House Bill No. 308
Introduced By pavlovich, quilici, lynch, cocchiarella, shea, menahan
A Bill for an Act entitled: "An Act authorizing the sale of cider; defining "cider"; imposing a tax on the importation or sale
of cider; CLARIFYING THAT THE ADDITIONAL TAX ON TABLE WINE DOES NOT APPLY AS AN
ADDITIONAL TAX ON CIDER; CLARIFYING THAT THE DEPARTMENT OF REVENUE MUST COLLECT THE
TAX ON THE SALE OF CIDER IN THE SAME MANNER IT NOW COLLECTS TAXES ON TABLE WINE;
providing for the distribution of revenue received from the tax on cider; authorizing licensed table wine distributors to sell
cider under a license to sell table wine; amending sections 16-1-106, 16-1-411, 16-2-301,
16-3-415, and 16-3-418, MCA;
and providing an effective date."
Be it enacted by the Legislature of the State of Montana:
Section 1. Section 16-1-106, MCA, is amended to read:
"16-1-106. Definitions. As used in this code, the following definitions apply:
(1) "Agency franchise agreement" means an agreement between the department and a person appointed to sell liquor and table wine as a commission merchant rather than as an employee.
(2) "Agency liquor store" means a store operated under an agency franchise agreement in accordance with this code for the purpose of selling liquor at either the posted or retail price for off-premises consumption.
(3) "Alcohol" means ethyl alcohol, also called ethanol, or the hydrated oxide of ethyl.
(4) "Alcoholic beverage" means a compound produced and sold for human consumption as a drink that contains more than 0.5% of alcohol by volume.
(5) "Beer" means a malt beverage containing not more than 7% of alcohol by weight.
(6) "Beer importer" means a person other than a brewer who imports malt beverages.
(7) "Brewer" means a person who produces malt beverages.
(8) "Cider" means an alcoholic beverage that is made from the alcoholic fermentation of the juices of apples or pears and that contains not less than 0.5% alcohol by volume and not more than 6.9% alcohol by volume, including but not limited to flavored, sparkling, or carbonated cider.
(9) "Community" means:
(a) in an incorporated city or town, the area within the incorporated city or town boundaries;
(b) in an unincorporated city or area, the area identified by the federal bureau of the census as a community for census purposes; and
(c) in a consolidated local government, the area of the consolidated local government not otherwise incorporated.
(9)(10) "Department" means the department of revenue, unless otherwise specified. (10)(11) "Immediate family" means a spouse, dependent children, or dependent parents. (11)(12) "Import" means to transfer beer or table wine from outside the state of Montana into the state of Montana. (12)(13) "Industrial use" means a use described as industrial use by the federal Alcohol Administration Act and the federal
rules and regulations of 27 CFR. (13)(14) "Liquor" means an alcoholic beverage except beer and table wine. (14)(15) "Malt beverage" means an alcoholic beverage made by the fermentation of an infusion or decoction, or a
combination of both, in potable brewing water, of malted barley with or without hops or their parts or their products and
with or without other malted cereals and with or without the addition of unmalted or prepared cereals, other carbohydrates,
or products prepared from carbohydrates and with or without other wholesome products suitable for human food
consumption. (15)(16) "Package" means a container or receptacle used for holding an alcoholic beverage. (16)(17) "Posted price" means the wholesale price of liquor for sale to persons who hold liquor licenses as fixed and
determined by the department and in addition an excise and license tax as provided in this code. (17)(18) "Proof gallon" means a U.S. gallon of liquor at 60 degrees on the Fahrenheit scale that contains 50% of alcohol by
volume. (18)(19) "Public place" means a place, building, or conveyance to which the public has or may be permitted to have access
and any place of public resort. (19)(20) "Retail price" means the price established by an agent for the sale of liquor to persons who do not hold liquor
licenses. The retail price may not be less than the department's posted price. (20)(21) "Rules" means rules adopted by the department or the department of justice pursuant to this code. (21)(22) "State liquor warehouse" means a building owned or under control of the department for the purpose of receiving,
storing, transporting, or selling alcoholic beverages to agency liquor stores. (22)(23) "Storage depot" means a building or structure owned or operated by a brewer at any point in the state of Montana
off and away from the premises of a brewery, which structure is equipped with refrigeration or cooling apparatus for the
storage of beer and from which a brewer may sell or distribute beer as permitted by this code. (23)(24) "Subwarehouse" means a building or structure owned or operated by a licensed beer wholesaler or table wine
distributor, located at a site in Montana other than the site of the beer wholesaler's or table wine distributor's warehouse or
principal place of business, and used for the receiving, storage, and distribution of beer or table wine as permitted by this
code. (24)(25) "Table wine" means wine that contains not more than 16% alcohol by volume and includes cider. (25)(26) "Table wine distributor" means a person importing into or purchasing in Montana table wine for sale or resale to
retailers licensed in Montana. (26)(27) "Warehouse" means a building or structure located in Montana that is owned or operated by a licensed beer
wholesaler or table wine distributor for the receiving, storage, and distribution of beer or table wine as permitted by this
code. (27)(28) "Wine" means an alcoholic beverage made from or containing the normal alcoholic fermentation of the juice of
sound, ripe fruit or other agricultural products without addition or abstraction, except as may occur in the usual cellar
treatment of clarifying and aging, and that contains more than 0.5% but not more than 24% of alcohol by volume. Wine
may be ameliorated to correct natural deficiencies, sweetened, and fortified in accordance with applicable federal
regulations and the customs and practices of the industry. Other alcoholic beverages not defined in this subsection but made
in the manner of wine and labeled and sold as wine in accordance with federal regulations are also wine."
