Andrew Temple

My Simple License Issue Proposal

4 posts in this topic

So after the meeting, this is obviously a hot topic and Jason wanted some suggestions posted, so here is my short proposal. It's not super technical, but I thought it might be a good starting point to talk about the license issue. I think we can all agree on lower taxes across the board so this does not address the tax issue. It was great seeing the turnout last night, looking forward to what this year has in store!

 

Distillery License and Fee Proposal

 

1)      Eliminate two license types and have single license for distilleries. A fee increase is inevitable for current craft license holders however despite the percentage change, the overall increase is not a detriment to most or all businesses currently operating. Suggest $250-$350/year.

2)      In order to maintain monetary incentives of using a majority of Washington products, breaks will be allowed based on the individual product and not the license type. The compensation would be similar to the current craft license breaks in terms of a percentage of retail sales revenue that is not assessed on that product. I do not foresee the state being able to handle monthly tax reports with hundreds of different individual products (versus the current reports simply based on sales and production reports based on type of liquor etc). I propose that the additional paperwork that will inevitably be required should be the responsibility of the distillery. Fees can be calculated in full, but before final submission and payment, there can be a spot to subtract the amount owed based on the number and volume of products sold that qualify for the Washington state ingredient discount. The state would need paperwork filed for each TTB approved product that details raw ingredients used and can verify that the majority are local, and it would be the distiller’s responsibility to keep records and invoices for purchases on raw materials should an audit occur.

 

 

Benefits for Washington State

-Simplicity in one license type

-Incentives to support Washington raw materials. While these incentives exist now, this will open up more usage through current “full” license type distillers to take advantage as well where as currently it is only craft licensees. Also, this will allow current craft licensees to produce more unique products with ingredients not locally available, growing their business while also providing additional revenue for the state.

 

Benefits for Distilleries

-Simplicity of licensing, and a monetary break for commercial license holders

-Allows expansion of product lines for current craft license holders

-Lowers barriers to entry into the market for new distilleries

-Very little change to current record-keeping requirements

-One license type could streamline other legislation for benefits that the wine and beer industry already enjoy but our two license system is creating too much confusion

 

Potential issues:

-What does this mean in terms of distribution to off-premise licensees and to distributors and what do their fees look like?

-This benefits distilleries more, especially in tasting room sales, so how will the push back from larger distributors and players in the market fair?

-Can we quantify the benefits to the state with a dollar amount, as they may just see lower revenue with an initial look at a proposal like this?

 

There's my $.02, no matter what happens I'm just going to keep plugging along and making the best spirits I can, and adapt as needed as we see changes or not. We're still pretty new and green, so if I missed some blaring issue in this proposal please be nice!

Share this post


Link to post
Share on other sites

This is a good start, thanks!

 

1. Yes.

 

2. I think you've laid out a logical evolution of the craft concept but I still feel this will create a level of complication that the LCB won't agree to, and it makes it virtually impossible to regulate the integrity of the WA-ingredient products. The LCB can barely keep up with basic enforcement, so they won't be showing up to calculate percentage of raw ingredients used. I think we need something simpler...

 

***

I propose a Washington Distiller's effort to redefine what craft means to our community. So much of the static that our industry has endured over the last 8 years has been tied exclusively to the 51% WA resource inclusion, which has provided advantages to only some distillers. But this craft definition, and its financial benefits, have excluded some of our state's best distiller talent. 

 

What I love about the spirits industry in general is the huge universe of opportunities - from distilling techniques, aging, agricultural options, macerations & infusions, baking, malting, smoking... on and on. It's a world of DIVERSITY. In WA we have incredible craftsman in many corners of this spirits universe. I propose we treat each other respectfully to celebrate this diversity, and promote the range of talent in the Washington distilling community through a broader definition of "Craft". The makers of absinthe, liqueurs, vermouths, rums, gins, etc need to be included at the table. 

 

If this all sounds fair, then we need to get to work on a roadmap where our ultimate goal is taxation parity with the Washington beer/wine industries. Any initiatives & proposals need to be aligned with this direction. I honestly think we need to pause on talking about what exactly gets a discount until we get a better perspective on the roadmap - what are the opportunities, and what are the barriers. But we need to do it together.

 

John

3 people like this

Share this post


Link to post
Share on other sites

I agree with John & AJ. Thanks for the input. The Board is currently discussing forming a separate committee to put forth a complete proposal of how this might work.

 

I proposed we include at least one voice of each license on the committee to encourage exclusive forward momentum. If you are interested in being a part of this committee and committing 2-3 hours a week, perhaps bi-monthly for the next few months, please reach out to board@washigntondistillersguild.org

 

What I propose: This is not a self-serving, agenda committee. This committee will work to unite the license types; begin creating a successful roadmap of a ten year plan for the WDG; propose subsequent legislation for the Guild to put forth & give the Board a better idea of where they will be headed when they step into Board rolls. I don't think a few active members should decide for a whole--if only because everyone is so darn busy running their own business--which, it turns out to be the case quite a bit.

 

These committee meetings could be group Skype, conference calls, or in person. Preferably, having more than just Seattle distilleries involved would be ideal, although we will need folks that have a working knowledge of how to get this done, perhaps a bit of background.

Share this post


Link to post
Share on other sites

I agree with Holly.  Count me in.   

"I propose a Washington Distiller's effort to redefine what craft means to our community."

I realize that this pig may already be out of the pen, but I'd like to see the term "craft" dropped from legislative language altogether, in favor of of the term "micro", if there has to be a distinction. It has no business there because, as we've seen over the last eight years, it's as subjective as religion. Legislating the definition of "craft" is like legislating the definition of "love".  Literally.  

I'd be grateful to serve on the committee, if you'll have me.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!


Register a new account

Sign in

Already have an account? Sign in here.


Sign In Now