I used to joke about the possibility that agents of the state would come crashing through the front door of a wine collector and arrest that individual for drinking a bottle of wine purchased on the Internet.
Then came the 2005 Supreme Court decision in Granholm vs. Heald, which ruled that states could not discriminate against out-of-state wineries. If they allowed citizens to purchase wine from properties within their borders, they had to allow shipments from outside wineries as well.
However, Granholm vs. Heald only applied to wineries. Many states (37, to be exact) still prohibit the purchase of wine from out-of-state retailers. The Supremes are currently considering whether to review a case that would test whether wine retailers are legally allowed to ship all over the country.
If you read the Commerce Clause of the Constitution, the issue seems simple enough—interstate commerce is supposed to be an area where discrimination is illegal. The law becomes a bit muddy when it comes to alcohol. After the Repeal of Prohibition, the authority to regulate alcohol sales was left up to the states. “Regulate,” in this context, means the ability to tax sales of the product.
In other words, the state governments want their cut. It’s that simple, and it has nothing to do with morality. If you live in Florida and order wine from a California retailer, the odds are you won’t pay sales tax. Nor will the state be able to collect a bevy of other taxes that apply to alcohol sales. During Prohibition, the state governments sat around and watched guys like Al Capone and Joe Kennedy make billions as bootleggers without compensating them, and they vowed that it would never happen again.
The solution seems as simple as the meaning of the Commerce Clause: Make the retailers collect the taxes, and we’ll all be free to buy what we want. While some states (such as Pennsylvania) completely control all alcohol sales, many have what’s known as a “three-tier system.” The booze must be channeled from the producer through a distributor to the consumer. The major national distributors form a powerful lobby—one of them had revenues of $8.5 billion last year, and they’re not likely to allow retailers to put them out of business.
The case in question is Wine Country Gift Baskets vs. Steen, if you want to follow it. And watch your front door very, very carefully.
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