Maryland alcohol control agents were told yesterday to "steer clear" of the District and Virginia agents were reviewing the situation after the D.C. City Council banned both states' from staking out District liquor stores.
"We've instructed our agents to steer clear at this point," said Marvin Bond, assistant to the Maryland comptroller of the treasury, who is responsible for revenue collection from liquor sales.
Virginia officials yesterday declined to comment on the new law until they complete a full review. The law, adopted Tuesday, prohibits state agents from watching for District liquor customers whose vehicles have Maryland or Virginia license plates.
Bond said he was consulting with his counterpart in Virginia over "whether we let it go or whether we make a response to the new law in the courts."
"This is the farthest the District has ever gone" in trying to control the state agents' activities in the city, Bond said.
The issue is money. Every time residents of Maryland and Virginia buy spirits in the District, where prices are often cheaper, the states lose revenue.
So both states limit the amount of liquor its residents can bring across state lines from another jurisdiction.
In Maryland, the limit is one quart and in Virginia it's one gallon.
Usually the state agents watch for customers with Maryland or Virginia license tags and then either follow them out of the city and stop them once they are in the state or radio ahead to another agent waiting across the state line.
"This is about loss of revenue," Bond said. Maryland gets $1.50 on every bottle of distilled spirits sold in the state, he said.
"Every time a Virginian buys liquor in the District, the state loses a 37.5 percent markup we have on liquor and a 20 percent sales tax," said Tom Weedon, director of information for the Department of Alcoholic Beverage Control.
The legislation, which is in effect for 30 days to cover the holiday sales period, prohibits agents from other states from working in the District and immediately cancels all police permits previously issued to those agents to operate in the city. Violators face a $300 fine.
The action was taken because of "increasing disturbances and harassment of customers and retailers," said Benjamin Johnson, a business regulation official in the District. The number of agents working in the District "sharply increased" in the last few months, Johnson said.
"We do not harass anybody," said Bond. "We know where people go to buy; our agents don't leave their cars." During the Thanksgiving-Christmas holidays Maryland usually has between 10 and 14 agents working at any one time in the District, Bond said.
Pauline Schneider, the mayor's director of governmental relations, said it was her understanding that the council would follow up with legislation extending the ban.
Schneider said the activities of the state agents had contributed to a decrease in liquor sales and revenue in the city, but said no figures were available on that loss.