One of the big issues Kentucky lawmakers are expected to take up in the next legislative session is an overhaul of the state tax code. It's something that the commonwealth's bourbon distillers will have their collective eyes on, because a provision under consideration would create a new tax credit for manufacturers designed to offset a longstanding barrel tax.
"We pay a tax on every barrel that is aging in the commonwealth, as long as it sits in one of our warehouses. So if you're drinking a bottle of 18-year- old bourbon, it's been taxed 18 times," says Eric Gregory, president of the Kentucky Distillers Association. "That makes Kentucky non-competitive in the global marketplace. We are the only alcohol manufacturer in the world that pays such a tax."
Tax legislation designed to help Kentucky's bourbon distillers has previously passed in the Senate, but has never made it out of the House. Gregory says distillers are sensing a renewed seriousness on the part of many lawmakers to get a tax code overhaul passed next year, either in the regular session that begins January 8, or during a special session.