Over the Border Wine

Can you get wine shipped to you over state lines? Depends on who you ask.

by David Snyder

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Published: Apr 2, 2008

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For wine lovers, visiting the Web site of Springfield, N.J.'s Wine Library (winelibrary.com) is like being, as Homer Simpson says, "a kid in some kind of store." It sells more than 5,000 varieties of wine. But director of operations Gary Vaynerchuk won't ship to you if you live in Pennsylvania. "We can't due to dumb laws in PA," he says.

Vaynerchuk is referring to Pennsylvania's refusal to allow wine from out of state to be sent directly to its residents' doors. Currently, there are 36 states that allow out-of-state wineries to deliver directly to residents, but Pennsylvania has long prohibited out-of-state wineries from doing so. (In-state wineries are allowed to ship.) In 2005, however, the U.S. Supreme Court, in Granholm v. Heald, ruled that a state cannot treat in-state and out-of-state wineries differently. Relying on Granholm, a Philadelphia federal court in Cutner v. Newman later declared Pennsylvania's direct shipping laws unconstitutional.  

But three years have passed and the Pennsylvania legislature has yet to respond to these rulings. It appears to be wrestling with two issues — how to ensure the collection of taxes, and how to prevent minors from obtaining wine via the Internet. Two currently pending bills address these issues differently.

The bill proposed by Senator Jim Ferlo (D-Allegheny County) would allow wineries to ship directly to customers' doors, provides for the collection of taxes and safeguards against underage drinking by requiring the signature of an adult. "I want wine to go to peoples' homes without having to go through the state store system," Ferlo says. His bill, however, has gone untouched for over a year.

A bill proposed more recently by Rep. Paul Costa (D-Allegheny County) is much different. "My goal is to make sure the LCB is in the loop," he explains. According to Costa's bill, wineries would be required to ship to a state store, where a state employee would deliver the wine to customers — for a fee. "My intention was to make sure we collect the taxes and [have] control over where wine is going," Costa said.

But according to Tom Wark, executive director of the Specialty Wine Retailers Association, concerns about taxes and underage drinking can be addressed without having to route the wine through an entity like the PLCB. "It's very easy to collect taxes," says Wark. "Last year, New Hampshire [which allows out-of-state shipping] collected over $400,000 by simply collecting taxes on a monthly basis. They simply send out invoices. It's done all across the country and it's done very successfully." (The New Hampshire Liquor Control Board did not respond to our request for an interview.)

And the under-21 issue may be something of a red herring — according to a Federal Trade Commission report, states that allow direct shipments have reported no increased problems with underage drinking.

The two bills differ in one other important aspect — Costa's bill allows only wineries to ship wine into Pennsylvania, whereas Ferlo's bill would also allow retailers, like Wine Library, to do so. Costa hopes hearings on the issue will take place before this summer.

While we wait for the legislature to sort things out, however, there's a gray area as to whether Pennsylvania residents can actually, legitimately receive direct wine shipments. Like many things, it's a matter of legal interpretation.

Some argue that because laws prohibiting direct shipping were declared unconstitutional, there is nothing really preventing a winery or retailer from shipping directly to a Pennsylvania resident. "We've had a de facto open market for the past couple of years because of the inaction of the legislature,"says Ferlo. "Since the legislature's been remiss and slow in not resolving this issue legislatively, those who sincerely want to continue to have unfettered e-purchasing of wine should e-purchase away."

Others feel that the prohibitive laws are still enforcable as long as they are applied equally to in-state and out-of-state wineries, in accordance with the Supreme Court decision. For example, according to PLCB spokesman Nick Hays, the Board is allowing out-of-state wineries to ship to Pennsylvania if they apply for a "limited winery" license — a document stating that the winery produces no more than 200,000 gallons of wine a year. The PLCB is currently processing three such applications from wineries outside the state.

However, this interim policy does not allow retail businesses like Wine Library, to ship here. Still, research for this piece turned up some East Coast retailers willing to quietly ship wine to Pennsylvania residents — like the e-version of a speakeasy. Of course, due to the sensitivity of the issue, none were willing to go on record.

Despite the confusion, the Pennsylvania State Police's Bureau of Liquor Control Enforcement (BLCE), which enforces state liquor laws, continues to uphold direct shipping laws. According to BCLE operations director captain Patrick Gebhart, however, individual, small-time violations are tough to investigate. "Unless someone is aware of an issue and they can alert us to that, it's nearly impossible to detect and enforce," he says.

Of course, even driving across the border to purchase wine is still illegal. But that doesn't necessarily mean you'll get caught. "We're not targeting individuals that maybe are grabbing a bottle of wine on the way home from work," Gebhart says. "We're more looking for licensees who may be going over there to avoid paying state tax on large amounts of alcohol and then supplying their bar back in the Commonwealth."

(d_snyder@citypaper.net)

 

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