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INITIATIVE ELEMENTS CONTINUED

Additional Elements Connected to Annual Tax Revenue

(This is a brief description – to read the entire initiative click on the Pdf link on the home page.)

  • This initiative petition enacts new Chapter 20, Direct Shipping Wholesaler License Act, and institutes a 30% markup on all spirituous liquor and wine direct shipments to licensees. As Direct Shipping Wholesalers remit 30% tax on shipments to licensees across Utah, inventory is reduced at the UDABS, the cost of liquor is decreased, and profitability increases. The first year it is estimated that direct shipping wholesalers will supply up to 25% of the of the orders for spirituous liquor and wine resulting in an estimated net profit of $79,321+ million dollars, and by year two 40%, with an estimated net profit of $124,763+ million, and eventually surpassing current net profit. (Please see the state’s fiscal analysis Pdf by clicking the link on the home page.)

    • Utah currently issues warehousing licenses and transport licenses. By enacting Chapter 20, it enables these two license types to expand their business model by charging fees for storage and expediting deliveries from direct shipping wholesalers.  

  • This initiative petition enacts new Chapter 21, Wine Club Direct License Act, and institutes a 12% markup on shipments of wine direct-to-consumer.

    • Wineries and specialty retailers with a Wine Club Direct License, solely for the purpose of wine clubs, will remit 12% tax markup plus applicable local sales taxes to the UDABS on their established FOB prior to shipping wine to customers.

    • Wine club members must register with the UDABS. Wineries and specialty retailers are required to be licensed to ship products to consumers. A wine club member or wine club will be allowed to ship/receive up to four nine-liter cases (12 x 750mls bottles) total per calendar year from any combination of wine club memberships.

    • Shipments to private households must have labeling to denote contents as "containing alcohol" and “must be signed for by an adult over the age of 21.”

    • The UDABS will have oversight and audit capabilities to ensure licensing and common carriers are following protocols.

  • This initiative instructs the UDABS commission to sell, transfer, terminate, or sublease, all but eight, state-run liquor stores to private entities under new Chapter 22. As a result, the state will significantly benefit from the released burden of infrastructure, insurance, labor, security, maintenance, utility costs, etc. The estimated reduction in government expenditures is $43 million annually. Additionally, the millions generated in funds from the sale of UDABS state stores, infrastructure, and assets, will be transferred back to the state through the Liquor Control Fund. This chapter sets a timeline for the commission to follow and June 30, 2025, as the deadline.

  • This initiative retains warehouse “club stores” 33 and 34 and instructs the UDABS commission to repurpose one state store in each of the townships of Ogden, Provo, St. George, Moab, and Vernal as “state warehouses” to serve each respective region. One additional state warehouse is authorized under the new quota to be determined by the commission that will best serve a particular region.

Special Clauses:

  • Under 32B-2-304, this initiative enacts decreasing or increasing the wholesale liquor tax markup until the year 2060 through a vote by the people in a general election.

|  INITIATIVE ELEMENTS CONT. 

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