WineAmerica Opposes Excise Tax Increases in Minnesota

February 28, 2013

To the Members of the House Taxes Committee:

WineAmerica, the National Association of American Wineries, on behalf of our members in Minnesota and across the nation, urge you to oppose H.F. 885 and any similar proposals.  Imposing significant wine excise tax increases would threaten the dynamic growth of Minnesota’s wine industry and the state’s valuable investments in cold climate grape hybridization research.

More than 50 wineries have been established in Minnesota in the last decade and over 60 are in operation.  The significant capital investment required for these businesses, in vineyards, equipment, and existing federal and state tax burdens, make excise tax increases particularly devastating.  Minnesota wineries are directly responsible for hundreds of jobs and millions in economic impact annually.  These businesses are dedicated to Minnesota family farming and sustainable rural development.  Imposing a 10-fold excise tax increase would significantly weaken the financial condition of the state’s wineries.

Minnesota is a world leader in cold climate grape hybridization research.  The dynamic growth of local wine industries, not only in Minnesota, but across the Midwest and Canada, are the direct result of the introduction of commercial grape varieties by the University of Minnesota.  Growers may obtain these varietals only from a licensed nursery.  The University maintains exclusive control over their sale and distribution, and research and the development of new varietals is ongoing.  Imposing significant excise tax increases would be at direct cross-purposes to this investment in cutting edge research.

Excise taxes do not target problem drinking.  95% of Americans who drink wine consume light-to-moderate amounts—consumption often associated with reduced healthcare costs.  Heavier drinkers, meanwhile, are the least responsive to tax changes.  Wine excise tax increases reduce healthful wine consumption without reducing problematic drinking.

Excise tax increases would be a devastating change for your state and for consumers.  WineAmerica urges you to vote against imposing new wine excise tax increases.

Sincerely,

Mark Chandler
Executive Director