PA Still Blocks Shipment of Wine to Residents’ Homes

By Stacy Brown | PA Independent

Pennsylvania residents soon could have wine shipped directly to their doors from out-of-state wineries.

The Keystone State has not permitted this type of shipping, despite a 2005 U.S. Supreme Court ruling that declared that refusal unconstitutional.

Legislation has been delayed as the Pennsylvania Legislature and Pennsylvania Liquor Control Board, or PLCB, have wrestled with how to collect taxes on the shipment of wine and how to prevent minors from purchasing wine over the Internet, officials said.

Pennsylvania law permits wine consumers to purchase wine online from a licensed direct wine shipper within the state and have the wine shipped to the wine and liquor store of their choice.

However, the Supreme Court's ruling has permitted Pennsylvania and others to legislate how it would handle shipping wine to individuals.

Specifically, the court's ruling said in-state and out-of-state wineries should be treated equally. If one method is accepted or banned, the other should be accepted or banned, said PLCB Chairman Joseph Biron.

In the Granholm v. Heald decision, the U.S. Supreme Court ruled that a state cannot treat in-state and out-of-state wineries differently. The U.S. District Court for the Eastern District in Philadelphia also declared in 2005 Pennsylvania's direct-shipping laws unconstitutional in Cutner v. Newman.

State Sens. Jane Earll, R-Erie, John Pippy, R- Allegheny, and Jim Ferlo, D-Allegheny, as well as state Reps. Dante Santoni, D-Berks, and John Taylor, R-Philadelphia, have proposed legislation that would allow wineries to ship directly to residents while addressing the tax and prevention matters. While Santoni and Taylor joined together to help create House Bill 110, the senators have moved forward the companion Senate Bill 790.

Ferlo said SB 790 would require the collection of taxes annually on wines shipped to private residences and require an adult’s signature and proper identification before a shipment is delivered.

"I've presented bills for years since the Supreme Court ruling, and they have gone nowhere until now," Ferlo said, noting the latest bill moved out of the Senate Law and Justice Committee on Nov. 15 and next will be considered by the full Senate.

"It's been really hard to regulate this, which is why it took so long. This bill has had several amendments, and we wanted to make sure we were doing this right before codifying the court's decision," Ferlo said. "This legislation is reflective of the Supreme Court decision, and it had to be formalized in a way that protected consumers."

The Pennsylvania Winery Association, which advocates for the wine industry, is reviewing the bill and monitoring its progress, executive director Jennifer Eckinger said.

"We are always looking for opportunities to expand commerce," she said.

Bruce Brown, a Montgomery County resident, said he couldn't understand how the PLCB could continue prohibit the direct shipment of wine to consumers, when the high court said it was unconstitutional.

"I have a daughter in college in the Finger Lakes region of New York, and I'd carry around that Supreme Court decision with me to show wineries that it was legal to ship to me," Brown said. "We were occasionally successful in getting wine shipped to us.”

However, it is the job of the Legislature, not the PLCB, to enact measures that would legalize the direct shipment of wine to homes, said Patrick Stapleton, a member of the board since 1997.

"We have had no control over that. The law has to be changed to reflect the Supreme Court's decision," Stapleton said.

"We were waiting for legislation to give us the authority to change the law," the PLCB's Brion said. "We need the authority to do these things. We cannot enact legislation, and then there is also the issue of how to tax."

Stapleton and Brion said the state must decide how to enact legislation that follows the high court’s ruling.

"The laws we have are enforceable as long as they are applied equally to in-state and out-of-state wineries," Stapleton said, noting that the PLCB allows out-of-state wineries to ship to Pennsylvania if they apply for a limited winery license.

Pennsylvania is one of 14 states that restricts shipping of wine to residences.

The state's ban on direct shipment of wine is .

, to replace the current system of about 620 state-owned and operated liquor stores.

A study conducted by Public Financial Management, an independent financial advisory firm, found that the state could generate a one-time payment of $1.6 billion if it auctioned off the retail and wholesale liquor system.

Democrats and because it would cost the jobs of about 3,500 clerks who work in the state liquor stores. They have also expressed public safety concerns if the state were to double the number of liquor stores and allow private owners to operate them.

Last week, Gov. Tom Corbett said he wanted the state to get out of the liquor business.

"Take that money and there is a number of places we can invest it," Corbett said. He mentioned state pensions, transportation and education as possible uses for the revenue.