents but deny the same right to out-of-state wine stores. This is exactly the situation that exists in Illinois now. HB 2462 will remedy Illinois’ currently unconstitutional wine shipping regulations.