ARIZONA STATE SENATE
Phoenix, Arizona
liquor; direct
shipment
Restructures the three-tiered system for out-of-state producers shipping spirituous liquors into this state to allow direct-to-consumer shipments of spirituous liquor by out-of-state producers.
Arizona is one of 33 states that licenses all aspects of production, distribution and sales of alcoholic beverages. Arizona law prohibits the direct shipment of liquor to a customer. Arizona’s liquor industry operates under a three-tiered system, where all alcohol must move from a producer to a wholesaler to a retailer, rather than directly to the customer.
Currently, out-of-state producers shipping spirituous liquors into this state are subject to a three-tiered shipping process defined for out-of-state producers. Pursuant to A.R.S. 4-203.04, a resident in Arizona who is 21 years or older can place, for personal use, a spirituous liquor order in person or by telephone, mail, catalog or the internet with an out-of-state producer who has obtained a direct shipment license. The direct shipment licensee is required to deliver the spirituous liquor to a wholesaler licensed in this state. The wholesaler is then required to pay all luxury taxes and deliver the liquor to a retailer with off-sale privileges who is licensed in this state. Finally, the retailer is required to pay all transaction privilege taxes and ensure that the delivery occurs during hours when liquor is legally sold in this state to a person 21 years of age who exhibits proper identification. The law also requires the retailer to keep a record of the time, date, address, delivery type and amount, name, signature and identification number of the consumer and holds the direct shipment licensee liable for any violation of liquor statutes.
Some Arizonans and wine connoisseurs, however, have expressed their desire to be able to ship wine directly home from out-of-state winery visits without having to go through the required three-tiered system for out-of-state spirituous liquor shipping. S.B. 1073 flattens the three-tiered system to allow direct-to-consumer shipments of spirituous liquor by out-of-state producers.
There is no known fiscal impact to the state general fund associated with this measure.
1. Eliminates the requirement that the direct shipment licensee deliver the spirituous liquor through a wholesaler licensed in this state.
2. Requires the direct shipment licensee, instead of the wholesaler, to pay all luxury taxes imposed on a spirituous liquor shipment from an out-of-state direct shipper and deliver the shipment to a retailer with off-sale privileges licensed in this state.
(This provision conflicts with the next
provision.)
3. Requires the direct shipment licensee, instead of the retailer, to deliver, or arrange for the delivery of, the spirituous liquor to the person who placed the order, collect and pay all transaction privilege taxes and satisfy specified requirements relating to the delivery.
4. Contains technical and conforming changes.
5. Provides for a general effective date.
Prepared by Senate Staff
January 31, 2002