ORS Chapter 473 - Oregon Statutes

Chapter 473 — Wine,Cider and Malt Beverage Privilege Tax

 

2009 EDITION

 

 

WINE,CIDER & MALT BEVERAGE PRIVILEGE TAX

 

LIQUOR;DRUGS

 

473.005     Definitionsfor chapter

 

473.015     Definitionof “cider”

 

473.020     Administrationof chapter by commission

 

473.030     Taxon wines and malt beverages

 

473.035     Taxon cider

 

473.045     Taxon sale or use of agricultural products used by wineries; penalty fornonpayment

 

473.047     Marketingactivity tax credit; rules

 

473.050     Whenprivilege tax not imposed

 

473.060     Paymentof taxes; refunds; interest or penalty; appeal

 

473.065     Depositin lieu of bond; requirements; refund of excess amounts; waiver of bond

 

473.070     Statementsby manufacturers as to quantities produced; circumstances when annual reportingallowed

 

473.080     Estimateby commission when statement not filed or false statement filed

 

473.090     Liencreated by the tax

 

473.100     Seizureof property; notice of sale

 

473.110     Saleof property; disposal of proceeds

 

473.120     Collectionof sums due state; remedies cumulative

 

473.130     Estimateby commission as prima facie evidence

 

473.140     Recordsto be kept by manufacturers and purchasers

 

473.150     Inspectionof manufacturer’s records; records to be kept for prescribed period

 

473.160     Recordsto be kept by persons transporting wine, cider or malt beverage

 

473.170     Failureto pay tax or to maintain records

 

473.180     Applicabilityto interstate and foreign commerce

 

473.190     Statehas exclusive right to tax liquor

 

473.990     Penalties

 

473.992     Penaltyupon failure to pay agricultural products tax

 

      473.005Definitions for chapter. The definitions provided by ORS 471.001 apply tothis chapter. [1995 c.301 §6]

 

      473.010 [Amended by1953 c.120 §6; 1974 c.4 §8; repealed by 1995 c.301 §33]

 

      473.015Definition of “cider.” For the purposes of this chapter, “cider” means analcoholic beverage made from the fermentation of the juice of apples or pearsthat contains not less than one-half of one percent and not more than sevenpercent of alcohol by volume, including, but not limited to, flavored, sparklingor carbonated cider. [1995 c.301 §10; 1997 c.348 §1; 1999 c.351 §78]

 

      473.020Administration of chapter by commission. The Oregon Liquor Control Commissionshall administer this chapter, and shall prescribe forms and make such rulesand regulations as it deems necessary to enforce its provisions.

 

      473.030Tax on wines and malt beverages. (1) A tax is imposed upon the privilegeof engaging in business as a manufacturer or as an importing distributor ofmalt beverages at the rate of $2.60 per barrel of 31 gallons on all suchbeverages.

      (2)A tax is imposed upon the privilege of engaging in business as a manufactureror as an importing distributor of wines at the rate of 65 cents per gallon onall such beverages.

      (3)In addition to the tax imposed by subsection (2) of this section, amanufacturer or an importing distributor of wines containing more than 14percent alcohol by volume shall be taxed at the rate of 10 cents per gallon.

      (4)In addition to the taxes imposed by subsections (2) and (3) of this section, amanufacturer or an importing distributor of wines shall be taxed at the rate oftwo cents per gallon. Notwithstanding any other provision of law, all moneyscollected by the Oregon Liquor Control Commission pursuant to this subsectionshall be paid into the account established by the Oregon Wine Board under ORS182.470.

      (5)The rates of tax imposed by this section upon malt beverages applyproportionately to quantities in containers of less capacity than thosequantities specified in this section.

      (6)The taxes imposed by this section shall be measured by the volume of wine ormalt beverages produced, purchased or received by any manufacturer. If the wineor malt beverage remains unsold and in the possession of the producer at theplant where it was produced, no tax imposed or levied by this section isrequired to be paid until the wine or malt beverage has become sufficientlyaged for marketing at retail, but this subsection shall not be construed so asto alter or affect any provision of this chapter relating to tax liens or thefiling of statements. [Amended by 1974 c.4 §9; 1975 c.424 §3; 1977 c.856 §19;1983 c.651 §9; 1987 c.608 §3; 1995 c.301 §23; 1997 c.249 §176; 1999 c.351 §79;2003 c.797 §22]

 

      473.035Tax on cider.(1) A tax is imposed upon the privilege of engaging in business as amanufacturer or as an importing distributor of cider at the rate of $2.60 perbarrel of 31 gallons on all such beverages.

