Category: WWI News

Thank you for your patience as we worked closely with the Washington State Wine Commission, Washington Winegrowers, and the WSLCB to confirm what Governor Jay Inslee’s “Stay Home, Stay Healthy” order means for wineries. As a reminder, this order:

1. Requires every Washingtonian to stay home unless they need to pursue an essential activity.
2. Bans all gatherings for social, spiritual and recreational purposes.
3. Closes all businesses except essential businesses within 48 hours after the order is signed.

We are happy to report that we, in coordination with legal counsel Emily Gant at Foster Garvey, confirmed with the WSLCB this morning that we may continue all currently allowed winery activities, as the wine industry falls under the “essential workforce” category of agriculture.There is one additional permission now needed for curbside sales, please see below under “winery allowances.”

RESTRICTIONS

1. All wineries and tasting rooms must be closed for in-person tastings and events.

ALLOWANCES

The following is permitted:

1. Wine bottle/case sales to-go. You are permitted to allow customers into your tasting room or winery to purchase wine bottles to-go, or pickup online/phone purchases.
2. (Adjacent to Winery/Tasting Room Premise) Curbside sales and deliveries. To do sales of wine on the curbside or similar location adjacent to the winery and technically off your licensed premise, you can request curbside delivery by submitting the Added Activities form. You will need to handwrite the request for curbside delivery privileges on the form. Send the form to nonretailliquorlicensing@lcb.wa.gov. 
3. All deliveries, including direct from winery to customer. If you currently have delivery privileges, you may continue to deliver product now. If not, you can request delivery privileges by submitting the Added Activities form. Please send the form to nonretailliquorlicensing@lcb.wa.gov.  
4. Winery production activities.
5. Vineyard activities.
6. Wholesale activities. Returns of alcohol from a business to a distributor.

Please remember that all current activity must meet proper social distancing recommendations. While to-go orders are still permitted, here are a few suggestions for social distancing:

1. Encourage customers to call in their orders before they arrive.
2. Make any transactions swiftly.
3. When customers arrive to pick-up, have them wait in line 6 feet apart.
4. Encourage customers to wait in their vehicles and you can call them in or deliver wine to their car when it’s ready.
5. Check IDs from a distance. When making deliveries, the signature requirement has been temporarily waived – just ask customers to hold up their ID and check it from a safe distance.
6. Adopt a “no cash” policy.
7. Remove chairs from seating areas.

Emily Harris Gant is a partner at Foster Garvey, a Washington Wine Institute Associate Member, and provided help to our association as we translated what the most recent order means to our industry. We are grateful! Emily’s practice focuses on the alcoholic beverage and cannabis industries.  You can reach Emily at emily.gant@foster.com or 206.816.1454.

Please contact us if you need to talk, have questions or want to brainstorm. We’re in this together.

As the news surrounding COVID-19 changes daily, even hourly, we know you are doing everything you can to keep up, be safe, and protect your businesses. We are doing the same at the Washington State Wine Commission. In lieu of our normal monthly newsletter, we are dedicating this email to how the COVID-19 restrictions affect you, along with some resources to communicate and engage with our community and your customers. We are in this together.

WINERY RESTRICTIONS:
Gov. Jay Inslee announced an emergency proclamation this week that mandates the temporary closing of restaurants, bars, entertainment and recreational facilities. We sent out a series of emails regarding how the WSLCB is responding, and you can refer to the latest email to get up-to-date information about current WSLCB restrictions & allowances.

The bottom line is that through March 31, and possibly longer:   All wineries and tasting rooms must be closed for in-person  tastings and events.

WINERY ALLOWANCES:
The following is permitted:

1. Wine bottle/case sales to-go.
2. Curbside sales and deliveries.
3. All deliveries, including direct from winery to customer. Please follow these guidelines.
4. Production activities.
5. Wholesale activities.
6. Returns of alcohol from a business to a distributor. More information here.

NEW INFORMATION

1. FedEx has informed us that they are not requiring physical signatures for alcohol deliveries, but are still requiring the customer to show a valid ID. The FedEx driver will not touch the customer’s ID but they must show it to the driver.
2. There has been some confusion as to whether or not you can allow customers to consume wine outside of your tasting room but still on your licensed winery premise. As of our understanding today the answer is, unfortunately, no. Under Gov. Inslee’s restrictions there is to be no consumption on your property (whether inside or outside).

