Senate Bill 5013 — Tax Exemption for Wine Sold by a Winery (State of Washington, 2023 Regular Session)

Summary

Senate Bill 5013 of the 68th Legislature, 2023 Regular Session, State of Washington, by Senators Warnick, Keiser, Dhingra, Kuderer, and Torres, referred to the Committee on Business, Financial Services, Gaming & Trade. The act relates to a tax exemption for the first 20,000 gallons of wine sold by a winery in Washington. Section 1 provides that a winery's sale of the first 20,000 gallons of wine in a calendar year is not subject to tax under chapter 66.24 RCW, with stated exceptions. Section 2 is a tax preference performance statement that calls for evaluations by January 1, 2028 and January 1, 2033.

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Full text

     S-0198.1

                               SENATE BILL 5013


     State of Washington       68th Legislature       2023 Regular Session

     By Senators Warnick, Keiser, Dhingra, Kuderer, and Torres

     Prefiled 12/06/22. Read first time 01/09/23. Referred to Committee
     on Business, Financial Services, Gaming & Trade.




1        AN ACT Relating to providing a tax exemption for the first 20,000
2    gallons of wine sold by a winery in Washington; adding a new section
3    to chapter 66.24 RCW; and creating a new section.


 4   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:


 5       NEW SECTION.   Sec. 1.   A new section is added to chapter 66.24
 6   RCW to read as follows:
 7       (1) Except as otherwise provided in this chapter, a winery's sale
 8   of the first 20,000 gallons of wine in a calendar year is not subject
 9   to tax pursuant to this chapter, except any amount of such tax that
10   may be designated for disbursement to the Washington wine commission
11   for use in carrying out the purposes of chapter 15.88 RCW or to the
12   Washington State University under RCW 66.08.180(4).
13       (2) For the purposes of this section:
14       (a) "Wine" has the same meaning as in RCW 66.04.010.
15       (b) "Wine distributor" has the same meaning as in RCW 66.04.010.
16       (c) "Winery" has the same meaning as "winery" and "domestic
17   winery" in RCW 66.04.010.
18       (d) "Winery sales" means taxable sales in Washington, including
19   sales to wine distributors. "Winery sales" does not include exports
20   from the state.


                                     p. 1                           SB 5013
 1       NEW SECTION.   Sec. 2.   (1) This section is the tax preference
 2   performance statement for the tax preference contained in section 1,
 3   chapter . . ., Laws of 2023 (section 1 of this act). This performance
 4   statement is only intended to be used for subsequent evaluation of
 5   the tax preference. It is not intended to create a private right of
 6   action by any party or to be used to determine eligibility for
 7   preferential tax treatment.
 8       (2) The legislature categorizes this tax preference as one
 9   intended to provide tax relief to certain businesses or individuals.
10       (3) It is the legislature's specific public policy objective to
11   promote the development of small wineries. These small businesses
12   face challenges entering the industry and it is the legislature's
13   public policy objective to assist these wineries to grow and
14   stabilize. Small wineries have faced significant challenges in recent
15   years including the great recession, COVID-19 restrictions, impact of
16   wildfire smoke, and weather challenges. Every year dozens of small
17   wineries close their doors forever. The loss of these businesses
18   means Washington loses not just the wine excise tax income from these
19   wineries, but also the sales and use tax income, the business and
20   occupation tax income, and the jobs, tourism opportunities, and
21   community contributions these wineries would otherwise make.
22       (4) The joint legislative audit and review committee must conduct
23   an initial evaluation of the tax preference in this section by
24   January 1, 2028. A final evaluation of the tax preference in this
25   section must be conducted by January 1, 2033.
26       (5) If the review finds that the: (a) Number of wineries
27   producing less than 20,000 gallons per year going out of business is
28   decreased; (b) number of wineries that were producing less than
29   20,000 gallons per year in 2023 that are subsequently producing more
30   than 20,000 gallons per year is increased; and/or (c) amount of sales
31   and use tax collected by wineries has increased, then the legislature
32   intends to extend the expiration date of this tax preference.
33       (6) In order to obtain the data necessary to perform the review
34   in subsection (5) of this section, the joint legislative audit and
35   review committee may refer to any data collected by the state,
36   including the Washington wine commission.
37

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