      (2)Notwithstanding subsection (1) of this section or any other provision of law,the taxation of the manufacturing or distribution of cider shall be at a ratethat is not less than the rate imposed for the privilege of manufacturing ordistributing malt beverages under ORS 473.030 (1).

      (3)The rate of tax imposed by this section shall apply proportionately toquantities in containers of less capacity than those quantities specified inthis section.

      (4)The tax imposed by this section shall be measured by the volume of ciderproduced, purchased or received by any manufacturer. If the cider remainsunsold and in the possession of the producer at the plant where it wasproduced, no tax imposed or levied by this section is required to be paid untilthe cider has become sufficiently aged for marketing at retail, but thissubsection shall not be construed so as to alter or affect any provision ofthis chapter relating to tax liens or the filing of statements. [1997 c.348 §3]

 

      473.040 [Amended by1997 c.348 §4; repealed by 2007 c.854 §10]

 

      473.045Tax on sale or use of agricultural products used by wineries; penalty fornonpayment.(1) A tax is hereby imposed upon the sale or use of all agricultural productsused in a winery for making wine.

      (2)The amount of the tax shall be $25 per ton of grapes of the vinifera varieties,whether true or hybrid.

      (3)An equivalent tax is imposed upon the sale or use of vinifera or hybrid grapeproducts imported for use in a winery licensed under ORS chapter 471 for makingwine. Such tax shall be $25 per ton of grapes used to produce the importedgrape product. The tax shall be determined on the basis of one ton of grapesfor each 150 gallons of wine made from such vinifera or hybrid grape products.

      (4)A tax on the sale or use of products that are not subject to subsection (2) or(3) of this section that are used to make wine in this state shall be imposedat a rate of $.021 per gallon of wine made from those products.

      (5)In the case of vinifera or hybrid grape products harvested in this state,$12.50 of such tax shall be levied and assessed against the person selling orproviding such grape products to the winery. If the purchasing winery islicensed under ORS chapter 471, that winery shall deduct the tax levied underthis subsection from the price paid to the seller. If the purchasing winery isnot licensed under ORS chapter 471, the seller shall report all sales on formsprovided by the Oregon Liquor Control Commission and pay $12.50 per ton as atax directly to the commission.

      (6)Taxes paid by sellers under subsection (5) of this section shall be collected bythe Oregon Liquor Control Commission on behalf of the Oregon Wine Board. Thecommission may retain an amount sufficient to cover the cost of collecting thetaxes paid under subsection (5) of this section and shall transfer theremainder of those taxes to the board for deposit as provided in ORS 576.775.Failure to pay a tax imposed under subsection (5) of this section subjects theviolator to the penalty provided in ORS 473.992.

      (7)Except for the tax specified in subsection (4) of this section the taxesspecified under this section shall be levied and assessed to the licensedwinery at the time of purchase of the product by the winery or of importationof the product, whichever is later. The tax specified in subsection (4) of thissection shall be levied and assessed to the licensed winery at the time thewine is made.

      (8)The taxes imposed by this section shall be paid by the licensed winery andcollected by the commission subject to the same powers as taxes imposed andcollected under ORS chapter 473. The tax obligation for a calendar year shallbe paid in two installments. Half shall be due on December 31 of the currentcalendar year. The remaining half shall be due the following June 30. [1977c.690 §5; 1983 c.651 §6; 1987 c.804 §1; 1991 c.459 §415c; 1995 c.301 §47; 2003c.604 §101; 2003 c.797 §23]

 

      Note: 473.045 wasenacted into law by the Legislative Assembly but was not added to or made apart of ORS chapter 473 or any series therein by legislative action. SeePreface to Oregon Revised Statutes for further explanation.

 

      473.047Marketing activity tax credit; rules. (1) As used in this section, “qualifiedmarketing activity” means marketing activity:

      (a)That promotes the sale of wine or wine products;

      (b)That does not promote specific brands of wine or wine products or exclusivelypromote the products of any particular winery; and

      (c)That has been approved by the Oregon Wine Board.

      (2)A credit against the privilege tax otherwise due under ORS 473.030 (2) isallowed to a manufacturer or importing distributor of wine for the qualifiedmarketing activity expenditures made by the manufacturer or importingdistributor in the calendar year prior to the year for which the credit isclaimed.