We understand that these temporary restrictions will be challenging, but we have seen some really creative engagement from you already (shipping specials, complimentary hand-delivery, even supporting our friends in the restaurant industry by offering a discount on wine if a customer shows a take-out receipt). Our industry is strong, and will persevere through this.

The Washington Wine Institute (WWI) has collected information regarding Gov. Inslee’s plan for economic relief for businesses and workers impacted by the COVID 19 outbreak. You can view the latest here.

General Resources
Washington: Department of Health
National: CDC
Regional Travel & Tourism: Visit Seattle
Resources for Employers & Workers: Governor’s list of resources; Association of Washington Business

Governor Inslee yesterday announced details regarding economic relief for businesses and workers impacted by the COVID 19 outbreak. Below are details regarding both. We will continue to provide updates to these efforts at both the state and federal level as they become available.

In addition, the Association of Washington Business (AWB) has created a helpful resource page for businesses and their employees. You can access that page here.

Finally, AWB is hosting a COVID 19 Business Impact Webinar on Monday, March 23rd 10-11:30 AM. The speakers on the webinar confirmed come from the following agencies and related fields: WA State Department of Labor & Industries; WA Small Business Development Center, WSU; University of Washington School of Public Health; WA Emergency Management Division; U.S. Small Business Administration; WA State Department of Commerce; WA State Department of Health.

One-Week Waiting Period Waiver for Unemployment Insurance & Unemployment Insurance Eligibility Expansion:

Inslee announced a waiver of one week waiting period to receive unemployment insurance. The order is retroactive for claims filed up to March 8th. The Governor said he is working with the White House and our congressional delegation to become eligible for Disaster Unemployment Assistance. That would allow WA State to expand unemployment insurance to those who are otherwise not eligible for unemployment insurance, like workers with less than 680 hours and independent contractors.

WA State Small Business Assistance:

Governor Inslee will allocate up to $5 million of the Governor’s Strategic Funds reserve to be made available as small business grants to prevent closure due to COVID-19. Once available, applications will be coordinate under the state Dept of Commerce.

Small Business Administration Disaster Loans:

The federal Small Business Administration approved Governor Inslee’s request for disaster declaration, which unlocks low interest loans for WA small businesses to help meet financial obligations and cover operating expenses. Congress approved up to $7 billion in SBA disaster loans for businesses impacted by COVID-19. We encourage you to apply if needed and learn more here.

Flexibility for Tax Collections:

The WA State Dept of Revenue will have authority to waive, suspend penalties and interest on certain late payments. The state will create payment plans on the amount businesses owe without filing tax liens in federal courts. This includes waiving late filing fees for property tax exemption renewals; business license renewal late fees; and excise tax interest on B&O, real estate sales, and other taxes the department administers.

Utility Rate Payer Assistance:

The Governor called on all public Utilities in WA State to suspend disconnection tariffs for nonpayment during this emergency; waiving late fees for customers who are our of work or offering customers payment plans; and expanding bill assistance programs.

Cash Assistance to Families:

Governor Inslee has directed the state Dept of Social and Health Service to expand eligibility for the Family Emergency Assistance Program to include families without children.

Workforce Retention and Economic Development:

The Employment Security Department and Department of Commerce will lead efforts to support economic retention, resilience and recovery efforts. This team will work with the business community to move forward toward economic recovery. As resources and tools become available, check here.

Mental Health Support:

The behavioral health community is ready to help those who may be struggling with stress and mental health during this on-going crisis. If you or a family member needs emotional of mental health support, consider calling the Washington Poverty Help Center Line at 1-866-789-1511.

We know this is a confusing time, and you continue to get new information regarding Gov. Inslee’s restrictions on tasting rooms every day. We are dedicated to distilling this information for you in a clear, concise and timely way.

As of today, Wednesday, March 18, here is what you need to know:

WINERY RESTRICTIONS

• All wineries and tasting rooms must be closed for in-person tastings and events.

