Consumer Wine Tastings in Jeopardy in California

PinotDaysIf the California Board of Equalization (BOE) gets what it wants, some of California’s best consumer wine tastings may find themselves in great jeopardy. One already is.

Pinot Days, the annual tasting of Pinot Noir produced by Lisa and Steve Rigisich’s Bay Area Wine project is all of a sudden, after 1o years conducting this non-profit tasting, being told that they are responsible for paying taxes on their Pinot Days entry tickets (which the BOE calls gate receipts). Lisa and Steve consulted the Board of Equalization back in 2005 and were advised statute 6073.2. for Trade shows applied, as Pinot Days clearly is not selling tangible property nor are the attending exhibitors, but instead are providing a place for wineries to showcase what they produce.

The Rigisiches are appealing this odd decision by the Board of Equalization. But if they lose this battle, the tax bill (tens of thousands of dollars) would devastate the viability of Pinot Days, one of the best wine trade shows in California.

Among the various questions that needs to be asked is which other public wine tastings (which are classified similarly to Pinot Days) will the BOE be coming for next? ZAP? Family Winemakers of California tasting? Pinot On the River? These are just the tip of the iceberg. Those that need in particular to be worried are the wine tastings that operate under 501(c)3 federal tax status.

Pinot Days is one of if not the largest gathering of Pinot Noir producers in the world. Lisa and Steve have expanded from originally gathering Pinot producers just in San Francisco to presenting Pinot Days in Southern California, Chicago and New York. What’s particularly beneficial about Pinot Days is that the event attracts primarily small, family owned Pinot estates, giving us something to taste that is generally very hard to find. The event primarily supports the small guys—which often need the most exposure to succeed.

Other wine event producers who want to better understand the problems and challenges that are besetting Lisa and Steve Rigisch and Pinot Days can contact them at [email protected]. Pinot producers who have benefited from exhibiting at Pinot Days and even consumers who have benefited and been enthralled by the massive display of the heartbreak grape at the Pinot Days events should also contact Lisa Rigisich to find out how they can help.


21 Responses

  1. Casey - December 19, 2014

    As Ronald Reagan famously stated, “If it moves, tax it. If it keeps moving, regulate it. If it stops moving, subsidize it.” All you have to prove is that this festival is a critical part of the California economy and that you can’t afford to continue putting it on thus causing severe economic impact. Then apply for your subsidy.

    Less regulation is what this industry needs to bring in more revenue to CA, not more. The less regulation = more companies, products, events = more excise tax, more CA tax on distribution, and more sales tax for the municipalities. If tax is increased on the events = fewer events = lower awareness = fewer participants = smaller market = less product = lower taxes at all levels. The BOE is spending dollars to collect pennies.

  2. tom merle - December 19, 2014

    I don’t understand why you are defending the Rigisch’s, Tom. The law clearly spells out that whatever funds that do not go directly to charities must be taxed. Lisa and Steve used to have some small African group as their beneficiary (no one knew how much money went to them), then One Brick a group of free floating volunters who are also a 501(c)3. But they got their funds not from the revenue of the event but a raffle of bottles donated by the producers.

    Family Winemakers ZAP are 501(c)6 organizations pay only limited if any taxes. Similarly with 501(c)3s. The BOE has it all spelled out.

  3. Tom Heller - December 19, 2014

    Sounds to me they need to get a good tax lawyer. It is a commercial event. I assume wineries pay to participate. I assume the promoters are taking a cut for their time. I expect t shirts are sold etched glasses a provided as part of the entry. The higher profile, success as it were brings the gov’t looking for money. This is why the the three tier system will NEVER die because the state and FED’s need an efficient way of collecting taxes

  4. Steve Lay - December 19, 2014

    By way of an example: Government mandates better gas mileage. Now cars get better mileage, less fuel taxes for government, now government wants to raise taxes on new things to make up the differences. Wine is a Calif. product and is a target for new taxes. Anyway, trade shows are a strange animal. For example, Las Vegas, Chicago, etc. produce very large trade shows for profit. If a “co-op” produces small food tasting events as a non-profit it seems like the government is overreaching.
    What about all the “trade” shows (tasting events) put on in Sonoma and Napa to promote wines-Dry Creek Passport in Sonoma is one that attracts hundreds for a 2 day event with huge fees? Will those now be taxed?
    California likes to give away services but will always look for money to keep the give-away going. Unfortunately the consumer pays in the end. What about a free lunch? Sorry, I digress.

  5. Blake Gray - December 19, 2014

    It’s silly to say paying taxes on the tickets would jeopardize the event. This event now costs $75. If they have to pay taxes, raise the price. Are you saying people who pay $75 won’t pay $80?

    We have to pay taxes on restaurant meals and I don’t see The French Laundry in jeopardy.

    • Margaret Pedersen - December 22, 2014

      I think the issue is not that taxing the event is a problem, but the BOE will want to go back and collect the previous three years’ of Use Tax on the event, which would be a large sum of money. Plus penalty and interest.

      • Steve Lay - December 22, 2014

        Progressives, liberals, socialist, always say taxes don’t matter. But just like real estate taxes over 2 or 3 years they add up. I quit going to a Sonoma wine events because prices went up by $25+ over 2 years. Finally, enough is enough. On a $600,000 home are you will to pay $2,000 more per year over 3 or 4 years.and say it doesn’t matter. I quit buying a wine over $3 per bottle increase in price. But, I admit, it’s just me. Everybody else, blow your hair back. How much are average Americans will to let government take before enough is enough?

        • Tom Heller - December 22, 2014

          Does the fire department show up when you call? Do the stop lights usually work?

          Are the roads mostly paved? Is the ER open 24 /day? Is there a police force? An Fda that is supposed to inspect food? Everyone is human lots of mistakes are made. But I don’t see anyone migrating to where? Russia, Cuba ? Mexico?