      (3)The credit allowed under this section shall be 28 percent of the sum of thefollowing:

      (a)One hundred percent of the cost of qualified marketing activity to the extentthat the cost of the activity does not exceed the amount of taxes themanufacturer or importing distributor of wine owed under ORS 473.030 (2) on thefirst 40,000 gallons, or 151,000 liters, of wine sold annually in Oregon; and

      (b)Twenty-five percent of the tax owed under ORS 473.030 (2) for qualifiedmarketing activity on wine sales above 40,000 gallons, or 151,000 liters, ofwine sold annually in Oregon.

      (4)The credit allowed under this section may not exceed the tax liability of themanufacturer or importing distributor of wine under ORS 473.030 (2) for thecalendar year following the year in which qualified marketing activityoccurred.

      (5)A manufacturer or importing distributor of wine that wishes to claim the creditallowed under this section shall submit with the manufacturer’s or importingdistributor’s tax return form a certificate issued by the board verifying thatthe marketing activity was a qualified marketing activity. The credit shall beclaimed on the form and include the information required by the Oregon LiquorControl Commission by rule.

      (6)The credit shall be claimed against the taxes reported on the return filedunder ORS 473.060 for each month in the calendar year following the year inwhich the qualified marketing activity occurred, until the credit is completelyused or the year ends, whichever occurs first.

      (7)The board shall by rule further define, consistent with the definition insubsection (1) of this section, the marketing activities that constitutequalified marketing activity. [2001 c.971 §2; 2003 c.797 §24]

 

      473.050When privilege tax not imposed. In computing any privilege tax imposedby ORS 473.030 or 473.035:

      (1)No malt beverage, cider or wine is subject to tax more than once.

      (2)No tax shall be levied, collected or imposed upon any malt beverage, cider orwine sold to the Oregon Liquor Control Commission or exported from the state.

      (3)No tax shall be levied, collected or imposed upon any malt beverage given awayand consumed on the licensed premises of a brewery licensee, or sold to or by avoluntary nonincorporated organization of army, air corps or navy personneloperating a place for the sale of goods pursuant to regulations promulgated bythe proper authority of each such service.

      (4)No tax shall be levied, collected or imposed upon any malt beverage, cider orwine determined by the commission to be unfit for human consumption orunsalable.

      (5)No tax shall be levied, collected or imposed upon the first 40,000 gallons, or151,000 liters, of wine sold annually in Oregon from a United Statesmanufacturer of wines producing less than 100,000 gallons, or 379,000 liters,annually. [Amended by 1971 c.158 §1; 1977 c.856 §20; 1981 c.199 §4; 1983 c.651 §7;1995 c.301 §24; 1997 c.348 §5; 2007 c.854 §5]

 

      473.057 [1989 c.511 §4;2003 c.44 §4; repealed by 2007 c.854 §10]

 

      473.060Payment of taxes; refunds; interest or penalty; appeal. (1) Theprivilege taxes imposed by ORS 473.030 and 473.035 shall be paid to the OregonLiquor Control Commission. The taxes covering the periods for which statementsare required to be rendered by ORS 473.070 shall be paid before the time forfiling such statements expires or, as concerns wines, on or before the 20th dayof the month after such wines have been withdrawn from federal bond. If not sopaid, a penalty of 10 percent and interest at the rate of one percent a monthor fraction of a month shall be added and collected. The commission may refundany tax payment imposed upon or paid in error by any licensee, and may waivethe collection or refund the payment of any tax imposed and collected on wine,cider or malt beverages subsequently exported from this state, sold to a federalinstrumentality or to the commission, or determined by the commission to beunfit for human consumption or unsalable.

      (2)The commission may waive any interest or penalty assessed to a manufacturersubject to the tax imposed under ORS 473.030 or 473.035 if the commission, inits discretion, determines that the manufacturer has made a good faith attemptto comply with the requirements of this chapter.

      (3)Except in the case of fraud, the commission may not assess any interest orpenalty on any tax due under ORS 473.030 or 473.035 following the expiration of36 months from the date on which was filed the statement required under ORS473.070 reporting the quantity of wine, cider or malt beverages upon which thetax is due.

      (4)A manufacturer may appeal a tax imposed under ORS 473.030 or 473.035 in themanner of a contested case under ORS chapter 183. [Amended by 1955 c.241 §1;1971 c.158 §2; 1981 c.199 §5; 1995 c.301 §25; 1997 c.348 §6; 1999 c.145 §1;2007 c.854 §6]

 

      473.065Deposit in lieu of bond; requirements; refund of excess amounts; waiver ofbond.(1) If a manufacturer’s total tax liability under ORS 473.030 (1) in theprevious calendar year was less than $1,000, the manufacturer may deposit withthe Oregon Liquor Control Commission an amount in cash equal to themanufacturer’s total tax liability under ORS 473.030 (1) for the previouscalendar year in lieu of the bond required by ORS 471.155 (1).

