Santa Barbara County Wine Preserve

A Wine District is a geographically determined area (a “district”) that contributes stable funding to promote the wine industry within that area. The funding is generated through an assessment (fee) on the retail sale of wine.

For example, a 1% assessment (fee) on a $50.00 bottle of wine = $0.50.

These funds then go to a non-profit organization, usually the regional association, for the exclusive benefit of the industry. Benefits include marketing and government engagement efforts that promote and protect the wine industry, including advertising, events, and special projects.

Usually the assessment is passed along and collected from the consumer. This approach has been used successfully in many destination areas throughout the country.

If you travel at all, you have probably already paid an assessment. For instance, our local hotels charge a small fee on all hotel stays and this is how Visit Santa Barbara and Visit the Santa Ynez Valley are funded. Their work drives overnight stays and benefits the hotel industry.

This is not a tax.

Taxes fund the government, a Wine District funds our industry.

It is crucial to understand that the assessment fee is for the exclusive benefit of the industry that collects the funds. It does not go to any other industry and may not be used by the government.

The assessment fee, unlike taxes, requires that those who pay the fee specifically benefit from the fees paid. State law explicitly distinguishes taxes from assessment fees. This fee will not go into a government fund. It will be returned to a non-profit corporation that will spend the money for the direct benefit of the businesses that pay the fee.

Additionally, an assessment fee differs from a tax because it is requested and approved by the majority of the businesses that pay the fee, rather than the general public.

Yes, both Temecula Valley and Livermore Valley have passed Wine Districts.

• Temecula Valley implemented a 1% Wine District and collected $1,700,000 in 2022. Budget has tripled.

• Livermore Valley implemented a 2% Wine District and collected $700,000 in 2022. Budget has doubled.

• Paso Robles – pursuing, expected 2024
• Monterey County – pursuing, expected 2024
• Mendocino County – pursuing, expected 2024

• Amador County – pursuing, expected 2024

Wine Districts are fast becoming the industry standard on how wine regions promote and protect their industry. The District is a sustainable, reliable, and significant form of funding for our industry. If we do not pursue this, we run the risk of our customers being recruited to other wine regions.

The assessment fee would be 1% on all DTC transactions within the State of California. This includes:

• Wine
• Merchandise
• Wine club
• Events
• Food
• Any items shipping to California customers, including orders made through internet, phone and wine club

By choosing retail sales, the fee is paid on the same sales as CA sales tax. This ensures a reliable system of auditing and collection that is not dependent on self-reporting and does not create additional work for the wineries.

The District is estimated to generate approximately $1.65 million in funds. This is roughly double the current budget of the Santa Barbara County Vintners Association. This estimate is based on the 2022 retail tax receipts for the wineries in Santa Barbara County and the 1% fee structure described above.

All winery owners located within the boundaries of Santa Barbara County who have a Direct-to-Consumer business are eligible to sign the petition in favor of the Wine District. Anyone against the Wine District abstains.

Once the Wine District is established, all wineries have the same voting rights: one vote per winery, regardless of production size.

Weightings are only used for the Wine District formation and dissolution processes.

The district will be established under California’s Property and Business Improvement District Law of 1994. This law requires a thorough approval process beginning with the submission of petitions from the businesses that will be assessed in the district. The proposal to form a Wine District is then presented to all city governments within the district, and finally the Board of Supervisors.

To assist with the formation of the District, the Santa Barbara Vintners has hired Civitas Advisors, a full-service consulting firm specializing in tourism improvement districts.

No! Historically, districts see an increase in visitation and sales within their industry and 98% of all districts are renewed, which clearly shows that there is high satisfaction with the results that districts deliver.

Temecula Valley, the nation’s first Wine District, has seen an increase in visitation of 18.7% from Sept 2022 to Sept 2023, according to Community Benchmark. This was significantly higher than any other region.

Since the District was implemented in March of 2021, the Temecula Valley association has received one complaint from a consumer.

No, winery membership dues would be eliminated as soon as the Wine District funding reaches the organization. This occurs approximately four months after assessment collections begin.

All wineries in the district who pay into the Wine District become de facto voting members of the new winery association. Once the assessment is passed, all wineries have equal voting rights, regardless of production size.

The Association will still have voting Grower Members and non-voting Business Members, both of which will pay dues, but all assessed wineries are automatically granted membership.

Because this is becoming an industry standard, POS systems have a feature built in that can support this fee. As an example, Wine Direct has a feature called “Handling Charge” that you can set to 1% for all sales in California. ShipCompliant has built in a feature to support Districts for multiple regions. In Square, you can add it as a separate line item. The SBV staff will work with you to determine how to add the District to your POS system.

A governing Board of Directors composed of representatives from large, medium and small wineries in the District will identify specific marketing and advocacy programs that will be funded through the District.

No. The district will be established for five years. Once per year, beginning on the anniversary of the formation of the Wine District, there is a thirty (30) day period in which owners paying fifty percent (50%) or more of the assessment may organize a protest and initiate a Board of Supervisors hearing on Wine District termination.