State of Michigan lost as much as $25,000 in unpaid taxes due to illegal shipping
LANSING – More than 150,000 of bottles of wine were illegally shipped into Michigan during the second quarter of 2018, causing the state to lose as much as $25,000 in tax revenue, according to data compiled by the Michigan Beer & Wine Wholesalers Association.
In total, 496,376 bottles of alcohol were shipped to Michigan consumers from April 1 to June 30. Of those, 245,289 were bottles of wine shipped by licensed direct shippers, leaving the remaining 251,087 bottles to cover spirits and illegally shipped wine.
“It’s estimated that 60 to 70 percent of the alcohol purchased online is wine, which means more than 150,000 bottles of wine were illegally shipped into Michigan over a three-month stretch, forcing the state to lose out on much-needed tax revenue,” said Spencer Nevins, president of the Michigan Beer and Wine Wholesalers Association. “These illegal wine shipments also take money away from mom-and-pop retailers who are proud to call Michigan home.”
A federal judge recently struck down a portion of a state law prohibiting out-of-state retailers from illegally shipping wine into the state. That ruling is on hold as the U. S. Supreme Court reviews a similar case. The state law also includes licensing requirements for third-party delivery apps, such as Drizly, and requires common carriers like FedEx and UPS to report to the state who is shipping alcohol into Michigan.
“This data shows that even with that law in place, out-of-state retailers are skirting state law and illegally shipping wine to Michigan residents,” Nevins said. “The Michigan Liquor Control Commission is now tracking who is sending wine into Michigan and how much, which will allow the state to crack down on these bad actors.”
The data was compiled using reports from the Michigan Liquor Control Commission and excise tax data from the state.
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