Roger Batt, lobbyist for the Idaho Grape Growers and Wine Producers, told the House Revenue & Taxation Committee today that Idaho wineries were surprised last August to receive a letter from the Idaho State Tax Commission, telling them go through their records going back three years, to see how much they'd given away in free product at wine-tastings, and pay sales and use tax on that amount. They were stunned, he said.
“It raised a question of why the state of Idaho was taxing businesses on losses,” Batt told lawmakers. Meetings then began between the wine industry and the Tax Commission, and it was determined that a use tax on free beverages given away at tastings “could not be fairly administered,” he said. “It was agreed then that a legislative fix was in order. We have worked with the Tax Commission on this fix.” The result is HB 489, which Batt said all parties have signed off on. It not only removes a tax requirement from wine given out at tastings, but from any beverage, for example, “a local farmer's market giving a free tasting of apple cider.” Batt said, “The Tax Commission has been excellent to work with.” The bill has an emergency clause, making it effective upon passage, and it's not estimated to cost the state general fund anything - because enforcing a tax on free sips of wine or cider given out at tastings was estimated to cost more than could be collected.
The committee voted unanimously to send the bill to the full House with a recommendation that it “do pass.”