Wine distributor challenging tax

CHARLESTON - A Charleston wine distributor is claiming tax breaks given to in-state wineries violate the commerce clause of the U.S. Constitution and is suing the state's Alcohol Beverage Control Commission.

Associated Wine and Spirits filed the lawsuit Nov. 14 in Kanawha Circuit Court, also listing the Alcohol Beverage Control Administration's Department of Revenue and Commissioner Dallas Staples as defendants.

Attorney Henry Wood III is representing Associated Wine and Spirits and filed the petition for injunctive relief and temporary restraining order.

The petition says a 26-cent-per-litre tax on out-of-state wine is unfair and cites a decision in Michigan that determined that state was discriminating against out-of-state wine with a similar tax.

"Specifically, farm wineries are not required to utilize the three-tier system and are treated differently than your Petitioner (supplier) and specifically are not required to pay any litre tax," the petition says.

It adds that approximately 12 in-state wineries are excluded from the tax, while "suppliers required to pay the litre tax directly to the state as a condition of being licensed to do business in the State of West Virginia."

Currently, Associated Wine and Spirits has not paid a little more than $10,000 and says it has been told that it must pay the tax and obtain a letter of good standing from the state's taxing authority if it wants to continue engaging in the sale of wine as a supplier.

The petitioner says that should that happen, it will cause irreparable harm to the business.

Judge Jennifer Bailey Walker has been assigned the case.

Kanawha Circuit Court case number 06-C-2430