Massaroni: Legislation filed Wednesday aims to eliminate the Bourbon Barrel Tax

By JIM BROOKS
Nelson County Gazette / WBRT Radio

Wednesday, Feb. 22, 2023 — House Speaker David Osbourne is one of the sponsors of a bill that will eliminate the tax on aging distilled spirits that brings millions of dollars of tax revenue to Nelson County and helped fund local schools, local governments and other agencies for decades.

House Bill 5 was introduced Wednesday, the last day to introduce new bills, and it will eliminate the tax that brings in approximately $8.9 million to Nelson County.

In exchange for receiving the barrel tax, the county does not collect property taxes from all of the distiller’s properties, which equates to about $9.8 million in property taxes the distilleries do not have to pay.

In its current form, the legislation will phase in a property tax exemption for distilled spirit warehouses over a 10-year period.

The legislation also provides distilleries a tax credit for the ad valorum taxes they have paid to local counties on their aging spirits going back to 2015. If approved as written, the tax credit could be used for capital improvements at the distillery operation.

50th District State Rep. Candy Massaroni is opposing the bill as introduced.

“Although the Kentucky distillery industry already enjoys favorable tax policies, it is requesting a refundable barrel credit which would issue a check to distillers that exceeds their tax liability,” she said.

Nelson County holds the most distilled spirits in the state.

“Although some argue that the state will compensate local governments for the lost revenue from the Bourbon Barrel Tax, this would ultimately result in the average Kentucky taxpayer facing additional taxes to cover the shortfall.

“In my view, this bill is unwarranted as it essentially transfers wealth from everyday taxpayers, who are struggling during a recession, to a thriving bourbon industry that is experiencing record profits.”

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