N.D. backs off punishing make-your-owns

When it comes to alcoholic beverages, many state authorities exhibit an almost-pathological need to tax, regulate, stifle and otherwise interfere with a business enterprise.

The latest such news comes from North Dakota. Not a place one normally thinks of when the subject is wine, but, like every other state, there are wineries and winemaking interest there.

The North Dakota State Tax Commission has reversed its previous opinion on two key issues.

One affected a business called Vintner's Cellar, a make-your-own-wine company with locations in Grand Forks and Fargo. Owners Tony and Judy Osowski said in January they would close their doors because the Tax Commission wanted to revoke its domestic winery licenses, saying it did not meet ingredient requirements or pay an alcohol excise tax on its wine sales.

An audit conducted last fall claimed the winery’s private-label wines failed to meet a state law requiring the majority if its ingredients — grapes, fruit or other sources — be North Dakota products.

The other case involved Lisa Gibson Archive Vintner’s, another make-your-own-wine business in which customers are allowed to taste wines and purchase wine kits that are made in the store or in the customer’s home. This one differs in that it also makes it owns domestic wine under the Dakota Prairie label.

The state Tax Commission also claimed that the franchise owed back taxes from 2005 and 2006, based on policy that state excise and alcoholic beverage taxes must be paid on all wine sales.

Now comes word that both decisions were reconsidered and reversed.

In the case of the Osowskis' business, the state panel ruled that its winemaking kit "is not subject to the majority ingredient requirement.”

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