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- Supporters highlighted the potential for significant new tax revenues while touting consumer freedom. Reaction on the street is mixed.
With Mississippi’s new direct-to-consumer wine shipping law going into effect earlier this month, wine connoisseurs and the curious alike can now order directly from merchants across the nation, a benefit that appeals to consumers and could buoy the state’s coffers, said supporters.
How we got here
The bill, SB 2145, was signed by Governor Tate Reeves (R) in February after legislative wrangling between the two chambers. Supporters highlighted the potential for significant new tax revenues while touting consumer freedom. Opponents argued the potential negative impact the new law would have on underage drinking and the state’s package stores.
In the state Senate, the bill was narrowly passed after a last-minute attempt by supporters brought the legislation back after it failed less than 15 hours earlier. Senators voted against the measure on its first floor action, but upon reconsideration passed the bill by a vote of 24 to 14, achieving the needed three-fifths threshold necessary to pass as more senators were recorded as absent than in the previous vote.
READ MORE: On second thought, Senate reaches threshold to pass direct wine shipping to Mississippi residents
In the House of Representatives, the measure received smoother sailing as it was approved by an 80 to 29 margin, also clearing the required three-fifths threshold necessary for passage.
READ MORE: House passes Senate’s direct wine shipping bill
Impact of new law
The bill’s author as well as the wine industry’s trade organization said the new law is good for Mississippi and consumers.
After eight years of trying to get the bill passed, State Senator Walter Michel (R) said lawmakers recognized that the public’s mood has changed on importing specialty and rare wines. Politicians saw more people were willing to pay for importing wines, he said.
Importing wines is not a new concept. Forty-seven other states allow direct shipments to their citizens. Senator Michel said that with the proper safeguards in place, there was not a good reason for Mississippi to be the 48th.
Safeguards are normal for states that allow direct shipments of wine, said Hunter Limbaugh, the Southeastern Counsel for The Wine Institute, the industry’s trade organization. Such standards include requiring a signature for delivery of all orders by someone over 21 years of age, showing proper identification, and requiring that sellers register with the state’s Department of Revenue and pay a $100 license fee.
The state stands to collect a 15.5 percent tax on all orders, much higher than the 7 percent tax collected from package stores.
Michel and Limbaugh said the 15.5 percent tax could bring in millions of dollars in new state revenue. However, the law was not scored, and neither knew exactly how much to expect in new revenues. “But it’s easy money,” Michel said.
During a recent Stennis Capitol Press Forum, Speaker of the House Jason White (R) praised the new law, also saying the increased tax in the new wine shipping law will be good for Mississippi’s revenue.
The law requires that 3 percent of the new tax revenue go to mental health services for an “Alcoholism Treatment and Rehabilitation Fund.”
Both Michel and the Wine Institute believe the new law will have a positive impact on Mississippians, especially those who drink specialty and rare wines. There are about 10,000 wineries across the U.S., they said, so Mississippi package stores simply cannot carry every wine. However, direct-to-consumer shipping will widen a wine drinker’s choices.
The new law, said proponents, also frees up the ABC Warehouse as it does not require inventorying of direct-to-consumer wines. Storing the adult beverage at a single warehouse for all Mississippi consumers has been daunting, and the structure is too small to hold its contents.
“This law will help bring a solution to that issue,” he said.
Lawmakers have invested state funds into a new $95 million facility currently under construction to aid in ABC’s challenges with storage and shipping.
READ MORE: Construction of new Mississippi alcohol warehouse on schedule
Reaction on the street
It remains unclear how the new direct wine shipping bill will impact Mississippi’s package stores. Calls to several retailers across the state were met with no comments from managers and owners. The industry’s state trade group, the Mississippi Independent Package Store Association, did not respond to requests for comments.
Customers at two package stores in the Jackson area were unaware of the new law when asked for their thoughts on its passage. Many said they did not drink rare or specialty wines.
At an upscale package store on Jackson’s Fortification Street, customers were mainly interested in purchasing wines readily available.
Candace Simpson, a nurse at a nearby hospital, said she can find “enjoyable” and “nice tasting” wines locally.
For Simpson, the 15.5 percent tax on direct-to-consumer purchases would stop her from ordering a specialty wine. She said the tax “is too much.”
Yet, after a short pause, she added, “Perhaps, if it was a special event, a wedding, college graduation, birth, something like that, I might splurge for a specialty wine,” she said, with a slight chuckle.
At another package store on the city’s Medgar Evers Boulevard, customers laughed when asked if the new law would impact their decisions on wines.
“Brother, this is Mississippi; only the 1 percent can afford rare wines,” said Rodney Jackson, a 31-year-old construction worker.
After hearing the new law’s provisions, Jackson said he finds his needs met at local stores.
“Fifteen and a half percent for taxes?” he questioned.
“That’s not for us working folks,” he said before jumping into a black Cadillac Escalade.
