Back in 2011 Washington voters approved I-1183 to allow the sale of spirits (hard alcohol or liquor) by certain private enterprises, ending the state monopoly over retail liquor sales. The initiative created multiple classes of spirits distribution privileges. Distributors operating under a “spirits distributor license” enjoy the broadest grant of authority to distribute spirits. Other businesses, such as in-state distillers, importers, and out-of-state distillers, were granted permission under their existing licenses also engage in distribution of their own products.
The initiative also created a scheme for raising revenues distribution license fees to fund Liquor Control Board programs Part of this scheme (RCW 66.24.055(3)(c)) required “all persons holding distributor licenses” to make up the shortfall if distributor license fees did not generate $150 million in revenue. The Liquor Control Board subsequently adopted regulations imposing licensing fees against all businesses engaged in spirits retail sales and distribution. But instead of creating a scheme that required all businesses engaged in spirits distribution to make up the shortfall on a pro rata basis, the Board’s rules imposed that liability only on the class of businesses enjoying the broadest range of distribution rights – “persons holding a spirits distribution license.”
Continue Reading This Round’s On You: Washington Supreme Court Upholds Liquor License Fee Shortfall Scheme