Kentucky Bourbon
8:22 am
Sat February 4, 2012

Beshear Wants to Help Bourbon Industry by Eliminating Barrel Tax

Kentucky’s bourbon distillers may soon be getting one of their biggest wishes: a change in the barrel tax. The tax, named because it charges property taxes on bourbon aging in barrels in distillery warehouses, is a one-of-a-kind.

Other alcoholic beverages made it the commonwealth aren’t subject to the same taxes, according to Governor Steve Beshear.

“It is the only such tax in the world and it’s not assessed in Kentucky on any other alcoholic beverage such as beer, vodka or scotch whiskey,” he said.

At a recent news conference celebrating the industry, Beshear strongly hinted that he’d like his tax reform commission to look at that tax.

“As my tax reform task force meets throughout this year to study how we can better align our tax structure with the principles of fairness and economic competitiveness the barrel tax will be one of those taxes that we really need to look at,” Beshear said.

Distillers would like the tax to turn into a tax credit, where the extra money will go to capital improvements for their businesses.

The barrel tax is a two-layered tax, where part goes to local communities and other parts go to the state.

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