South Dakotans may soon be able to buy wine from small wineries outside the state and have the product shipped to their home. Lawmakers have passed a bill which allows direct shipment of wine into the state.
Let’s say you’re a bit of a wine connoisseur living in South Dakota and your favorite wine is produced in Napa Valley by a small winery. Unless your local retailer sells the wine, which is probably unlikely, the only way to get your hands on a bottle is to drive all the way to California and pick it up yourself. House Bill 1001 remedies this predicament by allowing out-of-state wineries to ship their product directly to South Dakota consumers. Through the measure wineries have to register with the state. They also have to pay state and local sales tax, a wholesaler tax and an occupational beverage tax.
Shawn Lyons is with the South Dakota Retailers Association. He says South Dakota citizens are already buying out of state wine through friends who live in bordering states that allow direct shipment. Lyons say House Bill 1001 allows the state to generate revenue while giving consumers more choice.
"We know this practice has been happening in South Dakota for some time for consumers. And if this bill weren’t to pass that practice probably would continue but at least this mechanism allows the ability to properly tax and regulate a product that’s coming into the state today that you have not had the ability to do before," says Lyons.
The measure also sets up an online tracking system through the Department of Revenue to oversee wine sales. Through the online system both out-of-state and local wineries are able to register and pay their taxes online. Proponents say the cost to set up this online system is around $100,000.
House bill 1001 passed the House Taxation committee with no opposition and now moves to the House floor for further debate.