WINERY ALLOWANCES
The following is permitted:

1. Wine bottle/case sales to-go.
2. Curbside sales and deliveries. Licensed wineries may immediately sell products to customers outside of their business, but within the licensed property line. This is a temporary allowance.
3. All deliveries, including direct from winery to customer.
4. Production activities.
5. Wholesale activities.
6. Returns of Alcohol.
   1. Due to the emergent circumstances, the WSLCB is providing approval for distributors to pick up product from businesses impacted by COVID-19, which includes the allowance for distributors to provide a refund for the returned product. This is a temporary approval until April 1, 2020.
   2. Retail licensees impacted by closures may contact their distributor(s) to request the return of product.
   3. Distributors should email Lieutenant Robert Knowles with the retail liquor license number(s) and product to be returned.

Governor Inslee issued an emergency declaration announcing the temporary closing of restaurants, bars, entertainment and recreational facilities. This announcement coincided with a similar statement from King County Executive Dow Constantine.

You can read the Governor’s official statement here.

The Seattle Times article here provides more detail including the closure notice will extend until March 31st.

There are allowances for wineries to provide take-out and delivery sales. We are in direct communication with the Governor’s office, the Department of Commerce and the Liquor and Cannabis Board so that we can provide that assurance and clarity for all wineries.

We will continue to communicate information from the Governor’s office, our state regulators, community resources, and information about help for small businesses and employees.

As we continue sending emails updating you as the situation evolves, we strongly encourage our wine associations, schools, and others to send these notices broadly to reach the largest amount of the WA wine industry as possible.

Resources for Businesses and Employees:

Financial Resources for WA Residents Impacted by COVID-19

COVID-19 Resource List for WA Businesses and Workers

Employment Security Department Emergency Employment Resources

Unemployment Benefits

Department of Commerce COVID-19 Info & Updates

Small Business Administration Disaster Relief Loans

Association of Washington Businesses COVID-19 Employer Resources

Additional Unemployment Security Department Resources:

https://secure.esd.wa.gov/home/

https://esd.wa.gov/SharedWork

https://esd.wa.gov/SharedWork/eligibility

Today is the 40th day of the 2020 legislative session, with two-thirds of this year’s legislative journey over and the final 20 days looming ahead. The Senate and House passed many bills out of their respective chambers, with focuses on health care, mental health, the environment, affordable housing, and to a lesser extent small business regulatory changes and reform. For the Washington wine industry, we had a very strong floor session with four of our priority bills surviving the process and continuing on into the next phase of the legislative process! Here is an updated list of the Washington wine bills that survived the floor session cutoff process and are still alive. These include:

WWI authored legislation:
SB 6392: Creating a local wine industry association license

Other:
HB 2050: Creating the Washington wine specialty license plate
SB 6095: Allowing common carrier activities not prohibited under the three-tier system (supports the Alaska Airlines Wine-Flies-Free Program among other promotional opportunities with airlines, cruise ships, and trains that cross state lines)
SB 5006: Allowing, in a limited amount, Washington wine to be sold at a craft brewery and Washington beer to be sold at a winery and satellite tasting rooms

The Legislature now shifts to spending the final days voting on survivng bills out of the House and Senate committees for the next week, then finishing the 2020 session with final votes on bills out of the full House or Senate. As always we will keep you our members informed as our work within the 2020 legislative session continues towards a March 12 finish.

Congress Extends the Craft Beverage Modernization and Tax Reform Act Through 2020

The Craft Beverage Modernization and Tax Reform Act (CMBTRA) has been extended through December 31, 2020.

The bill was passed as part of a package of tax extenders that was included as an amendment to the Further Consolidated Appropriations Act of 2020. WineAmerica applauds the House and Senate for coming together to extend these credits through the end of 2020, avoiding costly increases for the entire American wine industry.

Earlier this week, the House of Representatives passed the bill that carried the extension by a bipartisan vote of 297 to 120. The bill was then sent to the Senate for approval. The Senate passed the bill by a vote of 71 to 23, sending it to the President’s desk for his signature, which is expected.

“This is a major victory for the American wine industry, and a huge relief for wineries of all sizes across the country,” said Marty Clubb, owner/winemaker of L’Ecole No. 41 in Walla Walla, Washington who is the current Chair of the WineAmerica Board of Directors. “While there is more work to be done, this extension is a major step forward.”

