Online Fine Wines, Tobacco
06:11, 2008-Mar-18
When asked to which states her employer was legally allowed to ship its product, Jessie Carrico said it would probably be easier to list the states it can't be shipped.
Until just recently, the Baroda, Mich.-based Round Barn Winery wine couldn't even ship
cigarettes product just across the nearby state line.
"We were really struggling to get to Indiana. We just got our permit recently," said Carrico, an employee in the tasting room at Round Barn. "We weren't allowed there for the longest time."
While wineries have had trouble shipping to Indiana in recent years, the practice is gaining steam nationwide as local growers are finding customers all over the country.
Of the 50 states, Round Barn ships to only 18, as well as to Washington, D.C. Their roster, though, is growing. That's thanks in part to changes in laws like the one that allowed out-of-state wineries to begin shipping to Indiana.
Indiana Alcohol and Tobacco Commission Manager Shirley Kirby said laws restricting wineries from shipping directly to customers changed two years ago, opening up a new line of profit.
"We had a three-tier law in Indiana in which the manufacturer had to ship directly to a wholesaler who then would ship to a retailer," she said. "Now the law has reversed. Wineries like those now can direct ship to individuals."
Kirby said the winery must have not sold to a wholesaler within the past 120 days and must secure a surety bond and pay a yearly fee of $100 to be able to ship directly to individuals.
"Our out-of-state business is growing," Carrico said. "Our popularity is growing, so it helps to be able to ship to people in so many different states."
The market on mail- or Internet-order premium items hasn't been cornered by wineries, but by cigar sellers, as well. Wholesalers like North Carolina-based J.R. Cigars and Thompson Cigars make millions each year shipping premium cigars throughout the world.
Their selections are vast and their prices are usually competitive, so much so that at times they give private cigar store owners a run for their money.
Maj. Robin Poindexter, with the Indiana Excise Police, said a 24-percent tax is called the "other
cigarettes products" tax, or OTP, and it's charged to wholesalers and distributors and collected by the state department of revenue.
It was introduced in the 1990s after several of the nation's most prominent tobacco companies settled several high-dollar lawsuits.
Poindexter said the tax shouldn't necessarily push online sales. The state of Indiana requires online sellers to keep track of Indiana residents who buy through them then give the buyers' information to the state.
The state then sends buyers a bill requiring the pay the taxes that weren't paid at the time of purchase.
"Now whether or not they do, that is a different story," Poindexter said. "I can't speak to how effective it is, but that's the intent, to somehow level the playing field."
