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.
Kentucky's Blue Ribbon Tax Commission has wrapped up its work, but Governor Steve Beshear says the biggest challenge to revising the tax code still remains.
Tax reform is on the tip of the tongue every few years in Frankfort. But historically, not much has been accomplished. Beshear will get the commission's latest recommendations for tax reform this week. And it'll be up to him to convince lawmakers that the panel's work is worth turning into law.
The Blue Ribbon Commission on Tax Reform is scheduled to meet Thursday to craft recommendations for Gov. Steve Beshear. The meeting begins at 10 a.m. EST in a conference room at the Kentucky Higher Education Assistance Authority's headquarters at 100 Airport Road in Frankfort.
Beshear appointed the panel earlier this year to recommend a simpler tax code that would generate enough revenue to meet state needs even during recessions.
In Thursday's meeting, Beshear said the commission will review Kentucky's individual income tax to see if changes are needed there.
What is expected to be the final meeting of the Blue Ribbon Commission on Tax Reform has been set for next week in Frankfort. Members will be finalizing their recommendations for reforming Kentucky's tax code in the meeting that's set for Dec. 6.
Economic consultants looking for ways to improve Kentucky's tax system have offered a variety of options that include imposing a tax on food and a variety of services ranging from haircuts to automotive repairs to funerals.