National Association of Wine Retailers Urges End To Unconstitutional Law Limiting Wine Shipments
The National Association of Wine Retailers today delivered a letter to Illinois Governor Bruce Rauner urging him to veto a bill that would turn Illinois wine drinkers and the retailer they procure wine from into felons. That would be the result of the governor signing SB 2989, currently awaiting his signature or veto.
Senate Bill 2989 (SponsorClayborne) would make it a felony for an Illinois wine drinker to ship wine to their home address from outside the state, as well as turn out-of-state wine stores into felons for the crime of shipping wine to Illinois consumers. Currently, Illinois prohibits shipments of wine from out-of-state if they are shipped by the Illinois resident or an out-of-state wine store or Internet retailer.
Illinois law currently allows Illinois-based wineries and wine stores and out-of-state wineries to ship wine to Illinoisans, but prohibits the same practice by out-of-state wine stores. The restriction was put in place in 2008 at the behest of Illinois wine and beer distributors in order to protect them from competition. This discrimination violates the U.S. Constitution’s Commerce Clause that requires equal treatment of in-state and out-of-state economic interests such as wine stores.
The letter from the NAWR to Governor Rauner reads:
Dear Governor Rauner:
We at the National Association of Wine Retailers urge you to veto SB 2989. The alternative is to sign this shortsighted bill and turn Illinois wine lovers into felons for the crime of arranging to ship a bottle of Pinot Noir to themselves. A far more reasonable policy would be to support a law that unambiguously allows Illinois consumers to have wine shipped to them from out-of-state wine stores and to collect sales taxes for the state in the process.
The problem with SB 2989 is that it doubles down on an already unconstitutional Illinois law that discriminates against interstate commerce for the purposes of protecting Illinois wine wholesalers from competing in a 21st century wine marketplace. While allowing Illinois wine stores to ship wine directly to the doors of Illinois wine consumers, the current law bars out-of-state wine stores from doing the same. Thats not right. Thats not fair. Thats not consumer friendly. Thats not constitutional. But thats what SB 2989 preserves.
Violations of this unconstitutional law are currently a misdemeanor. Sign SB 2989 and you would make felons out of an Illinois wine lovers who ship wine to themselves that they obtained out of state as well as out-of-state wine stores that ship wine to Illinois consumers who only wanted to obtain the wine they could not find locally.
If your concern is to heighten regulation surrounding the sale and shipment of wine from out-of-state wine stores, the simple solution is to license these out-of-state wine stores and Internet wine retailers, require they remit taxes to Illinois on sales to Illinois residents and place the stores under the legal jurisdiction of Illinois by licensing them. Only by doing this will Illinois have full tax and legal jurisdiction over retail wine shipments originating outside your state.
Your choice is clear, Governor. Support opening Illinois to wine shipments from out-of-state wine stores and reap millions in tax revenue while reducing enforcement costs. Or sign SB2989 and thereby turn Illinois consumers into felons, while doubling down on an unconstitutional law that discriminates against legitimate interstate commerce.
Tom Wark, Executive Director
National Association of Wine Retailers.
It is estimated that Illinois would reap upwards of $5 million in tax revenue by simply allowing out-of-state retailers to obtain the same permit that out-of-state wineries apply for and allow them to ship wine directly to Illinois residents. Currently, wineries that obtain such a permit remit taxes to Illinois and submit themselves to Illinois legal jurisdiction. However, currently, due to the ban on shipments from out-of-state wine stores, Illinois has no legal or taxing jurisdiction over out-of-state wine retailers that fulfill Illinois consumers’ requests to buy wines they are willing to seek outside the state due to their inability to find them in the state.
“The bill currently on Governor Rauner’s desk would not only continue to perpetuate an unconstitutional restriction on interstate commerce and cost the state millions in enforcement efforts and lost tax revenue, but also turn Illinois citizens into felons when their arrange to have wine purchased outside the state shipped to their home address,” said Tom Wark, Executive Director of the NAWR. “It’s a profoundly anti-consumer, protectionist and expensive way to shield local wine distributors from the kind of competition that every other business in Illinois is required to be exposed to.”