North Dakota Drives Small Businessman Out of Business
This is such a clear example of what’s wrong in Bismarck:
Vintner’s Cellar, a make-your-own wine franchise in Grand Forks and Fargo, plans to go out of business by the end of April.
Franchise owners Tony and Judy Osowski blame the state of North Dakota for the impending business demise,
I have some relatives that are good customers of this place. Of course innovation by a local just isn’t going to be tolerated around here.
Osowski said Tuesday that the North Dakota Tax Commission plans to conduct an administrative hearing to determine if Vintner’s Cellar’s 2008 domestic winery license should be revoked.
“We want to work with him. But the bottom line is, it doesn’t qualify as a domestic winery,” said Daniel Rouse, special assistant attorney general and legal counsel to the North Dakota Office of State Tax Commissioner.
Rouse said Vintner’s Cellar failed an audit conducted by the Federal Alcohol and Tobacco Tax and Trade Bureau and the state tax commission in the fall of 2007. The audit indicated that the winery’s private-label wines failed to meet a state law requiring the majority if its ingredients - grapes, fruit or other sources - be North Dakota products.
At least this part of the problem isn’t to be blamed on the Tax Department. They’ve got to enforce the law as it’s written. Apparently in order to qualify for the domestic winery license you have to buy 50% of your ingrediants from in state producers. Maybe the rock head legislature needs to do a bit of research before they regulate a business they know nothing about. According to the owner he would buy from domestic sources if they are available but they aren’t. Maybe in Bismarck they think that we can grow grapes suitable for winemaking in North Dakota but that’s not the case. [Gilby Guy points out that we do produce some grapes for wine. But that doesn’t mean we can produce the right grapes they need to produce the wines people want to make.]
I think we can blame the Tax Department for part of the problem:
The franchise also owes back taxes for 2005 and 2006, based on policy that state excise and alcoholic beverage taxes must be paid on all wine sales, including the domestic winery and the make-your-own wines operations, according to Rouse.
Osowski maintains that when he started the business, the tax commissioner’s office determined that wines sold to customers making wine for their own personal or family use were exempt from state excise and alcoholic beverage taxes.
It seems to me that helping people make their own wine is not manufacturing wine and is not subject to the tax. Apparently the tax department thought so too, until lately.
The powers that be in Bismarck sure like to talk economic development but when it comes down to it they see local businesses as a crop to be harvested so that they can afford to give money to others and take credit for it.
Economic development should be creating a favorable business climate for all businesses. What we’re seeing though is that the current leadership in Bismarck wants to support fly by night businesses, businesses that don’t need the money and those that are politically connected.
For the businesses that aren’t in that bunch the owner of the business has some advice for you:
I can’t believe the state can treat a native North Dakotan this way. I certainly wouldn’t recommend anybody move to North Dakota to start a business.”
We need a change in leadership in Bismarck.













