Not Ready for Harvest

The S.B. Vintners is proposing to create the first Wine Business Improvement District (BID) in California — a 1.5 percent tax on “all tasting room sales.”

BIDS were created in the middle of the last century by business owners to build parking lots for their customers in cities where the local government was unable to do so. The business owners financed the cost and upkeep of the parking lots.

In the end of the last century the hotel industry created tourism BIDS to finance advertising to attract visitors. The hotel BIDS charge a fee either as a percentage of the hotel bill or a fixed fee per guest. In our area there are hotel BIDS in Lompoc, Buellton, Solvang, Santa Ynez, and Santa Barbara. The S.B. Vintners argue that their Wine BID is like a hotel BID — it is not.

In the wine industry there are three types of customers —- the Trade (hotels, restaurants, grocery stores and wine shops), Wine Club Members, and Tasting Room consumers.

Does the S.B. Vintners 1.5 percent Wine BID tax require each wine customer to pay his or her fair share? Nope. The Wine BID excludes Trade and Wine Club sales. The 1.5 percent Wine BID tax is only charged to tasting-room consumers.

If the Wine BID were a hotel BID it would mean neither business travelers nor consumers who came in thru the hotel’s Wine Club would pay the Hotel BID Tax. The only hotel guest to pay the BID tax would be the tasting room customer.

How would the Wine Bid Tax be spent?

Promotion to the Trade and consumers — $3,324,832 — 62%

Protection:  advocacy to but not lobbying elected officials — $1,217,651 — 23% Community Support — $836,649 — 15%

How would this affect the wine industry? Very discriminatorily.

There are wineries whose revenues from the Trade sales are 40-80 percent, yet none of this revenue would be taxed while the Wine BID would market to the Trade.


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