Washington Senate Bill Report SB 5013 (Jan. 17, 2023)
- Issuer
- Congressional materials
- Document type
- Report
- Date
- 2023-01-19
- Case
- 2023 01 19 A30404 D248113 Bill Report 5013 Sba Bfgt 23
Summary
A Senate Bill Report on SB 5013, an act providing a tax exemption for the first 20,000 gallons of wine sold by a winery in Washington, prepared by staff of the Senate Committee on Business, Financial Services, Gaming & Trade as of January 17, 2023, with committee activity listed for 1/19/23. The background section defines wine, cider and related terms and sets out current per liter excise tax rates, including $0.2292 for table wine, $0.4536 for fortified wine and $0.0814 for cider. The bill would exempt the first 20,000 gallons of wine sold by a winery in a calendar year from wine and cider excise taxes, except those distributed to WSU or the WWC. It requires JLARC to evaluate the tax preference by January 1, 2028 and January 1, 2033. The sponsors are listed as Senators Warnick, Keiser, Dhingra, Kuderer and Torres.
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SENATE BILL REPORT
SB 5013
As of January 17, 2023
Title: An act relating to providing a tax exemption for the first 20,000 gallons of wine sold by a
winery in Washington.
Brief Description: Providing a tax exemption for the first 20,000 gallons of wine sold by a
winery in Washington.
Sponsors: Senators Warnick, Keiser, Dhingra, Kuderer and Torres.
Brief History:
Committee Activity: Business, Financial Services, Gaming & Trade: 1/19/23.
Brief Summary of Bill
• Exempts the first 20,000 gallons of wine sold by a winery in a calendar
year from most wine and cider excise taxes.
• Requires the Joint Legislative Audit and Review Committee (JLARC) to
evaluate the tax preference by 2033.
• Provides legislative intent to extend the tax preference if the JLARC
evaluation meets certain conditions.
SENATE COMMITTEE ON BUSINESS, FINANCIAL SERVICES, GAMING & TRADE
Staff: Alia Kennedy (786-7405)
Background: Definitions. Cider means table wine that contains no less than 0.5 percent of
alcohol by volume (ABV) and not more than 8.5 percent of ABV and is made from normal
alcoholic fermentation of the juice of sound, ripe apples or pears, and includes flavored,
sparkling, or carbonated cider. Domestic winery means a place where wines are
manufactured or produced within the state. Tax preference means an exemption, exclusion,
deduction, credit, deferral, or preferential rate, for a tax administered by the Department of
This analysis was prepared by non-partisan legislative staff for the use of legislative
members in their deliberations. This analysis is not part of the legislation nor does it
constitute a statement of legislative intent.
Senate Bill Report -1- SB 5013
Revenue. Wine means any alcoholic beverage obtained by fermentation of fruits, such as
grapes, berries, or apples, or other agricultural product containing sugar, to which any
saccharine substances may have been added before, during, or after fermentation, and
containing not more than 24 percent of ABV, including sweet wines fortified with wine
spirits, such as port, sherry, muscatel, and angelica, not exceeding 24 percent of ABV and
not less than 0.5 percent of ABV. Table wine refers to wine containing no more than 14
percent of ABV when bottled or packaged by the manufacturer. Fortified wine refers to
wine containing more than 14 percent ABV when bottled or packaged by the manufacturer,
with certain exceptions. Winery means a business conducted by any person for the
manufacture of wine for sale, other than a domestic winery. Wine distributor means a
person who buys wine from a domestic winery, wine certificate of approval holder, wine
importer, or who acquires foreign produced wine from a source outside of the United States.
Wine and Cider Taxes. The Liquor and Cannabis Board (LCB) administers excise taxes
relating to wine and cider. The Department of Revenue administers retail sales and use
taxes on wine and cider when purchased in the original container and when consumed on
the premises of the seller. For table wine, the total tax rate per liter is $0.2292, which
includes the following per liter taxes:
Base tax $0.2025
Additional tax $0.0142
Additional tax $0.0025
Additional tax $0.01
For fortified wine, the total tax rate per liter is $0.4536, which includes the following per
liter taxes:
Base tax $0.2025
Additional tax $0.0142
Additional tax $0.0025
Additional tax $0.2344
For cider, the total tax rate per liter is $0.0814, which includes the following per liter taxes:
Base tax $0.0359
Additional tax $0.0025
Additional tax $0.0005
Additional tax $0.0018
Additional tax $0.0407
The base taxes are distributed to the Liquor Revolving Fund. LCB is authorized to
distribute $0.25 per liter to Washington State University (WSU) solely for wine and grape
Senate Bill Report -2- SB 5013
research. Additional taxes are deposited into the state general fund, except for the
additional per liter tax of $0.0025 and $0.0005 for cider, which are distributed to the
Washington Wine Commission (WWC) to finance its activities.
Tax Preferences. In 2013, the Legislature established new tax preference transparency
requirements. New tax preferences automatically expire in ten years unless an express
expiration date applies. All bills that enact, extend, or expand a tax preference must include
a performance statement unless an explicit exemption is included. The amount claimed by
a taxpayer for a new tax preference may be publicly disclosed 24 months after the
preference is claimed, with some exceptions.
Summary of Bill: Definitions. Wine and wine distributor have the same meanings
provided in the Alcoholic Beverage Control laws. Winery includes both in-state and out-of-
state wineries. Winery sales means taxable sales in Washington, including sales to wine
distributors, but does not include exports from the state.
Wine and Cider Taxes. The first 20,000 gallons of wine sold by a winery in a calendar year
are exempt from wine and cider excise taxes, except for such taxes collected and distributed
to WSU or the WWC.
Tax Preferences. The Joint Legislative Audit and Review Committee (JLARC) must
conduct an initial evaluation of the tax preference by January 1, 2028, and a final evaluation
by January 1, 2033. The Legislature intends to extend the tax preference if the evaluation
determines fewer wineries producing less than 20,000 gallons per year are going out of
business, the number of wineries that were producing less than 20,000 gallons per year in
2023 are subsequently producing more than that amount, or the amount of sales and use tax
collected by wineries has increased. JLARC may refer to any data collected by the state,
including the WWC, to perform the evaluation.
Appropriation: None.
Fiscal Note: Requested on January 3, 2023.
Creates Committee/Commission/Task Force that includes Legislative members: No.
Effective Date: Ninety days after adjournment of session in which bill is passed.
Senate Bill Report -3- SB 5013
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