Schumer: ‘End Canadian tax on NY wines’

John Christensen
U.S. Sen. Chuck Schumer speaks at Keuka Spring Vineyards

Tourists spent $60 million in Yates County in 2011, but New York wine sales are undermined by taxes of up to 100 percent  for Canadians returning home.

U.S. Sen. Chuck Schumer believes eliminating this wine tax disparity between Canada and the U.S. would be an economic boost for his state’s winery businesses, and has asked U.S. trade representatives to prioritize getting a commitment from Canadian leaders to address the wine tax in trade negotiations.

Schumer stood with vineyard owners and leaders of the wine industry and local government at Keuka Spring Vineyards in Milo to announce renewed efforts to eliminate restrictive Canadian wine taxation policies that put New York wineries at a competitive disadvantage.

“Canadians should fulfill their commitment and uncork the potential for Yates County wineries,” said Schumer in a prepared speech. “Yates County wineries are missing out on barrels of business because of burdensome taxes on Canadian visitors to our wineries. That is why I have secured a commitment from Canadian leaders to address this restrictive wine tax in new trade negotiations, and am urging the Canadian government to fulfill this commitment and uncork potential for winery businesses in Yates County and across upstate New York,” said Schumer.

“In April, I met with Canadian Ambassador Gary Doer, and he agreed to work with Administration officials to eliminate barriers to equitable cross-border commerce in wine, if Canada joined key trade talks. Now that Canada has entered into consultations with the United States to enter these talks, I am urging the United States and Canada to use the consultation period to formalize that personal agreement to eliminate Canada’s high wine tax that discourages Canadian tourists from buying New York wines and act as a barrier to business growth along the Seneca Lake and Keuka Lake Wine Trails.”

During that meeting, the Ambassador requested that Schumer advocate for the Canadians to be invited to join the Trans-Pacific Partnership (TPP) trade negotiations. In that same meeting, Schumer secured a commitment from the Ambassador that if Canada joined Trans-Pacific Partnership (TPP) negotiations, the Canadian government would launch formal talks to terminate Canada’s restrictive wine taxation policies. Elimination of Canada’s wine tax practices could provide a boost to winery and tourism businesses in Yates County, the Finger Lakes region and much of upstate New York.

Schumer noted that wine purchased by Canadian residents returning from travel to the U.S. is subject to a series of federal and provincial taxes and fees much higher than corresponding U.S. duties. Under current law, a U.S. citizen who visits a Canadian winery is able to purchase two bottles of wine duty-free, with any additional purchases of wine subject to a 3 percent duty. Conversely, a Canadian visitor to a New York winery can only bring back two 750 ml bottles of wine duty free, before being subject to a $0.62 (Canadian) federal tax per liter, and an additional 39.6 percent provincial excise tax. These Canadian charges can easily add up to 50 to 150 percent of the value of the wine – which means Canadian visitors, more often than not, come to taste New York wines, but not to buy.

That was reiterated by Judy Wiltberger, owner of Keuka Spring Vineyards. “Because of current tax and trade restrictions, it is extremely difficult for Canadian visitors to purchase wine and take it across the border to enjoy in their homes,,” said Wiltberger. “When we have Canadians, I tend to steer them toward the tee-shirts instead of the wine,” she added.

Peter Martini of Anthony Road Wine Co. asked if this would affect wholesale wine distribution and sales in Canada, saying that the Liquor Control Board of Ontario is the largest single purchaser of wine in the world, is just two hours away, and “it seems like a pretty good place to sell wine.” Schumer answered yes, it would apply to all wine sales.

When asked, Schumer admitted he expects resistance by members of the Canadian Parliament from Ontario since the taxes and fees help protect their own nascent wine industry, and who will face a similar group in Canada when they seek re-election. “That’s what’s held it up all these years... political pressure. We have a list of things we want, they have a list of things they want. I’m trying to get wine very high up on our list. We’ll give them something in return,” he said, referring to the TTP. Schumer surprised the crowd when he said he believes this can be accomplished by Christmas.

Other concerns voiced by the wine leaders present included some U.S. states’ restrictions on shipping wine, including Pennsylvania which also resists buying New York wine for their state-run liquor stores. Wine in grocery stores here in New York  was also mentioned.

Skip Jensen of the Farm Bureau praised Schumer for his work on the new five-year farm bill, and for getting it, rather than the short-term extension of the previous bill, passed.

Yates County Legislature Chairman Taylor Fitch and Chamber of Commerce CEO Mike Linehan both thanked Schumer for his help when phone service in the area was very substandard. Milo Representative Rob Schwarting was also present.

U.S. Sen. Chuck Schumer spoke at Keuka Spring Vineyards on Aug. 3.