          • Steve Lay - December 22, 2014

            This logic would dictate that, the sky is the limit. For example, you would pay and extra $10,000 per year in taxes to you local city for fire dept. and and extra $5,000 for street lights, would you pay your local polticians $5,000 each to act on projects? What is your life worth in the hands of a local Obamacare doctor-$250,000? You tell me, you posed the example. Where does the insanity of taxation stop? A nation was formed on the tolerance of this very issue. Did you like the civic services package so much in 2013 that you bellied up the the county bar and paid anything more than you were required? NO? Is that the sound of a hypocrit? Why not? Don’t freely take my money for your pleasure if I am not willing to pay! Theft is not a nice thing.

          • Steve Lay - December 22, 2014

            I want everything for free. Aren’t fire and stoplights and private hospitals working with existing taxes. If I want free water and lights as an extra it isn’t going to be free. I want the rich to pay, and politicians to work for free, and lobbyist to pay all the bills. How does that suit you and your tax equations? Stop inventing new taxes for a little bit. If people like new taxes then pay them damnit.

  6. Bill Walters - December 19, 2014

    I don’t care what the BOE has “spelled out”, that doesn’t make it right. The Franchise Tax Board, and the BOE never met a dollar they didn’t like. I had experience with the BOE as a board member of a 501(c)(3) nonprofit insurance company, whose members benefited from the efficient operation of the organization, and received dividends as a return of that efficiency; and yet the BOE classified them as a taxable entity because they didn’t consider the nonprofit as a public benefit corporation, but benefiting only the members of the nonprofit insurance company. The member 501(c)(3)’s were more efficient financially, and able to pursue their mission with more available funds, which enhanced their mission. This is the price we pay for living in California. This is something to take up with the legislature.

  7. tom merle - December 20, 2014

    P.S. No way does Pinot Days comply with the statute mentioned. Saying a verbal OK was given stretches credulity.…/current/btlg/vol1/sutl/6073-2.html

    • Steve Lay - December 23, 2014

      Point well taken. One would be extremely naive, when working with any politician/government entity, not getting rulings or agreements it in writing.

  8. Wes Hagen - December 20, 2014

    It’s a miracle anyone is willing to make wine in the US with the onerous regulations, taxes and 50 different laws in each State.

    The wine business in CA should be seen as a treasure of flavor and hospitality/tourism, but it is exploited for every penny they can squeeze from us.

    Let’s not forget that the IRS and Income Tax was dreamed up by teetotaling asshole fundie Christians trying to get a Federal Prohibition passed in the early 20th Century. Prohibitionists gave us Income Tax to make up for the fact that 70% of Fed Tax pre-IRS was generated by alcohol sales!

    The BOE gets plenty of our money and a good chunk of our sales, so CA, please get the HELL out of our business. Let us promote our products and (heaven for fend) TWEET if we are going to be at the Wine House. I mean FFS!

    • Steve Lay - December 20, 2014

      We seem to have overlooked the city and county governments in California who go after their pound of flesh also. To limit traffic they impose restrictions on wineries having tasting room and events at their properties. OH WAIT, just yesterday 19 DEC the county of Napa found that their traffic woes were local residents going to work and out of county workers coming into the county for work. Visitors were a very small part of the traffic congestion in Napa. Surprise surprise, after taxing the heck out of the wineries they found visitors were not the problem. They had more traffic on Thursday than on Sat. or Sunday. Who was the genius that said politicians were smart and we need them to protect us from the scum that visited our wineries and bought their wines? Would any business owner hire a politician to do anything requiring intellect?
      What would a Napa or Sonoma politician do if wineries closed in either county?

    • Maitre Zed - December 22, 2014

      Us History 101: Prior to the income tax most federal spending was covered by tariffs.

  9. Larry Schaffer - December 22, 2014

    I’m wondering if this applies to many if any regional wine associations. Your thoughts?


  10. Steve Lay - December 22, 2014

    Taxation in the extreme could be confiscation of property. If the majority wants high taxes then that is the will of the people. Government will always tax and find needs that need to be met. That is why there are lobbyist and politicians.

  11. Joe Haslett - December 23, 2014

    The challenge with any regulatory advise/ruling is to get it in writing with a distinct, clearly stated opinion, if there is a precedent and also a stated ‘ruling’ then the agency can change the rule going forward but not in arrears. The question in this situation is if the operators have changed any of their structure that adjusts why the BOE would change their ruling. The advice that a good tax consultant look into this is wise. but, bottom line…get it in writing, up front that clearly states what qualifies and what does not. Everyone else is correct the Gov’t wants the money and will figure out how, but at the same time you have to follow the rules or get the rules changed, see your local politician for support 😉

    • Steve Lay - December 23, 2014

      Good points. However, to change rules or get help will cost them-you can hire a lawyer or contribute heavily to a number of politician or get a lobbyist. When you deal with politicians you will pay dearly however you decide to go-either way they win. Politicians, lobbyist and lawyers do not do anything for just love.

  12. Eric Miller - January 5, 2015

    It sill amazes me that so many of the people who run or administer state and federal agencies don’t grasp the idea of economics. This event is clearly a way for local producers to present wine to the public so they (separately from the actual event), can actually SELL wine to those who attend, or people and businesses associated with those who attend, which the state will get their tax revenue for. It no doubt also brings hundreds of thousands of dollars to the locales in which it is presented, for hotels, restaurants, tourism… from which the state will derive revenue. This is an event that makes money flow, but does not in itself generate money. By making it impossible to put on an ‘economic support’ event, the state will actually receive FEWER revenues because of the business it stifles. Seems like there could be some legit ‘classification’ for this as a stepstone business supporter and promoter.

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