Wine/alcohol tax exemption

AN ACT Relating to providing a 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
S-0035.1
SENATE BILL 5024
State of Washington 69th Legislature 2025 Regular Session
By Senators Warnick, Stanford, Chapman, Dozier, and Nobles
Prefiled 12/10/24. Read first time 01/13/25. Referred to Committee
on Labor & Commerce.
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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 17
month in the manner and upon such forms as may be prescribed by the 18
board. 19
(d) A winery's sale of the first 20,000 gallons of table wine or 20
cider in a calendar year is:21
(i) Subject to tax at a rate of $0.0528 per liter for table wine 22
or cider; and23
(ii) Not subject to any other taxes under this section on sales 24
of the first 20,000 gallons of table wine or cider except for taxes 25
imposed under subsection (3) of this section for the Washington wine 26
commission.27
(e) Taxes collected pursuant to (d) of this subsection (1) must 28
be deposited in the liquor revolving fund and are subject to the 29
allocation to Washington State University in RCW 66.08.180(4).30
(2) ((An)) Except as provided in subsection (1)(d) of this 31
section, an additional tax is imposed equal to the rate specified in 32
RCW 82.02.030 multiplied by the tax payable under subsection (1) of 33
this section. All revenues collected during any month from this 34
additional tax must be transferred to the state general fund by the 35
twenty-fifth day of the following month. 36
(3) An additional tax is imposed on wines subject to tax under 37
subsection (1) of this section, at the rate of one-fourth of one cent 38
per liter for wine sold after June 30, 1987. After June 30, 1996, 39
such additional tax does not apply to cider. An additional tax of 40
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five one-hundredths of one cent per liter is imposed on cider sold 1
after June 30, 1996. All revenues collected under this subsection (3) 2
shall be disbursed quarterly to the Washington wine commission for 3
use in carrying out the purposes of chapter 15.88 RCW.4
(4) ((An)) Except as provided in subsection (1)(d) of this 5
section, an additional tax is imposed on all wine subject to tax 6
under subsection (1) of this section. The additional tax is equal to 7
twenty-three and forty-four one-hundredths cents per liter on 8
fortified wine as defined in RCW 66.04.010 when bottled or packaged 9
by the manufacturer, one cent per liter on all other wine except 10
cider, and eighteen one-hundredths of one cent per liter on cider. 11
All revenues collected during any month from this additional tax 12
shall be deposited in the state general fund by the twenty-fifth day 13
of the following month. 14
(5)(a) ((An)) Except as provided in subsection (1)(d) of this 15
section, an additional tax is imposed on all cider subject to tax 16
under subsection (1) of this section. The additional tax is equal to 17
two and four one-hundredths cents per liter of cider sold after June 18
30, 1996, and before July 1, 1997, and is equal to four and seven 19
one-hundredths cents per liter of cider sold after June 30, 1997.20
(b) All revenues collected from the additional tax imposed under 21
this subsection (5) must be deposited in the state general fund.22
(6) For the purposes of this section, "cider" means table wine 23
that contains not less than one-half of one percent of alcohol by 24
volume and not more than eight and one-half percent of alcohol by 25
volume and is made from the normal alcoholic fermentation of the 26
juice of sound, ripe apples or pears. "Cider" includes, but is not 27
limited to, flavored, sparkling, or carbonated cider and cider made 28
from condensed apple or pear must. 29
(7) For the purposes of this section, out-of-state wineries must 30
pay taxes under this section on wine sold and shipped directly to 31
Washington state residents in a manner consistent with the 32
requirements of a wine distributor under subsections (1) through (4) 33
of this section, except wineries shall be responsible for the tax and 34
not the resident purchaser. 35
(8) Notwithstanding any other provision of this section, any 36
domestic winery or wine certificate of approval holder acting as a 37
distributor of its own production that had total taxable sales of 38
wine in Washington state of six thousand gallons or less during the 39
calendar year preceding the date on which the tax would otherwise be 40
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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 or individuals.11
(3) It is the legislature's specific public policy objective to 12
promote the development of small wineries. These small businesses 13
face challenges entering the industry and it is the legislature's 14
public policy objective to assist these wineries to grow and 15
stabilize. Small wineries have faced significant challenges in recent 16
years including the great recession, COVID-19 restrictions, impact of 17
wildfire smoke, and weather challenges. Every year dozens of small 18
wineries close their doors forever. The loss of these businesses 19
means Washington loses not just the wine excise tax income from these 20
wineries, but also the sales and use tax income, the business and 21
occupation tax income, and the jobs, tourism opportunities, and 22
community contributions these wineries would otherwise make.23
(4) The joint legislative audit and review committee must conduct 24
an initial evaluation of the tax preference in this section by 25
January 1, 2030. A final evaluation of the tax preference in this 26
section must be conducted by January 1, 2035. 27
(5) If the review finds that the: (a) Number of wineries 28
producing less than 20,000 gallons per year going out of business is 29
decreased; (b) number of wineries that were producing less than 30
20,000 gallons per year in 2025 that are subsequently producing more 31
than 20,000 gallons per year is increased; or (c) amount of sales and 32
use tax collected by wineries has increased, then the legislature 33
intends to extend the expiration date of this tax preference.34
(6) In order to obtain the data necessary to perform the review 35
in subsection (5) of this section, the joint legislative audit and 36
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review committee may refer to any data collected by the state, 1
including the Washington wine commission. 2
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