Section 2. Section 16-1-411, MCA, is amended to read:
"16-1-411. Tax on wine and cider. (1) (a) A tax of 27 cents per liter is imposed on table wine, except cider, imported by a table wine distributor or the department.
(b) A tax of 3.7 cents per liter is imposed on cider imported by a table wine distributor or the department.
(a) The tax on table wine imported by a table wine distributor imposed in subsection (1) must be paid by the table wine
distributor by the 15th day of the month following sale of the table wine or cider from the table wine distributor's
warehouse. Failure to file a table wine tax return or failure to pay the tax required by this section subjects the table wine
distributor to the penalties and interest provided for in 16-1-409. (b) The department shall collect the tax on table wine imported by the department must be collected imposed in subsection
(1) at the time of sale.
(3) The tax paid by a table wine distributor in accordance with subsection (2)
(a) and the tax collected by the department in
accordance with subsection (2)(b) must, in accordance with the provisions of 15-1-501, be distributed as follows:
16 cents 59.26% to the state general fund; and
of the remaining 11 cents: (i) 8 1/3 cents 30.86% to the state special revenue fund to the credit of the department of public health and human services
for the treatment, rehabilitation, and prevention of alcoholism; (ii) 1 1/3 cents (C) 4.94% is statutorily appropriated, as provided in 17-7-502, to the department for allocation to the
counties, based on population, for the purpose established in 16-1-404; and (iii) 1 1/3 cents (D) 4.94% is statutorily appropriated, as provided in 17-7-502, to the department for allocation to the
cities and towns, based on population, for the purpose established in 16-1-405.
(4) The tax computed and paid in accordance with this section is the only tax imposed by the state or any of its subdivisions, including cities and towns.
(5) For purposes of this section, the following definitions apply:
based Based on population" means: (a)(i) for counties, the direct proportion that the population of each county bears to the total population of all counties as
shown in the latest official federal census as adjusted by the most recent population estimates published by the U.S. bureau
of the census as provided in 16-1-410(2); and (b)(ii) for cities, the distribution described in 16-1-410; and
(b) "Table wine" has the meaning assigned in 16-1-106, but does not include cider."
Section 3. Section 16-3-415, MCA, is amended to read: "16-3-415. Definitions. As used in this part, unless the context requires otherwise, the following definitions apply: (1) "Agreement of distributorship" means a contract, agreement, commercial relationship, license, or other arrangement for
a definite or an indefinite period of time between a supplier and a table wine distributor that provides for the sale of table
wine by the supplier to the table wine distributor. (2) "Good cause" means failure by a table wine distributor to comply with reasonable business requirements imposed, or
sought to be imposed, by a supplier under the terms of an agreement of distributorship if the requirements are imposed on
other similarly situated distributors either by the terms of their agreements or in the manner of their enforcement by the
supplier. (3) "Person" means a natural person, corporation, partnership, trust, agency, or other entity and includes individual
officers, directors, or other persons in active control of the activities of the entity. (4) "Supplier" means a winery or an importer or producer of table wines that enters into or is a party to an agreement of
distributorship with a table wine distributor."
SECTION 3. SECTION
16-2-301, MCA, IS AMENDED TO READ:
"16-2-301. Retail selling price on table wine -- tax on certain table wine. (1) The retail selling price at which table wine is sold at an agency liquor store is as determined by the agent.
(2) In addition to the tax on wine assessed under 16-1-411, there is a tax of 1 cent a liter on table wine sold by a table wine distributor to an agent as described in subsection (1). This additional tax must be paid to the department by the distributor in the same manner as the tax under 16-1-411 is paid. The department shall deposit the tax paid under this section in the general fund.
(3) For the purposes of this section, "table wine" does not include cider."
Section 4. Section 16-3-418, MCA, is amended to read:
"16-3-418. Dual appointments -- equal support -- alternate supplier. (1) (a) A supplier may appoint one or more table
wine distributors to distribute its table
wines wine WINES in a specified territory. If the supplier appoints two or more table
wine distributors to sell its table wines wine WINES in the same or overlapping territories, the supplier shall offer the same
prices, delivery, terms, and promotional support to each table wine distributor.
(b) A supplier may not appoint more than one table wine distributor to distribute its cider in a specified territory.
(c) For the purposes of this subsection (1), "table wine" has the meaning assigned in 16-1-106, but does not include cider.
(2) The holder of an all-beverages license under chapter 4, part 2, may, upon presentation of
his the license or a photocopy
of his the license, personally obtain from any distributor's warehouse a quantity of table wine that the licensee may agree to
buy and that the distributor may agree to sell."
NEW SECTION. Section 5. Effective date. [This act] is effective July 1, 1997.