With the passage of House Bill 4557 (placing a $500 penalty to out-of-state wine retailers who ship wine to Michigan residents), the Michigan legislature has done the bidding of its special interest booze wholesalers who have demanded State protection from having to compete in a free marketplace. At the same time, this policy choice will cost Michigan more than $4 million in lost tax revenue that could be used to fund education, veterans, and environmental initiatives.
By choosing last year to ban wine shipments from out-of-state retailers instead of licensing them and collecting taxes, the state of Michigan rejected $4 million in tax revenue that could have been added to the 2018 budget to pay for numerous important state priorities including school funding, help for Michigan veterans and environmental initiatives.
Bans On Wine Shipping And Fines Drafted and Sold By Booze Wholesalers
House Bill 4557, now awaiting Governor Rick Snyder’s signature, would place a $500 fine on out-of-state wine retailers who ship wine to Michigan residents. Drafted and supported by the Michigan Beer and Wine Wholesalers Association, HB 4557 supports the recently passed Michigan law that bans Michigan consumers from receiving wine shipments from out-of-state wine stores.
Support for both measures was predicated on a booze wholesaler’s privately funded report that suggests Michigan annually loses over $4 million dollars in excise and sales taxes when out-of-state retailers ship wine to Michigan residents and don’t pay taxes. The report assumes Michigan consumers could obtain the wines in Michigan that they order from out-of-state and that the state has tax jurisdiction over sales that take place out-of-state by retailers who are not licensed by Michigan to ship to Michigan residents. Neither is true.
“What you have here is a depressing tale of legislators doing the bidding of the state’s booze wholesalers who regularly lobby the state for legal protection from having to compete in a free market for wine,” said Tom Wark, executive director of the National Association of Wine Retailers. “It’s clear that the more than $3 million in campaign contributions that Michigan beer and wine wholesalers have doled out to Michigan lawmakers has had its intended result, but the really outrageous impact of lawmakers giving in to wholesaler demands is that the residents of Michigan will lose out on more than $4 million in tax revenue that could help Michigan’s students, veterans, and environment.”
The alternative to Michigan’s ban on shipments to consumers from out of state retailers that has been adopted in a number of other states is to license these out of state retailers to ship into the state and thereby gain access to the millions in tax revenue those sales would generate.
Bans on Wine Shipping Deprives Michigan Meals on Wheels of $4 million in Funding
Instead, by supporting the booze wholesalers demand to be protected from competing with out of state sources for wine, the state of Michigan will forgo that $4 million in annual sales and excise tax revenue. If tacked on to the recently approved Michigan 2018/19 budget, that money could increase the following 2018 budget priorities by significant amounts:
Freshwater protection fund +50%
Great Lakes Restoration Initiative +26%
Rural development fund +200%
Child development and care external support +14%
Career and technical education +76%
Michigan Liquor Control Commission +20%
Homeless Programs Support +21%
Adoption Support Services +15%
Food Bank Council of Michigan +200%
Community substance use prevention +5%
Local Public Health Services Program +10%
Michigan Meals On Wheels +9%
Michigan Home Health Services +65%
Michigan Maternal and child health +20%
Indigent civil legal assistance +50%
Jacobetti home for veterans +18%
“The variety of services and programs that Michiganders are deprived of due to lawmakers assenting to booze wholesalers’ demands is simply shocking,” said Wark. “Is providing Michigan booze wholesalers protection from a free market really more important than providing $4 million in funding for Michigan veterans?”
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Tom Wark, Executive Director
National Association of Wine Retailers
707-266-1449 • [email protected]