Winery tax exemption

AN ACT Relating to providing tax exemption for the first 20,000 1
gallons of wine sold by a winery in Washington; amending RCW 2
66.24.210; and creating a new section. 3
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:4
Sec. 1. RCW 66.24.210 and 2023 c 470 s 1012 are each amended to 5
read as follows: 6
(1) ((There)) Except as provided in (d) of this subsection, there 7
is hereby imposed upon all wines except cider sold to wine 8
distributors within the state a tax at the rate of twenty and one-9
fourth cents per liter. Any domestic winery or certificate of 10
approval holder acting as a distributor of its own production must 11
pay taxes imposed by this section. ((There)) Except as provided in 12
(d) of this subsection, there is hereby imposed on all cider sold to 13
wine distributors within the state a tax at the rate of three and 14
fifty-nine one-hundredths cents per liter. However, wine sold or 15
shipped in bulk from one winery to another winery is not subject to 16
such tax. 17
(a) The tax provided for in this section shall be collected by 18
direct payments based on wine purchased by wine distributors.19
(b) Except as provided in subsection (7) of this section, every 20
person purchasing wine under the provisions of this section must on 21
H-0135.1
HOUSE BILL 1384
State of Washington 69th Legislature 2025 Regular Session
By Representatives Wylie, Waters, and Timmons
Read first time 01/17/25. Referred to Committee on Finance.
p. 1 HB 1384
or before the twentieth day of each month report to the board all 1
purchases during the preceding calendar month in such manner and upon 2
such forms as may be prescribed by the board, and with such report 3
must pay the tax due from the purchases covered by such report unless 4
the same has previously been paid. Any such purchaser of wine whose 5
applicable tax payment is not postmarked by the twentieth day 6
following the month of purchase will be assessed a penalty at the 7
rate of two percent a month or fraction thereof. The board may 8
require that every such person shall execute to and file with the 9
board a bond to be approved by the board, in such amount as the board 10
may fix, securing the payment of the tax. If any such person fails to 11
pay the tax when due, the board may suspend or cancel the license 12
until all taxes are paid. 13
(c) Any licensed retailer authorized to purchase wine from a 14
certificate of approval holder with a direct shipment endorsement or 15
a domestic winery must make monthly reports to the liquor and 16
cannabis board on wine purchased during the preceding calendar month 17
in the manner and upon such forms as may be prescribed by the board.18
(d) Any winery that sells less than 20,000 gallons of table wine 19
or cider in a calendar year is:20
(i) Subject to tax at a rate of $0.0528 per liter for table wine 21
or cider; and22
(ii) Not subject to any other taxes under this section on sales 23
of the first 20,000 gallons of table wine or cider except for taxes 24
imposed under subsection (3) of this section for the Washington wine 25
commission.26
(e) Taxes collected pursuant to (d) of this subsection (1) must 27
be deposited in the liquor revolving fund and are subject to the 28
allocation to Washington State University in RCW 66.08.180(4).29
(2) ((An)) Except as provided in subsection (1)(d) of this 30
section, an additional tax is imposed equal to the rate specified in 31
RCW 82.02.030 multiplied by the tax payable under subsection (1) of 32
this section. All revenues collected during any month from this 33
additional tax must be transferred to the state general fund by the 34
twenty-fifth day of the following month. 35
(3) An additional tax is imposed on wines subject to tax under 36
subsection (1) of this section, at the rate of one-fourth of one cent 37
per liter for wine sold after June 30, 1987. After June 30, 1996, 38
such additional tax does not apply to cider. An additional tax of 39
five one-hundredths of one cent per liter is imposed on cider sold 40
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after June 30, 1996. All revenues collected under this subsection (3) 1
shall be disbursed quarterly to the Washington wine commission for 2
use in carrying out the purposes of chapter 15.88 RCW.3
(4) ((An)) Except as provided in subsection (1)(d) of this 4
section, an additional tax is imposed on all wine subject to tax 5
under subsection (1) of this section. The additional tax is equal to 6
twenty-three and forty-four one-hundredths cents per liter on 7
fortified wine as defined in RCW 66.04.010 when bottled or packaged 8
by the manufacturer, one cent per liter on all other wine except 9
cider, and eighteen one-hundredths of one cent per liter on cider. 10
All revenues collected during any month from this additional tax 11
shall be deposited in the state general fund by the twenty-fifth day 12
of the following month. 13
(5)(a) ((An)) Except as provided in subsection (1)(d) of this 14
section, an additional tax is imposed on all cider subject to tax 15
under subsection (1) of this section. The additional tax is equal to 16
two and four one-hundredths cents per liter of cider sold after June 17
30, 1996, and before July 1, 1997, and is equal to four and seven 18
one-hundredths cents per liter of cider sold after June 30, 1997.19
(b) All revenues collected from the additional tax imposed under 20
this subsection (5) must be deposited in the state general fund.21
(6) For the purposes of this section, "cider" means table wine 22
that contains not less than one-half of one percent of alcohol by 23
volume and not more than eight and one-half percent of alcohol by 24
volume and is made from the normal alcoholic fermentation of the 25
juice of sound, ripe apples or pears. "Cider" includes, but is not 26
limited to, flavored, sparkling, or carbonated cider and cider made 27
from condensed apple or pear must. 28
(7) For the purposes of this section, out-of-state wineries must 29
pay taxes under this section on wine sold and shipped directly to 30
Washington state residents in a manner consistent with the 31
requirements of a wine distributor under subsections (1) through (4) 32
of this section, except wineries shall be responsible for the tax and 33
not the resident purchaser. 34
(8) Notwithstanding any other provision of this section, any 35
domestic winery or wine certificate of approval holder acting as a 36
distributor of its own production that had total taxable sales of 37
wine in Washington state of six thousand gallons or less during the 38
calendar year preceding the date on which the tax would otherwise be 39
p. 3 HB 1384
due is not required to pay taxes under this section more often than 1
annually. 2
NEW SECTION. Sec. 2. (1) This section is the tax preference 3
performance statement for the tax preference contained in section 1, 4
chapter . . ., Laws of 2025 (section 1 of this act). This performance 5
statement is only intended to be used for subsequent evaluation of 6
the tax preference. It is not intended to create a private right of 7
action by any party or to be used to determine eligibility for 8
preferential tax treatment.9
(2) The legislature categorizes this tax preference as one 10
intended to provide tax relief to certain businesses and individuals 11
and to create or retain jobs, as indicated in RCW 82.32.808(2) (c) 12
and (e). 13
(3) It is the legislature's specific public policy objective to 14
promote the development of small wineries and the jobs they provide. 15
These small businesses face challenges entering and surviving in the 16
industry and it is the legislature's public policy objective to 17
assist these wineries to grow and stabilize. Small wineries do not 18
benefit from the economies of scale and product distribution networks 19
available to large wineries. Small wineries have faced significant 20
recent and ongoing challenges, including the great recession, 21
COVID-19 pandemic, and climate change impacts, such as increased 22
wildfire smoke and extreme weather events. 23
(4) If a review finds that the tax preference accomplishes its 24
goal of promoting small wineries, measured by an increase in the 25
number of Washington wineries in business, an increase in the number 26
of wine industry jobs, or an increase in wine excise taxes collected, 27
compared to the end of the 2024 state fiscal year, then the 28
legislature intends to extend the expiration date of this tax 29
preference. 30
(5) In order to obtain the data necessary to perform the review 31
in subsection (4) of this section, the joint legislative audit and 32
review committee may refer to any data collected by the state, 33
including the Washington wine commission. 34
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