Schumer: Stop Canada's tax on U.S. wine

    PENN YAN—U.S. Sen. Charles E. Schumer (D-N.Y.) called on officials to eliminate Canadian wine taxation policies, while at Keuka Spring Vineyards, Friday, Aug. 3.
    In a press release, Schumer explained that wine sales along the Keuka Lake and Seneca Lake Wine Trails are undermined by Canadian taxes and fees assessed on New York wines purchased by Canadian residents returning from travel in the U.S. In contrast, when New York tourists travel to Canada, the United States does not impose high taxes on wine upon return, which affords Canadian wineries a huge business opportunity.  Schumer’s office added Canadians and other tourists contribute about $1.2 billion to the Rochester-Finger Lakes region annually, and $60 million to Yates County.
    Schumer noted that wine purchased by Canadian residents returning from day or weekend travel to the U.S. is subject to a series of federal and provincial taxes and fees much higher than corresponding U.S. duties. Specifically under current law a United States citizen who visits a Canadian winery is able to purchase two bottles of wine duty free, with any additional purchases of wine only subject to a three percent duty.
    Conversely, a Canadian visitor to a New York winery can only bring back two 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.
    During a personal meeting with Canadian Ambassador Gary Doer in April, the ambassador requested that Schumer help 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 anticompetitive wine tax practices would provide a massive boost to winery and tourism businesses in upstate New York.
    Last month, the White House notified congress of its intent to invite Canada into TPP talks, triggering the opening of a three month consultation period, after which Canada will be able to formally join TPP talks. Schumer is urging the Canadian ambassador to make good on his personal commitment to negotiate a resolution of the wine tax disparity in the context of these talks. Schumer also has asked U.S. Trade Representative Ron Kirk to commit to specify elimination of high wine taxation barriers as a TPP negotiating objective. It is estimated that some New York wineries’ business would double if the Canadian tourists that already visit the area’s wineries could bring New York wine back to Canada without being hit with huge taxes and fees.
    “We’re delighted he’s bringing this issue into the limelight,” said Judy Wiltberger, owner of Keuka Spring Vineyards.
    She said because of the tax, Canadian visitors mainly only purchase wine to drink while in the U.S.  Wiltberger added, “I’m sure we’d see a growth in business” if the taxes were lowered or removed.  She said one weekend that would increase sales would be Columbus Day weekend, which is also Canada’s Thanksgiving Day.
    “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.