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Other stories in News

Tennessee wine transport bill passes Senate

By Lucas L. Johnson II
The Associated Press
Originally published: March 31. 2009 3:01AM
Last modified: March 30. 2009 11:18PM

NASHVILLE -- Tennesseans could buy up to five cases of wine at out-of-state wineries and carry them back into Tennessee under a proposal that passed the Senate on Monday night.

The measure sponsored by Sen. Doug Overbey, a Maryville Republican, was approved unanimously without debate. The companion bill has been assigned to the House State and Local Government Committee.

The measure is designed to overcome a recent federal appeals court opinion that found existing rules designed to promote Tennessee wineries are unfair to competitors from outside the state.

The change would mark the first time in at least 70 years that Tennesseans are allowed to bring alcohol into the state.

"We have worked hard on the bill," Overbey said after the vote. "I think the bill addressed the issues that had been raised in the court system. I hope this will give it a good impetus to also pass in the House."

Under a 1939 Tennessee law that created the state's rigid three-tier beverage control system, alcohol is supposed to flow from the manufacturer to a wholesale distributor and finally to the retailers.

That law also made it illegal "for any person to import or transport ... into the State of Tennessee, any alcoholic beverages," other than under the three-tier system.

One exception from that rule was a provision under the "Grape and Wine Law" to allow visitors to buy up to five cases at state wineries using at least 75 percent of ingredients produced within Tennessee. That's where the law ran afoul with the 6th U.S. Circuit Court of Appeals.

However, state Attorney General Bob Cooper said in an opinion released last week that Overbey's proposed law change would address the legal concerns raised by the federal court.

Under the bill, consumers would have to carry receipts showing they paid all Tennessee taxes with the wine they transport into the state.

But state Revenue Commissioner Reagan Farr has said it will be difficult for the state to make sure the wine buyers have paid the state taxes.

Tennessee charges a $1.21 tax on each gallon of wine, along with a combined state and local sales taxes of up to 9.75 percent.

There are more than 400 wineries in Tennessee's eight neighboring states. The Tennessee Farm Winegrowers Association has 33 members. Under Overbey's bill, Tennesseans could bring home wine purchased from out-of-state wineries that acquire a $450 Tennessee winery license.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.