Legislative Update: Bills Sent to the Governor
/Eighty bills were delivered to Governor Andrew Cuomo on Tuesday, and three of them will directly affect wine producers and retailers if signed. Pursuant to section 7 of Article IV of the State Constitution, the Governor has until November 21st to sign or veto these bills.[1] See below for summaries of the wine-related bills, and be sure to check my legislation tracker for updates on these measures and some of the other wine-related legislation that is currently pending.
S 440B: Selling to Businesses on Credit
This bill would allow wine and liquor retailers to extend store credit to businesses and corporations. Currently, Section 100(5) the Alcoholic Beverage Control Law (“ABC Law”) prohibits off-premises licensees from selling alcoholic beverages on credit except in the case of wines sold to religious organizations for sacramental purposes and wines that are delivered to residential addresses. In almost every case, a person or organization buying wine from an off-premises retailer (most likely a liquor store) must pay up front.[2]
Senate Bill 440B, sponsored by Senator Patrick M. Gallivan (R/C/IP-59th District), would add a new sub-section to the ABC Law that would allow an off-premises retail licensee to sell alcoholic beverages on credit to a business or corporation. A liquor store could sell wine to a small law firm or a nonprofit organization on credit for a holiday party, for example. The bill, which would take effect immediately, would limit the credit period to no more than thirty days.
S 1130A: All-night Liquor Permits
Senate Bill 1130A, sponsored by Senator Tony Avella (D-11th District), would require applicants for all-night liquor permits to notify local community boards of their intent to apply for such licenses. Section 99 of the ABC Law authorizes the State Liquor Authority (“NYSLA”) to issue “special permits” that allow an on-premises licensee to remain open between the hours of 4 a.m. (or a locally prescribed closing time) and 8:00 a.m. These permits are most often sought on special occasions such as New Year’s Eve. While Section 99 does impose any notice requirement, NYSLA currently requires that an all-night permit applicant notify the relevant police precinct of his or her intent to apply.
Senate Bill 1130A would codify the police precinct notice requirement and also require that notice of intent be provided to the relevant community board. In many instances—particularly when the premises is located very close to residential buildings—this new requirement will make it more difficult for applicants to obtain all-night permits. The bill would take effect immediately.
S 4668: Paperwork Reduction for Small, Non-farm Wineries
Senate Bill 4668, sponsored by Senator Kenneth LaValle (R-1st District), would exempt small, non-farm wineries from the requirement to file annual information returns regarding their transactions with vendors that are subject to the sales tax. Current law provides:
For each vendor, operator, or recipient to whom the wholesaler has made a sale without collecting sales or compensating use tax, the return must include the total value of those sales made during the period covered by the return . . . and the vendor's, operator's or recipient's state liquor authority license number. . . .
N.Y. Tax. Law § 1136(i)(1)(C). The return must also include the name, address, certificate of authority or federal identification number for each sales tax buyer, and any other information required by the Commissioner of Taxation and Finance. N.Y. Tax. Law § 1136(i)(2).[3] As you can probably imagine, completing the annual return is a hassle.
In 2012, farm wineries were granted a statutory exemption from this reporting requirement. Senate Bill 4668 would extend that exemption to include non-farm wineries that produce less than 150,000 gallons of wine annually. The bill is intended to reduce the administrative burden on small wineries.
Stay tuned for updates on these measures, and don't forget to check the bill tracker for more information!
[1] If the Governor takes no action, this will result in a “pocket approval” (i.e., the bill will be approved automatically.
[2] Existing law does allow the use of credit cards, by which the credit card company pays for the merchandise and the cardholder promises to pay the card company back. In this case, the credit card company becomes the creditor. Current law generally does not allow a liquor store or other off-premises licensee to become the creditor.
[3] The Commissioner may, in his or her discretion, require less than all of this information.