WineAmerica has been working throughout the year with our colleagues in the beer, cider, mead and spirits sectors on the Craft Beverage Modernization and Tax Reform Act. Our ultimate goal has been to secure permanence on this essential tax savings that have allowed for substantial savings and spurred reinvestment from wineries of all sizes. The larger CBMTRA currently has 74 Senate sponsors and 332 in the House. We will continue to work with our coalition partners to secure either permanence or a long term extension.

“WineAmerica just demonstrated its incredible value to the American wine industry,” said Jim Trezise, the organization’s President. “The powerful combination of daily work by our staff and lobbyists, national grassroots advocacy, and collaboration with other beverage associations was the perfect recipe for success.”

The new extension of the Craft Beverage Modernization and Tax Reform Act also includes a very important fix particular to the wine industry. Bonded wine cellars and fulfillment houses will once again be eligible to take the credits on the wine in their facilities, and bond-to bond transfers between wineries will also be eligible for the credits. The correction is a retroactive fix, and will be retroactive to January 1, 2018.

The Washington State Liquor and Cannabis Board recently announced that there are now 1,000 active domestic winery licensees in Washington State. Our state wine industry is growing at several times the rate of Oregon and California, and this announcement validates the growth numbers we’ve been seeing over the past decade. Congratulations to all past and present who’ve been a part of the success story of Washington State wine. As your statewide trade association for our wine industry, we promise to continue our over three decades of work at WWI to protect our industry from harm in Olympia and Washington D.C. while also continuing to responsibly modernize our alcohol laws so all of Washington wine is able to continue reaching new milestones. Cheers!

The Winery General Permit is now effective. Ecology issued the Winery General Permit on May 17th of last year, but delayed the effective date to give potential permittees extra time to prepare for the new regulation. The effective date was also delayed to coincide with the recent adoption of the revised Permit Fee Rule (Chapter 173-224 WAC).

Wineries that meet the applicability requirements outlined in Special Condition S1 of the Winery General Permit have 90 days (until September 30th) to apply for permit coverage using the online permit portal. Wineries under 7,500 cases/produced a year are exempt from permit. Also, wineries in urban areas that have their wastewater system connected to a delegated point-of-treatment system are exempt from permit.

The Washington Wine Institute worked with Ecology and wine industry wastewater experts for more then four years on developing the permit. While still complicated, the final version of the permit is a tremendous improvement from where it started in 2015. Finally, the permit fees are significantly lower then what Ecology originally proposed. We will continue pushing Ecology to lower these costs as they learn how much resource is needed to permit and regulate these new winery wastewater rules.

If you have any questions, please contact the Ecology staff listed on the permit webpage.

With Governor Inslee signing the 2019-2021 Washington State Operating Budget into law, several changes to our current tax law took place. One of specific importance to Washington wineries is the significant change to the nonresident sales tax exemption when a customer from a qualifying state makes a purchase at our winery or tasting room. Below is information on what the changes mean for all tax payers and collectors. Important note: this tax collection change does NOT apply to sales of wine delivered to customers outside the state.

Courtesy of the Washington State Department of Revenue

Background
As you may know, during the 2019 session, the Legislature modified the nonresident exemption. Effective July 1, 2019, the retail sales tax exemption is no longer available at the point of sale. Instead, eligible nonresidents who have paid at least $25 in state sales tax on qualifying purchases may apply for a refund of the state portion of the retail sales tax from the Department on an annual basis.

Sales of wine
Beginning July 1, 2019, wineries in Washington must collect sales tax on their sales of wine and other tangible goods sold to nonresidents when the nonresident customer takes delivery of those goods in this state (i.e. customer takes possession of the goods in Washington at the time of sale.) The exemption will no longer apply at the point of sale, no matter where the customer resides/lives.

Interstate and foreign sales
If a Washington winery delivers wine or other items to a customer at a location outside the state, those sales continue to be exempt from Washington’s retail sales tax and retailing B&O tax as “interstate and foreign sales.” There is no change to the way these sales are taxed or reported. Wineries do not need to start collecting Washington taxes on products shipped for delivery outside the state.

For more information, see our Special Notice on our website.