Wine Consumers Get The Boot Again….Shocking!

You’ll never believe this, but it turns out that folks in Ohio actively seek out online wine retailers in order to buy wine. I know….Who would have thunk it? But it turns out Ohio’s Attorney General Dave Yost doesn’t like this. In fact, given the demands of the current pandemic, riots, rising crime rates, and more, Attorney General Yost thinks his valuable time is filing a federal suit against a handful of out-of-state retailers who have responded to Ohioans who want to buy wine from them.

As it turns out, Ohio law allows its residents to receive wine shipments from Ohio wineries, out-of-state wineries and Ohio retailers. It appears, however, that Ohioans receiving wine shipments from out-of-state retailers is, well, just beyond the pale.

In filing his lawsuit, the Attorney General was insensed that these out-of-state retailers were not paying Ohio sales taxes (it should be noted that there is no mechanism for out-of-state retailers to pay Ohio sales taxes since there is no permit from Ohio that out-of-state retailers may obtain that facilitates the remittance of sales taxes on wine shipments from out-of-state retailers.

One astute industry type in the above-cited article played “Captain Obvious” and made this comment concerning the lack of sales taxes coming Ohio’s way from out-of-state retailers:

“If he (the Ohio Attorney General) was really interested in making sure Ohio collected the tax revenue, there’s a simple solution. Pass a law that allows out-of-state retailers to ship to Ohio and pay the taxes.”

Indeed.

It turns out that over the past year or so literally thousands of packages have been sent to Ohioans from out-of-state retailers. Are you shocked? I’m shocked. You should be shocked too. It’s shocking!

But why would Ohioans seek wine from out-of-state retailers and pay the shipping charges when they have their very own retailers in Ohio? Again, from the article cited above comes this nugget:

“Kelly Becker, 36, of Grove City, described herself as a wine lover and said the rare brands she favors are not available at nearby stores. ‘I would have to travel a little bit to find the kinds of wine that I like,’ she said. ‘I’m a full-time working mom of two; it’s a challenge for me to get to the grocery store down the street, let alone to drive 30 minutes.’ ”

You have to wonder, given the real crimes that the Ohio Attorney General could be focused on, what prompted him to go after those violent and unrepentant out-of-state wine retailers? Well, we have a hint from a recent issue of the beverage industry newsletter Insights Express:

“Why this action now, after so many years when Act seemed dormant?  Unclear, but one knowledgeable industry atty suggests distribs may be pressuring states to act given the spike in ecommerce and resulting lost cases/revs/profits.  That atty expects more such actions to emerge.  If that’s true, it’s another sign of growing tensions among industry players as rules and regs change rapidly amid pandemic which benefit some, but may crimp others.”

Again…I’m shocked. Distributors pressuring Ohio to go after out-of-state retailers. Are you shocked? I’m shocked. It’s shocking.

It has been suggested that the Ohio Attorney General, in addition to taking his marching orders from the distributors (who happen to have given him $30,000 in campaign contributions over the past two years) is really just grandstanding. One wonders how much it is going to cost the people of Ohio to have the Attorney General attempt to stop Ohioans from buying wine from out-of-state. My guess is mid to high six figures.

Is it out of line to suggest that Ohio could save that expense, actually increase their tax revenue by millions of dollars and assure their citizens have access to all the wines they want simply by putting out-of-state retailers on par with Ohio wineries, out-of-state wineries and in-state retailers by simply passing a wine shipping law for the out-of-state retailers?

It should be clear by now that the primary job of alcohol wholesalers and distributors across the country, including Ohio, is to provide consumers with worst selection of wines they can get away with while simultaneously preventing those same consumers from access the array of wines found across the country that can’t be obtained locally. What’s equally clear is that the Attorney General has turned over his office and his resources to those same wholesalers in their pursuit of screwing consumers and Ohio taxpayers.


No Responses

  1. DAVID BARNES - July 13, 2020

    Some time ago, the procedure was if an out of state purchase was made and no tax was charged, the consumer was to pay a “use tax” which was the same percent as the Ohio sales tax. If the vendor charged a tax from their home state, the consumer had to pay the difference if less than Ohio. If the tax was greater than the Ohio rate, no tax was due. Reading the details of this legal action, I’m guessing the law has changed. Otherwise, why file this action?

  2. Jeremiah S. - July 13, 2020

    I’m chocked!

    Online wine giant shipped only 24K packages last year to consumers in OH.

    24K x $140-170 AOV x 5.75% state rate =$190-235K state revenue a year.

    It is an average salary of one judge.

    Just curious how much this lawsuit will cost to the state?

    Also, Ohio AG claims tens of thousands liquor stores across the state.

    Lets assume there ate 37K stores in Ohio. 37K shipments divide by 37K liquor stores = 1 (ONE!)

    One sale is missing per liquor store in Ohio in entire year. What if there are more than 37K liquor stores in Ohio?

    I’m chocked!

  3. Jeremiah S. - July 13, 2020

    What else chocked me is the reporting requirement on sales and shipments for personal consumption. Hands of! It is my very private personal matter what I drink and where I buy it.

  4. Robert P Behlendorf - July 14, 2020

    Another power-mad politician in the pocket of the three-tier conglomerates. I see little hope for change unless the Feds see the light and make some “recommendations” to the states. But don’t stop trying. Life is too short to drink schlock wine the three-tierers deliver. Over and out.


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