A new Idaho law allowing bonded warehouses is expected to benefit the state’s growing wine industry.
House Bill 343, which the recently adjourned Legislature passed and Gov. Brad Little signed, allows third parties to own bonded wine warehouses in Idaho. The warehouses would not be allowed to distribute or sell wine.
Under the new law, to receive a state license, a warehouse would need a federal permit for a bonded wine cellar “and may be required to post a continuing wine tax bond.”
That would allow the wine to be shipped to and from the warehouse without being taxed, unless it is removed from bond and delivered to a licensed distributor.
Winemakers who run out of on-site storage space will no longer have to ship their product to bonded warehouses elsewhere to be stored.
The law takes effect July 1, the beginning of the state’s fiscal year.
“Wineries are spending tens of thousands of dollars now to ship wine to Washington and Oregon, which already have this law,” said Roger Batt, legislative adviser for the Idaho Grape Growers and Wine Producers Commission. “This legislation does put that in place and does help the industry as a result.”
Winemakers now pay for shipping to and from warehouses in other states. Batt said that under the new law, “if an Idaho winery were to have a bumper crop, this would give the opportunity to store excess wine at a location close to the winery.”
HB 343 also “will keep revenue in the state and give the wine industry more opportunity to grow. There is high demand for Idaho wine.”
Martin Fujishin, of Fujishin Family Cellars west of Caldwell, expects the law to help the industry.
“Any time you can carve out shipping costs from the price of producing wine, as a small winery it frees up that revenue to do more things to improve the quality of your product,” he said. “And if we are going to be spending dollars to store wine, I would rather be spending those dollars locally than shipping them out of state.”
The new law also will make it easier for wineries to grow, and for the industry to add jobs and infrastructure, Fujishin said.
Batt said 25-50% of Idaho’s wineries have had to ship product out of state. The new law reduces the financial burden on wineries while allowing new or established businesses to serve multiple winery customers from Idaho and elsewhere.
A fiscal-impact statement attached to the legislation said licenses would cost $300 per year.
Idaho has 60 wineries.