Proposed tax relief for Kentucky’s bourbon makers was fast-tracked Monday in advancing in the state House, but local leaders living near some of the world’s best-known distilleries were in no mood to toast the industry victory.
The measure aims to phase out a property tax on the value of stored bourbon barrels — a top industry priority. The phaseout would begin in 2026 and be completed by 2039.
House Bill 5 cleared the House on a 59-40 vote, soon after emerging from committee. With only a few days left in this year’s 30-day legislative session, the proposal advances to the Senate, where Republicans also have a supermajority.
The barrel tax — assessed only in Kentucky — hurts the state’s competitiveness and threatens to chip away at the state’s status as the bourbon industry epicenter, the bill’s supporters said.
“No other manufacturer pays taxes on its goods during production,” said Eric Gregory, president of the the Kentucky Distillers’ Association. “Taxes aren’t levied on vehicles rolling down the assembly line, dishwashers as they are being built, or tobacco drying in the barn.”
Those protections weren’t enough to satisfy some lawmakers from bourbon-production counties who worried about the potential revenue losses.
“I’m all for cutting taxes. But I’m not for cutting taxes on a booming industry that’s going to place the burden on the backs of my constituents,” said Republican Rep. Candy Massaroni.
Republished with permission from The Associated Press.