An Iowa native winery is a manufacturer who processes in Iowa, the fruit, vegetables, dandelioms, clover, honey or any combination of those ingredients, by fermentation into wine.
The U.S. Supreme Court decision – Granholm v. Heald – held that the states have extraordinary power to regulate alcoholic beverages. The 21st Amendment, which repealed prohibition, gives states a wide scope of power to regulate alcoholic beverages. That power, however, does not allow states to ban, or severely limit, the direct shipment of out-of-state wine while simultaneously authorizing direct shipment by in-state producers.
If a state chooses to allow direct shipment of wine, it must do so on evenhanded terms.
Under Iowa’s three-tier system, most alcohol has to come from the manufacturer to a distributor who then distributes it to a retailer.
When a manufacturer is allowed to sell directly at retail to the public, the middle tier or the wholesale tier is eliminated and erosion of the three-tier system takes place.
Iowa has multiple provisions in Chapter 123 that arguably do benefit in-state manufacturers over out-of-state entities.
An Iowa native winery is a manufacturer who processes in Iowa native wines from grapes, cherries, other fruits or other fruit juices, vegetables, vegetable juices, dandelions, clover, honey or other combination of these ingredients by fermentation into wine.
Vintner’s Certificate of Compliance – fee waived for wineries manufacturing in Iowa.
To manufacture and bottle wine
Class “A” Wine Permit
To manufacture and sell at wholesale – $25.00
Class “C” Native Wine Permit (allowed 1) – may sell native wine and all beer at retail for consumption on or off the premises of the manufacturing facility.
May be made at retail for on and off-premise when sold at the winery.
Bars, restaurants, grocery stores, convenience stores, etc.
Bond – $5,000 Surety Bond plus dram shop insurance if the winery obtains a class “C” native wine permit.
On-premise samplings – No charge.
Cash Sales – to patrons served under the class “C” native wine permit.
Credit Sales – 30 days to licensed retail establishment.
Shipments out-of-state – according to importation laws.
Shipments Inside the state – native wineries must obtain a Direct Shippers Permit.
Tax – $1.75 gallon paid when wine sold at wholesale.
Tax Exempt – Sales made for off-premise consumption at the manufacturing location.