      (2)If a manufacturer’s actual tax liability under ORS 473.030 (1) is less than theamount deposited under subsection (1) of this section, the manufacturer mayrequest that the commission refund the excess funds or may apply those fundstoward the manufacturer’s tax liability under ORS 473.030 (1) for the nextcalendar year.

      (3)If a manufacturer’s actual tax liability under ORS 473.030 (1) is greater thanthe amount deposited under subsection (1) of this section, the manufacturershall pay to the commission the additional amount owed in the manner requiredunder ORS 473.060.

      (4)Unless the commission determines that a winery, grower sales privilege orwarehouse licensee or direct shipper or wine self-distribution permit holderpresents an unusual risk for nonpayment of any license fees, privilege taxes,agricultural products taxes or other tax, penalty or interest imposed underthis chapter or ORS chapter 471, the commission shall waive the bond requiredunder ORS 471.155 (1) for the licensee or permit holder if:

      (a)The licensee or permit holder was not liable for a privilege tax under thischapter in the immediately preceding calendar year and does not expect to beliable for a privilege tax under this chapter in the current calendar year; or

      (b)The licensee or permit holder of a business established during the currentcalendar year does not expect to be liable for a privilege tax under thischapter in the current calendar year. As used in this paragraph, “business”means:

      (A)A winery.

      (B)A business operated pursuant to a license issued under ORS 471.227.

      (C)A warehouse.

      (D)A business operated pursuant to a permit issued under ORS 471.274.

      (E)A business operated pursuant to a permit issued under ORS 471.282. [2005 c.632 §2;2007 c.637 §2; 2009 c.330 §1]

 

      473.070Statements by manufacturers as to quantities produced; circumstances when annualreporting allowed.(1) On or before the 20th day of each month, every manufacturer shall file withthe Oregon Liquor Control Commission a statement of the quantity of wine, ciderand malt beverages produced, purchased or received by the manufacturer duringthe preceding calendar month.

      (2)Notwithstanding subsection (1) of this section, a manufacturer of wine that wasnot liable for a privilege tax under this chapter in the prior calendar yearand that does not expect to be liable for a privilege tax under this chapter inthe current calendar year, or a manufacturer of wine that is newly establishedduring the current calendar year and that does not expect to be liable for aprivilege tax under this chapter in the current calendar year, may file a singleannual statement of the quantity of wine produced, purchased or received by themanufacturer during the current calendar year. The annual statement shall befiled with the commission on or before January 20 of the following year. [Amendedby 1967 c.52 §1; 1981 c.199 §6; 1995 c.301 §26; 1997 c.348 §7; 2005 c.177 §1]

 

      473.080Estimate by commission when statement not filed or false statement filed. If anymanufacturer fails, neglects or refuses to file a statement required by ORS473.070 or files a false statement, the Oregon Liquor Control Commission shallestimate the amount of wine, cider and malt beverages produced, purchased orreceived by the manufacturer and assess the privilege tax thereon. Themanufacturer shall be estopped from complaining of the amount so estimated. [Amendedby 1967 c.52 §2; 1995 c.301 §27; 1997 c.348 §8]

 

      473.090Lien created by the tax. The privilege tax required to be paid by ORS473.030 and 473.035 constitutes a lien upon, and has the effect of an executionduly levied against, any and all property of the manufacturer, attaching at thetime the beverages subject to the tax were produced, purchased or received, asthe case may be, and remaining until the tax is paid or the property sold inpayment thereof. The lien created by this section is paramount to all privateliens or encumbrances. [Amended by 1997 c.348 §9; 2007 c.854 §7]

 

      473.100Seizure of property; notice of sale. (1) Whenever any manufacturer isdelinquent in the payment of the privilege tax provided for in ORS 473.030 and473.035, the Oregon Liquor Control Commission or its duly authorizedrepresentative shall seize any property subject to the tax and sell, at publicauction, property so seized, or a sufficient portion thereof to pay theprivilege tax due, together with any penalties imposed under ORS 473.060 forsuch delinquency and all costs incurred on account of the seizure and sale.

