In September, California Governor Gavin Newsom signed SB19, AB239 and AB1267 into law. This new legislation relaxes some restrictions on wineries and expands tasting room privileges. Set to take effect on January 1, 2022, and create the following changes:
- Increase number of permitted off-site tasting rooms
- Allow the sale and delivery of wine to consumer-provided containers
- Allow charitable donations in connection with the sale of alcohol
Certainly, the changes come as a means to help California wineries with post-pandemic recovery. Here is what the new laws entail:
An Increase in the Number of Off-Site Tasting Rooms (Senate Bill 19)
Currently, Type 02 wineries in California are permitted to operate only one tasting room away from their licensed Type 02 premises where the wine is crushed and fermented. Under SB19, Section 23390.5, ammendments are being made to the California Alcoholic Beverage Control Act (ABC Act) which will allow a winery to operate a second Duplicate Type 02 premises.
Therefore, avoiding additional production facility costs, the second off-site tasting room allows wineries to expand.
Sale and Delivery of Consumer-Provided Containers at Duplicate Type 02 Tasting Rooms (Assembly Bill 239)
Section 23390 of the ABC Act prohibits a Duplicate Type 02 premises from selling or delivering wine to consumers in containers that have been supplied, furnished or sold by the consumer. Under AB239, that exception will be removed, and consumers may provide their own bottles or containers to be filled at an off-site tasting room.
This change subsequently allows wineries to save on material expenses, benefitting the cost for consumer’s. And reusable containers will be an important change for environmental responsibility.
Advertisements of Charitable Donations in Connection with the Sale of Alcohol (Assembly Bill 1267)
Under the ABC Act, an alcoholic beverage licensee faces regulations. A charitable organization cannot receive a gift or donation if the gift has ties to the sale of alcohol. Thus, wineries cannot advertise charitable donations as a way to incentivize consumers.
Under AB1267, an amendment to Section 25600 of the ABC Act shows a temporary exception. During COVID-19, this amendment allows businesses to give proceeds from the sale of alcoholic beverages solely to COVID-19 relief charities. The ability to donate a portion of the proceeds of alcoholic beverage sales to any nonprofit charitable organization will remain. This exceeds limitations to COVID-19 relief charities.
Ab1267 Is Subject to the Following Limitations:
- Donations can only come from proceeds of the sale or distribution of alcoholic beverages in manufacturer-sealed containers. Sales of alcohol to consumer-provided containers will not be eligible.
- Promotion for the charitable donation must not directly encourage or reference the consumption of alcoholic beverages
- The donation cannot benefit a retail licensee or charity benefiting the employees of a retail licensee. Advertisements for the donation may not promote or reference a retail licensee.
Valid through January 1, 2025, this statutory exception requires additional legislation.
Take Advantage of New Legislation
Accordingly, if you have questions about taking advantage of this new legislations, please reach out to us! Allen Wine Group is ready to assist with any tax and accounting questions or challenges you may have. Contact us today to schedule your free and confidential consultation.
