If you are a winery with several labels of wine and if you choose to change the labels on those wines according to vintage, appellation, etc., it could prove to be an expensive proposition under new fees proposed by the Bush administration.
The fees are intended to raise an estimated $29 million to help cover regulatory functions of the federal Alcohol, Tax and Trade Bureau. Northwest lawmakers and wine industry leaders feel these proposed taxes are an unfair imposition on an industry that already pays its fair share to the federal government. Lawmakers killed the proposal last year, but it has resurfaced again in the Bush administration's budget proposal. Details of the new fees have not yet been released, but industry leaders expect they will be similar to those fees suggested last year, including up to $100 to garner approval for each label change, $200 to register changed wine formulas and $500 to apply for special permits. That is an extreme expense when you consider every year the labels change due to vintage. As it is now, wineries are required to get federal approval of their wine labels each time there is a significant change, such as the region where the grapes came from.
Washington is the nation's No. 2 producer of premium wine, behind California, with more than 400 wineries, 350 wine grape growers and 30,000 vineyard acres. This type of proposal would disproportionately impact small wineries in the region. More taxation on a small boutique and family owned wineries would be an extra burden. As it is, many "Mom & Pop" wineries operate with little income coming in and it is difficult for a new winery to pay such taxes when the first couple of years of operation they rarely have little to zero wine ready for retail. The wine industry in Washington and Oregon is rapidly growing and it is providing new economic opportunities for agriculture producers and communities. With these kind of new taxes, it's my opinion that it would discourage potential growth.