      (2)Written notice of the intended sale and the time and place thereof, shall begiven to such delinquent manufacturer and to all persons appearing of record tohave an interest in the property, at least 10 days before the date set for thesale. The notice shall be enclosed in an envelope addressed to the manufacturerat the last-known residence or place of business of the manufacturer in thisstate, if any; and in the case of any person appearing of record to have aninterest in such property, addressed to such person at the last-known place ofresidence of the person, if any. The envelope shall be deposited in the UnitedStates mail, postage prepaid. In addition, notice shall be published for atleast 10 days before the date set for such sale, in a newspaper of generalcirculation published in the county in which the property seized is to be sold.If there is no newspaper of general circulation in such county, the noticeshall be posted in three public places in such county for the 10-day period.The notice shall contain a description of the property to be sold, a statementof the amount of the privilege taxes, penalties and costs, the name of themanufacturer and the further statement that, unless the privilege taxes,penalties and costs are paid on or before the time fixed in the notice for thesale, the property, or so much thereof as may be necessary, will be sold inaccordance with law and the notice. [Amended by 1997 c.348 §10; 2007 c.854 §8]

 

      473.110Sale of property; disposal of proceeds. At the sale, the property shall be soldby the Oregon Liquor Control Commission or by its duly authorized agent inaccordance with law and the notice. The commission shall deliver to thepurchaser a bill of sale for the personal property, and a deed for any realproperty so sold. The bill of sale or deed vests title in the purchaser. Theunsold portion of any property seized under ORS 473.100 may be left at theplace of sale at the risk of the manufacturer. If upon any such sale, the moneyreceived exceeds the amount of all privilege taxes, penalties and costs due thestate from the manufacturer, the excess shall be returned to the manufacturer,and a receipt therefor obtained. However, if any person having an interest inor lien upon the property has filed with the commission, prior to the sale,notice of interest or lien, the commission shall withhold any such excesspending a determination of the rights of the respective parties thereto by acourt of competent jurisdiction. If the receipt of the manufacturer is notavailable, the commission shall deposit such excess money with the StateTreasurer, as trustee for the owner, subject to the order of the manufacturer,the heirs, successors or assigns of the manufacturer.

 

      473.120Collection of sums due state; remedies cumulative. (1) The OregonLiquor Control Commission shall immediately transmit notice of the delinquencymentioned in ORS 473.100 to the Attorney General. The Attorney General shall atonce proceed to collect all sums due to the state from the manufacturer underthis chapter by bringing suit against the necessary parties to effectforfeiture of the bonds of the manufacturer, reducing any deficiency tojudgment against the manufacturer.

      (2)The remedies of the state provided in ORS 473.090 to 473.120 are cumulative andno action taken by the commission or Attorney General constitutes an electionon the part of the state or any of its officers to pursue one remedy to theexclusion of any other remedy provided in this chapter.

 

      473.130Estimate by commission as prima facie evidence. In any suitbrought to enforce the rights of the state, the assessment made by the OregonLiquor Control Commission under ORS 473.080, or a copy of so much thereof as isapplicable in such suit, duly certified by the commission and showing unpaidprivilege taxes assessed against any manufacturer, is prima facie evidence:

      (1)Of the assessment of the privilege tax and the delinquency thereof.

      (2)Of the amount of the privilege tax, interest, penalties and costs due andunpaid to the state.

      (3)That the manufacturer is indebted to this state in the amount of such privilegetax, interest and penalties therein appearing unpaid.

      (4)That the law relating to assessment and levy of such privilege tax has beenfully complied with by all persons required to perform administrative dutiesunder this chapter.

 

      473.140Records to be kept by manufacturers and purchasers. Everymanufacturer shall keep a complete and accurate record of all sales of wine,cider and malt beverages, a complete and accurate record of the number ofgallons imported, produced, purchased, manufactured, brewed or fermented, andthe date of importation, production, purchase, manufacturing, brewing orfermentation. The records shall be in such form and contain such otherinformation as the Oregon Liquor Control Commission may prescribe. Thecommission, by rule or regulation, may require the delivery of statements bydistributors to purchasers, with wine, cider and malt beverages, and prescribethe matters to be contained therein. Such records and statements shall bepreserved by the distributor and the purchaser respectively, for a period oftwo years, and shall be offered for inspection at any time upon oral or writtendemand by the commission or its duly authorized agents. [Amended by 1995 c.301 §28;1997 c.348 §11]

 

      473.150Inspection of manufacturer’s records; records to be kept for prescribed period. (1) The OregonLiquor Control Commission may, at any time, examine the books and records of aholder of a wine self-distribution permit or of any manufacturer of wine, cideror malt beverages, and